10q10k10q10k.net

What changed in Interactive Brokers Group, Inc.'s 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of Interactive Brokers Group, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+336 added−364 removedSource: 10-K (2025-02-27) vs 10-K (2024-02-27)

Top changes in Interactive Brokers Group, Inc.'s 2024 10-K

336 paragraphs added · 364 removed · 283 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

75 edited+24 added−46 removed121 unchanged
Biggest changeIn addition, customers can use the Allocation Order Tool to project, preview and allocate trades to take advantage of potential capital losses for all or some of an advisor’s invested customers. ESG Impact Profile – The ESG Impact Profile helps advisors understand customer preferences for socially responsible and impact investing.
Biggest changeIn addition, customers can use the Allocation Order Tool to project, preview and allocate trades to take advantage of potential capital losses for all or some of an advisor’s invested customers. Rebalance Tool – The Rebalance Tool lets advisors automatically rebalance all their accounts, a single sub-account or a user-defined Account Group, which includes a subset of accounts, by redistributing percentages of positions in their sub-portfolio(s) that make up the current net liquidation value. Commentary Generator – Our AI-powered Commentary Generator helps U.S.-based financial advisors streamline workflow and improve efficiency by creating customer-specific performance reports and summarizing the latest and ticker-specific news from select providers. ‎ 8 Table of Contents Tax Loss Harvesting – Our Tax Loss Harvest tool helps advisors to potentially reduce their customers’ tax liabilities by harvesting losses across multiple assets for multiple customers at the same time. ESG Impact Profile – The ESG Impact Profile helps advisors understand customer preferences for socially responsible and impact investing.
While many brokerages, including some online brokerages, rely on employees performing manual procedures to execute many day - to - day functions, we employ proprietary technology to automate, or otherwise facilitate, many of the following functions: account opening and funding; smart order routing resulting in industry-leading execution quality; seamless trading across all types of securities, futures and currencies around the world from one account; diverse order types and analytical tools offered to customers; securities lending and short stock availability; delivery of customer information, such as confirmations, customizable real - time account statements, audit trails and regulatory trade reporting; compliance; customer service; and risk management through automated real - time credit management of all new orders and margin monitoring. ‎ 10 Table of Contents Research and Development One of our core strengths is our expertise in the rapid development and deployment of automated technology for the financial markets.
While many brokerages, including some online brokerages, rely on employees performing manual procedures to execute many day - to - day functions, we employ proprietary technology to automate, or otherwise facilitate, many of the following functions: account opening and funding; smart order routing resulting in industry-leading execution quality; seamless trading across all types of securities, futures and currencies around the world from one account; diverse order types, algorithms and analytical tools offered to customers; securities lending and short stock availability; delivery of customer information, such as confirmations, customizable real - time account statements, audit trails and regulatory trade reporting; compliance; customer service; and risk management through automated real - time credit management of all new orders and margin monitoring. ‎ 10 Table of Contents Research and Development One of our core strengths is our expertise in the rapid development and deployment of automated technology for the financial markets.
Interactive Advisors also offers our customers Smart Beta Portfolios which combine the benefits of actively managed fund stock selection techniques with passive ETFs low-cost automation to provide broad market exposure and potentially higher returns, as well as Socially Responsible Investing. ‎ 9 Table of Contents Technology Our proprietary technology is the key to our success.
Interactive Advisors also offers our customers Smart Beta Portfolios which combine the benefits of actively managed fund stock selection techniques with passive ETFs low-cost automation to provide broad market exposure and potentially higher returns, as well as Socially Responsible Investing. ‎ 9 Table of Contents Technology Overview Our proprietary technology is the key to our success.
In accordance with the Commodity Exchange Act, IB LLC is required to segregate all monies, securities and property received from commodities customers in specially designated accounts. IBC, IBUK, IBIE, IBCE, IBI, IBHK, IBSJ, IBSG and IBA are subject to similar requirements within their respective jurisdictions.
In accordance with the Commodity Exchange Act, IB LLC is required to segregate all monies, securities and property received from commodities customers in specially designated accounts. IBC, IBUK, IBIE, IBI, IBHK, IBSJ, IBSG and IBA are subject to similar requirements within their respective jurisdictions.
Spot Gold – Customers can trade U.S. Spot Gold alongside other asset classes from a single unified platform. In addition, our customers have access to efficient pricing in quantities as small as one ounce and can request physical delivery of their U.S.
Spot Gold alongside other asset classes from a single unified platform. In addition, our customers have access to efficient pricing in quantities as small as one ounce and can request physical delivery of their U.S.
