Introducing brokers: the complete guide for forex, CFD and futures

What does an introducing broker do?

An IB finds and serves clients, while a separate firm does the regulated work of account opening, execution, clearing and custody. That firm pays the IB. The money usually comes out of the revenue the referred clients generate, and what is an introducing broker gives a fuller definition, including the US split between introducing and carrying brokers.

IBs vary. In practice, most do some mix of the following:

• Acquisition: attracting prospective traders through education, signals, communities, local seminars, content or personal networks.
• Onboarding help: guiding clients through registration and verification, often in their own language and time zone.
• Ongoing service: answering platform questions, running webinars and keeping clients engaged with the broker.
• Local presence: acting as the broker's face in a city or country where the broker has no office.

What an IB does not do matters too. A properly structured IB does not take client deposits into its own accounts. It also does not set the broker's prices or margin rules, and it does not execute trades for the client unless it holds a separate licence to manage money.

Two meanings of the term

The term has a legal meaning in the US and a commercial one almost everywhere else. In US regulated markets, the Commodity Exchange Act defines a futures IB as a firm that solicits or accepts orders but does not accept customer money. In securities, an introducing broker-dealer clears its trades through a carrying or clearing broker-dealer.

In retail forex and CFDs worldwide, "IB" is mostly a commercial label for a partner who refers clients and earns per-lot rebates or a revenue share. The two meanings overlap. However, the legal duties are very different, which is why jurisdiction matters so much.

How are introducing brokers paid?

IBs are almost always paid on the ongoing trading of the clients they refer. The common models are:

• Per-lot rebate: a fixed amount for every lot the referred clients trade (for example, a hypothetical $5 per standard lot).
• Spread markup: the IB's clients trade on a slightly wider spread and the difference goes to the IB.
• Revenue share: a percentage of the net revenue the broker earns from the referred clients.
• CPA: a one-off payment per qualifying client, more common with affiliates than IBs.
• Hybrid and multi-tier: a mix of the above, often with sub-IBs whose volume also pays the master IB.

Timing varies. Brokers usually pay weekly or monthly, and sometimes daily for per-lot rebates. Earnings depend on client volume, the instruments traded and retention, and also on the broker's own terms, so two IBs with similar audiences can earn very different amounts. Forex IB commission explained covers worked examples, conflicts of interest and red flags in detail.

Does an introducing broker need a licence?

Often, yes. It depends on where the IB operates, where its clients live and what it actually does. A few anchor points:

• United States, futures: IBs generally must register with the CFTC and become NFA members, subject to limited exemptions. An IB can work under a guarantee agreement with a futures commission merchant, but if it operates independently, it must meet minimum capital requirements.
• United States, securities: securities IBs are broker-dealers registered with the SEC and members of FINRA. They clear trades through another broker-dealer.
• United Kingdom: introducing clients to investment firms is often a regulated arranging activity unless a specific exclusion applies. An IB therefore usually needs FCA authorisation or appointed-representative status, and the financial promotion rules apply to its marketing.
• European Union: under MiFID II, a person or firm acting for a single investment firm can be registered as a tied agent of that firm.

Many retail forex and CFD IBs work with brokers licensed outside these jurisdictions, but that does not remove the rules of the country where the clients live. Both count. How to become an introducing broker gives the step-by-step view, including what to check before you sign.

How do brokers run IB programs?

Brokers run an IB program as a partner channel with its own product, pricing, operations and compliance load, so it needs the same care as any other product line. In practice, the ones that work share these building blocks:

1. Clear commercial terms: published tiers, rebate schedules and the rules for when a client counts as attributed to an IB.
2. A partner portal: real-time reporting on registrations, deposits, volume and earnings, plus tracking links and sub-IB management.
3. Due diligence on IBs: KYC on the partner, then checks on where it markets and whether it needs its own permissions.
4. Marketing support: approved creatives, landing pages and translated materials that already carry the right risk warnings.
5. Compliance monitoring: reviewing IB promotions, watching for mis-selling signals and acting on complaints.
6. Reliable payouts: predictable schedules, transparent statements and a dispute process, because IBs stay with brokers that pay on time.

Want the detail? The forex IB program guide has a full checklist for brokers designing one and for IBs comparing offers.

IB vs affiliate vs white label vs money manager

People often confuse these four partner types. They differ in how close the partner is to the client and to the trading itself:

The lines blur in practice. For example, a large IB may run content like an affiliate, while an affiliate who starts answering client questions on chat is moving towards the IB model. Brokers that run both channels usually keep separate terms, and forex affiliate marketing covers the affiliate side while forex lead generation shows how both feed a broker's funnel.

What are the risks for IBs, brokers and clients?

Each party carries a different risk. IBs depend on the broker, while brokers answer for IB conduct and clients face conflicts of interest they cannot see.

For introducing brokers

• Counterparty risk: if the broker changes terms, delays payouts or fails, the IB's income goes with it.
• Regulatory exposure: marketing to clients in a country where the IB or the broker lacks permission can carry personal liability.
• Concentration: an IB that depends on one broker and one channel has little bargaining power.

For brokers

• Conduct risk: an IB that over-promises returns or pushes unsuitable products creates complaints, chargebacks and regulatory attention for the broker.
• Attribution disputes: unclear rules about who referred a client lead to arguments and churned partners.
• Fraud: self-referrals, wash trading to farm rebates and fake accounts all need monitoring, because each one inflates what the broker pays out.

For clients

The main risk is a hidden conflict of interest. An IB paid per lot benefits from more trading, while an IB paid a share of the broker's net revenue may benefit when the client loses money. That is why good practice is to disclose the relationship and how the IB is paid, and in the EU MiFID II Art 24(9) requires clear disclosure of such third-party payments. Many other jurisdictions also require it.

How can brokers find and support good IBs?

Cold outreach alone rarely finds the strongest IBs. Instead, brokers usually build the channel from a few sources:

• Existing clients and educators who already recommend the broker informally.
• Trading communities and local educators with an engaged audience in a target market.
• Industry events and directories where partnership managers meet prospective IBs.
• Referrals from current IBs, often formalised through a sub-IB structure.

Support matters as much as recruitment. IBs stay with brokers that pay on time, report accurately and respond quickly to client issues, and they also value compliant marketing material written in their own language. Events such as trading competitions give partners something useful to bring to their communities.

Growing beyond the IB channel

IB networks scale through people. That makes them strong in relationship-driven markets and slower elsewhere, so many brokers add channels that reach traders while they are actively comparing firms. Memento Media Network is one such partner. It runs trading comparison platforms, financial media and trader competitions in more than 10 languages, and offers brokers placement alongside verified, timestamped firm data. It is a media and technology company, not an IB, and it does not handle client funds. You can read more about Memento.

Where to go next

Pick a guide. Each part of the IB model has its own, so start with the one that matches your question:

• What is an introducing broker? Definitions, the US broker-dealer meaning and a role comparison.
• Forex IB commission Structures, worked examples, disclosure and red flags.
• How to become an introducing broker Steps and the regulatory checks by jurisdiction.
• Forex IB program What a good program includes and how to evaluate one.

Are you a broker or trading firm? If you want to reach traders beyond your introducing broker network, get in touch with Memento to talk about placement on comparison platforms, media and branded competitions.