what is an introducing broker 
an introducing broker ib is a professional adviser in the futures markets who has a direct relationship with a client but delegates trade executions typically to a futures commission merchant fcm the introducing broker may be employed by a company that is a partner of the commission merchant s firm or a direct subsidiary of it role and responsibilities of an introducing broker ib an introducing broker acts as a middleman matching an individual or a company seeking access to the futures markets with a futures commission merchant who will take on the responsibilities of making the trade and handling the back office operations generally speaking ibs make recommendations while the commission merchant executes the trade the introducing broker and the broker who executes the transaction split the fees and commissions introducing brokers play the same role in the futures markets as stock brokers do in the equities markets however they are regulated by different authorities stock brokers are registered with the securities and exchange commission sec and are regulated by the financial industry regulatory authority finra 1 futures introducing brokers are registered with the commodity futures trading commission cftc and regulated by the national futures association nfa 2this arrangement allows for specialization with the ib focusing on the client while the fcm focuses on trading floor operations today s fcms provide trading platforms on which clients can place trades online and take responsibility for account management however it would not be financially feasible for an fcm to open storefronts across the country to serve their customers ibs can provide that local service the relationship between ibs and fcmsmany ibs are one person operations though some are larger multi location businesses in any case their primary goal is customer service outsourcing the prospecting and servicing of clients to the ibs creates economies of scale for fcms and the futures industry most ibs prefer to outsource trading because it frees them of the substantial overhead involved in executing trades maintaining accounts and handling financial reporting responsibilities ibs allow fcms to do business on a local basis while using the fcm s infrastructure for trading 