The most significant of our international subsidiaries are: IBC, registered to do business in Canada as an investment dealer; IBUK, registered to do business in the U.K. as a broker; IBIE, registered in Ireland as an investment firm; IBKRFS, registered to do business in Switzerland as a securities dealer; IBCE, registered in Hungary as an investment firm; IBI, registered to do business in India as a stock broker; IBHK, registered to do business in Hong Kong as a securities dealer; IBSJ, registered in Japan as a financial instruments firm; IBSG, registered in Singapore as a capital markets firm; and IBA, registered to do business in Australia as a securities dealer and futures broker.
The most significant of our international subsidiaries are: IBC, registered to do business in Canada as an investment dealer; IBUK, registered to do business in the U.K. as a broker; IBIE, registered in Ireland as an investment firm; IBKRFS, registered to do business in Switzerland as a securities dealer; IBI, registered to do business in India as a stock broker; IBHK, registered to do business in Hong Kong as a securities dealer; IBSJ, registered in Japan as a financial instruments firm; IBSG, registered in Singapore as a capital markets firm; and IBA, registered to do business in Australia as a securities dealer and futures broker.
IBG, Inc. is a holding company whose primary asset is the ownership of approximately 25.4% of the membership interests of IBG LLC, the current holding company for our businesses. IBG, Inc. is the sole managing member of IBG LLC. When we use the terms “we,” “us,” “our,” and “IBKR,” we mean IBG, Inc. and its subsidiaries (including IBG LLC).
IBG, Inc. is a holding company whose primary asset is the ownership of approximately 25.8% of the membership interests of IBG LLC, the current holding company for our businesses. IBG, Inc. is the sole managing member of IBG LLC. When we use the terms “we,” “us,” “our,” and “IBKR,” we mean IBG, Inc. and its subsidiaries (including IBG LLC).
The Securities Lending Dashboard complements IBKR’s Securities Loan and Borrow system, which is a fully electronic and actionable self-service utility that lets customers search for availability of shortable securities from within IBKR trading platforms at no cost. Interactive Analytics SM and IB Option Analytics SM – We offer our customers state - of - the - art tools, which include a customizable trading platform, advanced analytic tools and over 100 sophisticated order types and algorithms.
The Securities Lending Dashboard complements IBKR’s Securities Loan and Borrow system, which is a fully electronic and actionable self-service utility that lets customers search for availability of shortable securities from within IBKR trading platforms at no cost. ‎ 7 Table of Contents Interactive Analytics SM and IB Option Analytics SM – We offer our customers state - of - the - art tools, which include a customizable trading platform, advanced analytic tools and over 100 sophisticated order types and algorithms.
For customers looking for online advisory services, we offer: Interactive Advisors – Interactive Advisors recruits registered financial advisors, vets them, analyzes their investment track records, and groups them by their risk profile. Investors who are interested in having their individual accounts robo-traded are grouped by their risk and return preferences.
For customers looking for online advisory services, we offer: Interactive Advisors – Interactive Advisors evaluates and recruits registered financial advisors, analyzes their investment track records, and groups them by their risk profile. Investors who are interested in having their individual accounts robo-traded are grouped by their risk and return preferences.
The remaining approximately 74.6% of IBG LLC membership interests are held by IBG Holdings LLC (“Holdings”), a holding company that is owned directly and indirectly by our founder and Chairman, Mr. Thomas Peterffy and his affiliates, management and other employees of IBG LLC, and certain other members.
The remaining approximately 74.2% of IBG LLC membership interests are held by IBG Holdings LLC (“Holdings”), a holding company that is owned directly and indirectly by our founder and Chairman, Mr. Thomas Peterffy and his affiliates, management and other employees of IBG LLC, and certain other members.
Our customers obtain competitive bids and offers with low, transparent commissions and no hidden mark-ups. Cryptocurrency – Customers, including both individuals and advisors, can trade Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) and Bitcoin Cash (BCH) through Paxos Trust Company or Zero Hash LLC, which execute, clear and custody the cryptocurrencies, alongside other asset classes on a single unified platform.
Our customers obtain competitive bids and offers with low, transparent commissions and no hidden mark-ups. Cryptocurrency – Customers of Interactive Brokers LLC, including both individuals and advisors, can trade Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) and Bitcoin Cash (BCH) through Paxos Trust Company or Zero Hash LLC, which execute, clear and custody the cryptocurrencies, alongside other asset classes on a single unified platform.
