Which statement about an Introducing Broker is true?

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Multiple Choice

Which statement about an Introducing Broker is true?

In futures trading, an Introducing Broker acts as a facilitator who brings clients to an FCM. The IB doesn’t clear trades or set margins; those duties belong to the FCM and the exchange. The IB’s main reward comes from a portion of the commissions generated by the clients they introduce, rather than from clearing fees or margin arrangements. That’s why this statement is true: the IB brings business to the FCM and receives a portion of the commission, while the IB itself is not the entity that clears trades. The other roles described—clearing trades, setting regulatory margins, or providing only market data—are not the functions of an Introducing Broker.

In futures trading, an Introducing Broker acts as a facilitator who brings clients to an FCM. The IB doesn’t clear trades or set margins; those duties belong to the FCM and the exchange. The IB’s main reward comes from a portion of the commissions generated by the clients they introduce, rather than from clearing fees or margin arrangements.

That’s why this statement is true: the IB brings business to the FCM and receives a portion of the commission, while the IB itself is not the entity that clears trades. The other roles described—clearing trades, setting regulatory margins, or providing only market data—are not the functions of an Introducing Broker.

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