The graphic below does not display the subsidiaries of IBG LLC. Our primary assets are our ownership of approximately 25.4% of the membership interests of IBG LLC, the current holding company for our businesses, and our controlling interest and related contractual rights as the sole managing member of IBG LLC.
The graphic below does not display the subsidiaries of IBG LLC. Our primary assets are our ownership of approximately 25.8% of the membership interests of IBG LLC, the current holding company for our businesses, and our controlling interest and related contractual rights as the sole managing member of IBG LLC.
The IBG LLC membership interests held by Holdings will be subject to purchase by us over time in connection with offerings by us of shares of our common stock. The table below presents the amount of IBG LLC membership interests held by IBG, Inc. and Holdings as of December 31, 2023. IBG, Inc.
The IBG LLC membership interests held by Holdings will be subject to purchase by us over time in connection with offerings by us of shares of our common stock. The table below presents the amount of IBG LLC membership interests held by IBG, Inc. and Holdings as of December 31, 2024. IBG, Inc.
To further enhance the protection of our customers’ assets, IB LLC performs daily (i.e., instead of the required weekly) customer reserve computations along with daily adjustments of the money set aside in safekeeping for our customers. Supervision and Compliance Our Compliance department supports and seeks to ensure proper operations of our business in accordance with applicable regulatory requirements.
To further enhance the protection of our customers’ assets, IB LLC performs daily (i.e., instead of the required weekly) customer reserve computations along with daily adjustments of the money set aside in safekeeping for our customers. ‎ 16 Table of Contents Supervision and Compliance Our Compliance department supports and seeks to ensure proper operations of our business in accordance with applicable regulatory requirements.
We also compete on non-monetary forms of compensation, providing what we believe to be a robust set of benefits to our employees. Regulation Our securities and derivatives businesses are extensively regulated by U.S. federal and state regulators, foreign regulatory agencies, and numerous exchanges and self - regulatory organizations of which our subsidiaries are members.
We also compete on non-monetary forms of compensation, providing what we believe to be a robust set of benefits to our employees. ‎ 14 Table of Contents Regulation Our securities and derivatives businesses are extensively regulated by U.S. federal and state regulators, foreign regulatory agencies, and numerous exchanges and self - regulatory organizations of which our subsidiaries are members.
The ever-growing complexity of multiple market centers has provided us with opportunities to build and continuously adapt our order routing software to secure excellent execution prices. Since the launching of our electronic brokerage business in 1993, we have grown to approximately 2.6 million institutional and individual brokerage customers.
The ever-growing complexity of multiple market centers has provided us with opportunities to build and continuously adapt our order routing software to secure excellent execution prices. Since the launching of our electronic brokerage business in 1993, we have grown to approximately 3.3 million institutional and individual brokerage customers.
These tools and real - time margining aid our customers in understanding their trading risk at any moment of the day and help us maintain low commissions. 11 Table of Contents We actively manage our global currency exposure on a continuous basis by maintaining our equity in a basket of currencies we call the GLOBAL.
These tools and real - time margining aid our customers in understanding their trading risk at any moment of the day and help us maintain low commissions. We actively manage our global currency exposure on a continuous basis by maintaining our equity in a basket of currencies we call the GLOBAL.
As the system continues to gain more users, IB SmartRouting SM and the IBKR ATS facilities become more important for customers in a world of multiple exchanges, market centers and penny-priced orders because it increases the possibility of best possible executions for our customers ahead of customers of other brokers.
As the system continues to gain more users, IB SmartRouting SM and the IBKR ATS facilities become more important for customers in a world of multiple exchanges, market centers 11 Table of Contents and penny-priced orders because it increases the possibility of best possible executions for our customers ahead of customers of other brokers.
IBKR Pro SM offers the lowest cost access to stocks, options, futures, forex , bonds, mutual funds, ETFs, precious metals and cryptocurrencies from a single unified platform with no added spreads, ticket charges, account minimums or platform fees . ‎ 4 Table of Contents IBKR Lite SM provides unlimited commission-free trades on U.S. exchange-listed stocks and ETFs and low-cost access to global markets without required account minimums or platform fees to participating U.S. customers.
IBKR Pro SM offers the lowest cost access to stocks, options, futures, forex , bonds, mutual funds, ETFs, precious metals and cryptocurrencies from a single unified platform with no added spreads, ticket charges, account minimums or platform fees . IBKR Lite SM provides unlimited commission-free trades on U.S. exchange-listed stocks and ETFs and low-cost access to global markets without required account minimums or platform fees to participating U.S. customers.
Specifically, our customers receive electronic access worldwide via our Trader Workstation SM (real - time Java - based trading platform), our proprietary Application Programming Interface (“API”), our IBKR Mobile app, our Client Portal-based Quick Trade feature or industry standard Financial Information Exchange (“FIX”) connectivity.
Specifically, our customers receive electronic access worldwide via our Trader Workstation SM (real - time Java - based trading platform), our Next Gen IBKR Desktop, our proprietary Application Programming Interface (“API”), our IBKR Mobile app, our Client Portal-based Quick Trade feature or industry standard Financial Information Exchange (“FIX”) connectivity.
IBKR Lite SM was designed to meet the needs of investors who are seeking a simple, commission-free way to trade U.S. exchange-listed stocks and ETFs and do not wish to consider our efforts to obtain greater price improvement through our IB SmartRouting SM system . IBKR Universal Account SM – From a single point of entry in their IBKR Universal 1 Account SM , our customers are able to transact in 27 currencies, across multiple classes of tradable, primarily exchange - listed products traded on more than 150 electronic exchanges and market centers in 34 countries around the world seamlessly.
IBKR Lite SM was designed to meet the needs of investors who are seeking a simple, commission-free way to trade U.S. exchange-listed stocks and ETFs and do not wish to consider our efforts to obtain greater price improvement through our IB SmartRouting SM system . IBKR Universal Account SM – From a single point of entry in their IBKR Universal 1 Account SM , our customers are able to transact in 28 currencies, across multiple classes of tradable, primarily exchange - listed products traded on more than 160 electronic exchanges and market centers in 36 countries around the world seamlessly.
Our customers can trade on more than 150 electronic exchanges and market centers in 34 countries around the world. These exchanges and market centers are all partially or fully electronic, meaning that customers can buy or sell a product traded on that exchange via an electronic link from their computer or mobile device through our system to the exchange.
Our customers can trade on more than 160 electronic exchanges and market centers in 36 countries around the world. These exchanges and market centers are all partially or fully electronic, meaning that customers can buy or sell a product traded on that exchange via an electronic link from their computer or mobile device through our system to the exchange.
Our Investor Relations Department can be contacted at Interactive Brokers Group, Inc., Two Pickwick Plaza, Greenwich, Connecticut 06830, Attn: Investor Relations, e - mail: investor - [email protected] . ‎ 2 Table of Contents Our Organizational Structure and Overview of Recapitalization Transactions The graphic below illustrates our current ownership structure and reflects current ownership percentages.
Our Investor Relations Department can be contacted at Interactive Brokers Group, Inc., Two Pickwick Plaza, Greenwich, Connecticut 06830, Attn: Investor Relations, e - mail: investor - relations@interactivebrokers.com. ‎ 2 Table of Contents Our Organizational Structure and Overview of Recapitalization Transactions The graphic below illustrates our current ownership structure and reflects current ownership percentages.
Abroad, we conduct our business through offices located in Canada, the United Kingdom, Ireland, Switzerland, Hungary, India, China (Hong Kong and Shanghai), Japan, Singapore and Australia . As of December 31, 2023, we had 2,932 employees worldwide.
Abroad, we conduct our business through offices located in Canada, the United Kingdom, Ireland, Switzerland, Hungary, India, China (Hong Kong and Shanghai), Japan, Singapore and Australia . As of December 31, 2024, we had 2,998 employees worldwide.
We offer APIs for every experience level from our easy-to-use Excel API to our institutional grade FIX API. Our key product offerings include: IBKR Pro SM is the core IBKR service designed for sophisticated investors.
We offer APIs for every experience level from our easy-to-use Excel API to our institutional grade FIX API. ‎ 4 Table of Contents Our key product offerings include: IBKR Pro SM is the core IBKR service designed for sophisticated investors.
Cash balances above $2,750,000 remain subject to safeguarding under the SEC's Customer Protection Rule 15c3-3. Investors’ Marketplace SM – The Investors’ Marketplace SM is the first electronic meeting place that brings together individual investors, financial advisors, money managers, fund managers, research analysts, technology providers, business developers and administrators, allowing them to interact to form connections and conduct business. Mutual Fund Marketplace – The Mutual Fund Marketplace offers our customers access to more than 48,000 mutual funds worldwide, including more than 19,000 no-transaction-fee funds from more than 550 fund families . Bond Marketplace – The Bond Marketplace allows customers to search for the best yields from a vast universe of over one million bonds from issuers in the Americas, Europe and Asia.
Cash balances above $2,750,000 remain subject to safeguarding under the SEC's Customer Protection Rule 15c3-3. Investors’ Marketplace SM – The Investors’ Marketplace SM is an electronic marketplace that brings together individual investors, financial advisors, money managers, fund managers, research analysts, technology providers, business developers and administrators, allowing them to interact to form connections and conduct business. Mutual Fund Marketplace – The Mutual Fund Marketplace offers our customers access to more than 43,000 mutual funds worldwide, including more than 18,000 no-transaction-fee funds from more than 600 fund families . Bond Marketplace – The Bond Marketplace allows customers to search for the best yields from a vast universe of over one million bonds from issuers in the Americas, Europe and Asia/Pacific.
We currently service approximately 2.56 million cleared customer accounts and have customers residing in over 200 countries and territories around the world. Our target customer is one who requires the latest in trading technology and worldwide access, and who expects low overall transaction and financing costs and market rate interest on idle cash balances.
We currently service approximately 3.34 million cleared customer accounts and have customers residing in over 200 countries and territories around the world. Our target customer is one who requires the latest in trading technology and worldwide access, and who expects low overall transaction and financing costs and market rate interest on uninvested cash balances.
Cleared customers, the large majority of our customers, use our trade execution and clearing services, low financing rates, high interest paid (when available) and, under our IBKR Lite SM offering, commission-free trades. Non-cleared customers use our trade execution services while choosing to clear with another prime broker or a custodian bank.
Cleared customers, the large majority of our customers, use our trade execution and clearing services, low financing rates, high interest paid (when benchmark rates are sufficiently above zero) and, under our IBKR Lite SM offering, commission-free trades. Non-cleared customers use our trade execution services while choosing to clear with another prime broker or a custodian bank.
As of December 31, 2023, aggregate excess regulatory capital for all of the operating subsidiaries was $10.2 billion. IB LLC is subject to the Uniform Net Capital Rule (Rule 15c3 - 1) under the Exchange Act and to the CFTC’s minimum financial requirements (Regulation 1.17) under the Commodities Exchange Act. Additionally, Interactive Brokers Canada Inc.
As of December 31, 2024, aggregate excess regulatory capital for all of the operating subsidiaries was $12.4 billion. IB LLC is subject to the Uniform Net Capital Rule (Rule 15c3 - 1) under the Exchange Act and to the CFTC’s minimum financial requirements (Regulation 1.17) under the Commodities Exchange Act. Additionally, Interactive Brokers Canada Inc.
Our customers are mainly comprised of individuals, trading desk professionals, electronic retail brokers, hedge funds, mutual funds, financial advisors, proprietary trading firms, and introducing brokers and banks that require global access. No single customer represented more than 1% of our commissions in 2023. Human Capital As of December 31, 2023, we had 2,932 employees across 27 locations globally.
Our customers are mainly comprised of individuals, trading desk professionals, electronic retail brokers, hedge funds, mutual funds, financial advisors, proprietary trading firms, and introducing brokers and banks that require global access. No single customer represented more than 2% of our commissions in 2024. Human Capital As of December 31, 2024, we had 2,998 employees across 28 locations globally.
The table below summarizes capital, capital requirements and excess regulatory capital as of December 31, 2023.
The table below summarizes capital, capital requirements and excess regulatory capital as of December 31, 2024.
From 2011 through 2023, the Company issued 40,111,445 shares of common stock (with a fair value of $1.9 billion) to Holdings in exchange for an equivalent number of shares of member interests in IBG LLC. Nature of Operations As an electronic broker, we execute, clear and settle trades globally for both institutional and individual customers.
From 2011 through 2024, the Company issued 40,444,445 shares of common stock (with a fair value of $2.0 billion) to Holdings in exchange for an equivalent number of shares of member interests in IBG LLC. Nature of Operations As an electronic broker, we execute, clear and settle trades globally for both institutional and individual customers.
We aim to attract, develop and retain employees to drive our business forward. To help our employees thrive at work and at home, we offer industry-leading benefits programs, including paid leave time for all parents, adoption and fertility support, childcare support, mental health services, and healthcare travel reimbursement.
We aim to attract, develop and retain employees to drive our business forward. To help our employees thrive at work and at home, we offer industry-leading benefits programs, including paid leave time for all parents, adoption and fertility support, childcare support, mental health services, and healthcare travel reimbursement. In the U.S., we fund healthcare premiums at no cost to employees.
We offer our customers access to all tradable classes of primarily exchange - listed products, including stocks, options, futures, forex, bonds, mutual funds, ETFs, precious metals and cryptocurrencies traded on more than 150 electronic exchanges and market centers in 34 countries and in 27 currencies seamlessly around the world.
We offer our customers access to all tradable classes of primarily exchange - listed products, including stocks, options, futures, forex, bonds, mutual funds, ETFs, precious metals, cryptocurrencies, and forecast contracts traded on more than 160 electronic exchanges and market centers in 36 countries and in 28 currencies around the world.
Business Continuity Planning Federal regulators and industry self - regulatory organizations have passed a series of rules in the past several years requiring regulated firms to maintain business continuity plans that describe what actions firms would take in the event of a disaster (such as a fire, natural disaster, climate-related event or terrorist incident) that might significantly disrupt operations.
Business Continuity Planning Federal regulators and industry self - regulatory organizations require regulated firms to maintain business continuity plans that describe what actions firms would take in the event of a disaster (such as a fire, natural disaster, climate-related event or terrorist incident) that might significantly disrupt operations.
We pay our customers interest on the collateral value generally equal to 50% of a market-based rate for lending the shares. This allows customers holding fully - paid long stock positions to enhance their returns. Block Trade Desk – We offer broker - assisted trading through our Corporate Bond and Stock and Option block order desks.
We pay our customers interest on the collateral value generally equal to 50% of a market-based rate for lending the shares. This allows customers holding fully - paid long stock positions to enhance their returns. Global Outsourced Trading Desk – We offer broker - assisted trading through our Global Outsourced Trading Desk .
We specialize in routing orders and executing and processing trades in stocks, options, futures, foreign exchange instruments (“forex”), bonds, mutual funds, ETFs and precious metals on more than 150 electronic exchanges and market centers in 34 countries and 27 currencies seamlessly around the world.
We specialize in routing orders and executing and processing trades in stocks, options, futures, foreign exchange instruments (“forex”), bonds, mutual funds, ETFs, precious metals, and forecast contracts on more than 160 electronic exchanges and market centers in 36 countries and 28 currencies around the world.
Holdings Total Ownership % 25.4% 74.6% 100.0% Membership interests 107,049,483 313,976,354 421,025,837 3 Table of Contents Purchases of IBG LLC membership interests, held by Holdings, by the Company are governed by the exchange agreement among us, IBG LLC, Holdings and the historical members of IBG LLC, (the “Exchange Agreement”), a copy of which was filed as an exhibit to our Quarterly Report on Form 10 - Q for the quarter ended September 30, 2009 and filed with the SEC on November 9, 2009.
Holdings Total Ownership % 25.8% 74.2% 100.0% Membership interests 108,931,614 313,643,354 422,574,968 3 Table of Contents Purchases of IBG LLC membership interests, held by Holdings, by the Company are governed by the exchange agreement among us, IBG LLC, Holdings and the historical members of IBG LLC, (the “Exchange Agreement”), a copy of which was filed as an exhibit to our Quarterly Report on Form 10 - Q for the quarter ended September 30, 2009 and filed with the SEC on November 9, 2009.
With fractional shares, there is no minimum for European shares and customers can invest in U.S. shares with as little as $1.00. This functionality allows customers to experiment with trading and investing without committing substantial sums of money and learn about building and rebalancing diversified portfolios. 1 U.S. regulations require securities and commodities activities to be conducted in separate accounts.
With fractional shares, there is no minimum for European shares and customers can invest in U.S. shares with as little as $1.00. This functionality allows customers to experiment with trading and investing without committing substantial sums of money and learn about building and rebalancing diversified portfolios. U.S. Spot Gold – Customers can trade U.S.
Our foreign subsidiaries are similarly regulated under the laws and institutional frameworks of the countries in which they operate. ‎ 15 Table of Contents U.S. broker - dealers and futures commission merchants are subject to laws, rules and regulations that cover all aspects of the securities and derivatives business, including: sales methods; “know your customer” requirements; anti-money laundering requirements; trade practices; use and safekeeping of customers’ funds and securities; capital structure; risk management; record - keeping; financing of customers’ purchases; and conduct of directors, officers and employees.
U.S. broker - dealers and futures commission merchants are subject to laws, rules and regulations that cover all aspects of the securities and derivatives business, including: sales methods; “know your customer” requirements; anti-money laundering requirements; trade practices; use and safekeeping of customers’ funds and securities; capital structure; risk management; record - keeping; financing of customers’ purchases; and conduct of directors, officers and employees.
Analytical offerings on our platform include: IBKR GlobalAnalyst SM – Our IBKR GlobalAnalyst SM tool, designed for investors who are interested in international portfolio diversification, helps find new opportunities to diversify an investor’s portfolio and discover undervalued companies that may have greater growth potential.
Analytical offerings on our platform include: IBKR GlobalAnalyst SM – IBKR GlobalAnalyst SM is designed for investors who are interested in new opportunities to diversify their portfolio and in discovering undervalued companies that may have greater growth potential.
Over four decades of developing our automated trading platforms and automating many middle- and back-office functions have allowed us to become one of the lowest cost providers of broker - dealer services and to significantly increase the volume of trades we handle. Our internet address is www.interactivebrokers.com and the investor relations section of our website is located at www.interactivebrokers.com/ir.
Over four decades of developing our automated trading platforms and automating many middle- and back-office functions have allowed us to become one of the lowest cost providers of broker - dealer services and to significantly increase the volume of trades we handle.
The desks help traders execute large or complex orders and monitor trades when customers are unable to do so.
The desk helps traders execute large or complex orders and monitors trades when customers are unable to do so.
(“IBC”) is subject to the Canadian Investment Regulatory Organization (“CIRO”) risk adjusted capital requirement; Interactive Brokers (U.K.) 16 Table of Contents Limited (“IBUK”) is subject to the United Kingdom’s (“U.K.”) Financial Conduct Authority (“FCA”) financial resources requirement; Interactive Brokers Ireland Limited (“IBIE”) is subject to the Central Bank of Ireland (“CBI”) financial resources requirement; IBKR Financial Services AG (“IBKRFS”) is subject to the Swiss Financial Market Supervisory Authority (“FINMA”) eligible equity requirement; Interactive Brokers Central Europe Zrt.
(“IBC”) is subject to the Canadian Investment Regulatory Organization (“CIRO”) risk adjusted capital requirement; Interactive Brokers (U.K.) Limited (“IBUK”) is subject to the United Kingdom’s (“U.K.”) Financial Conduct Authority (“FCA”) financial resources requirement; Interactive Brokers Ireland Limited (“IBIE”) is subject to the Central Bank of Ireland (“CBI”) financial resources requirement; IBKR Financial Services AG (“IBKRFS”) is subject to the Swiss Financial Market Supervisory Authority (“FINMA”) eligible equity requirement; Interactive Brokers (India) Private Limited (“ IBI”) is subject to the National Stock Exchange of India net capital requirements; Interactive Brokers Hong Kong Limited (“IBHK”) is subject to the Hong Kong Securities and Futures Commission (“SFC”) financial resource requirement; Interactive Brokers Securities Japan, Inc.
Spot Gold position. No Transaction Fee Program for Exchange - Traded Funds – We offer a no transaction fee program for ETFs that reimburses IBKR Pro SM customers and eligible non-U.S. customers for commissions paid on ETF shares held for at least 30 days. Event Contracts – IBKR EventTrader SM is our web-based platform for trading event contracts on select CME futures markets.
Spot Gold position. No Transaction Fee Program for Exchange - Traded Funds – We offer a no transaction fee program for ETFs that reimburses IBKR Pro SM customers and eligible non-U.S. customers for commissions paid on ETF shares held for at least 30 days. Overnight Trading Hours – Customers can trade over 10,000 U.S. stocks and ETFs, U.S.
The service is available to customers with accounts at several major U.S. banks and, over time, other banks will be added. Insured Bank Deposit Sweep Program – Our Insured Bank Deposit Sweep Program provides eligible customers with up to $2,500,000 of Federal Deposit Insurance Corporation (“FDIC”) insurance on their eligible cash balances in addition to the existing $250,000 Securities Investor Protection Corporation (“SIPC”) coverage for total coverage of $2,750,000.
In addition, U.S. customers can use our Mobile Check Deposit to directly deposit checks drawn on a U.S. bank. Insured Bank Deposit Sweep Program – Our Insured Bank Deposit Sweep Program provides eligible customers with up to $2,500,000 of Federal Deposit Insurance Corporation (“FDIC”) insurance on their eligible cash balances in addition to the existing $250,000 Securities Investor Protection Corporation (“SIPC”) coverage for total coverage of $2,750,000.
We also procured renewable power sources for all of our offices through the purchase of renewable energy certificates representing over 95% of our operational footprint. We use third-party providers for data centers.
We also procured renewable power sources for all our offices through the purchase of renewable energy certificates. We use third-party providers for data centers. Globally, where possible, our data centers use renewable power provided directly through the landlord or via renewable energy certificates.
Customers can adjust inputs, such as monthly contribution amount, goal target date, or the cost or outflow associated with the goal, to estimate the likelihood of achieving a goal. ‎ 7 Table of Contents Sustainable Investing Tools IMPACT by Interactive Brokers SM – IMPACT by Interactive Brokers SM (“IMPACT App”) is a unique, simple and intuitive mobile app that helps customers easily align their investment portfolio with their values.
Customers can adjust inputs, such as monthly contribution amount, goal target date, or the cost or outflow associated with the goal, to estimate the likelihood of achieving a goal. AI News Summaries – Customers outside the U.S. have access to AI News Summaries that use generative AI to quickly summarize the key points of news published by select providers, saving time and allowing them to react rapidly to changing market conditions. Sustainable Investing Tools IMPACT by Interactive Brokers SM – IMPACT by Interactive Brokers SM (“IMPACT App”) is a unique, simple and intuitive mobile app that helps customers easily align their investment portfolio with their values.
We are also subject to the requirements of various self - regulatory organizations such as the Financial Industry Regulatory Authority (“FINRA”), the Chicago Mercantile Exchange (“CME”) and the National Futures Association (“NFA”).
We are also subject to the requirements of various self - regulatory organizations such as the Financial Industry Regulatory Authority (“FINRA”), the Chicago Mercantile Exchange (“CME”) and the National Futures Association (“NFA”). ForecastEx, an exchange and clearinghouse for forecast contracts, is registered with the CFTC as a Designated Contract Market and Derivatives Clearing Organization.
If these net capital rules are changed or expanded, or if there is an unusually large charge against our net capital, our operations that require the intensive use of capital would be limited.
The Net Capital Rule requires that at least a minimum part of a broker - dealer’s assets be maintained in a relatively liquid form. 15 Table of Contents If these net capital rules are changed or expanded, or if there is an unusually large charge against our net capital, our operations that require the intensive use of capital would be limited.
Generally, a broker - dealer’s capital is its net worth plus qualified subordinated debt less deductions for certain types of assets. The Net Capital Rule requires that at least a minimum part of a broker - dealer’s assets be maintained in a relatively liquid form.
Generally, a broker - dealer’s capital is its net worth plus qualified subordinated debt less deductions for certain types of assets.
The contents of our Sustainability Report are not incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC. In 2023, we also completed our baseline Greenhouse Gas (“GHG”) assessment to help us inventory and analyze our Scope 1 and Scope 2 emissions.
The contents of our Sustainability Report are not incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC. Our Sustainability Report can be found on our website.
See the “Net Capital” section above in this Item 1, for regulatory requirements related to our foreign subsidiaries. ‎ 18 Table of Contents Executive Officers and Directors of Interactive Brokers Group, Inc. The table below presents the names, ages and positions of our current directors and executive officers as of December 31, 2023.
See the “Net Capital” section above in this Item 1, for regulatory requirements related to our foreign subsidiaries. ‎ 18 Table of Contents
Customers can select the values they care about from a list ranging from clean air to consumer safety and racial equality, and measure how both individual securities and their overall portfolio measure up against their criteria. ESG Scores – ESG Scores from Refinitiv give customers a new set of tools for making investment decisions based on more than just financial factors.
Customers can select investments they care about and can measure how both individual securities and their overall portfolio measure up against their criteria. ESG Scores – ESG Scores from Refinitiv give customers a separate set of tools to help them make investment decisions.
Currently available for eligible customers in Latin America and the Caribbean (excluding Puerto Rico and the U.S. Virgin Islands). Request for Payment Service – Through this new banking service, U.S. customers can make instant deposits, 24 hours a day, from their mobile banking app or other bank portal to fund their brokerage account with us.
Our offering features a suite of cash management services, including: Request for Payment Service – Through this banking service, U.S. customers can make instant deposits, 24 hours a day, from their mobile banking app or other bank portal to fund their brokerage account with us. Funds deposited via Request for Payment are immediately available for trading.
These controls are periodically assessed for both design appropriateness and operating effectiveness by our Enterprise Risk Management and Internal Audit functions. In addition, an Independent Service Auditor annually examines our brokerage operations system and the suitability of the design and operating effectiveness of the related controls (System and Organizational Controls 1 Report).
These controls are periodically assessed for both design appropriateness and operating effectiveness by our Enterprise Risk Management and Internal Audit functions.
In Hong Kong, customers can trade and hold BTC and ETH in their account with Interactive Brokers Hong Kong Limited (“IBHK”) . Fractional Trading – Fractional Trading allows customers to buy and sell any eligible U.S., Canadian, or European stocks (or ETFs, where available), using either a specified cash amount or fractional shares, which are stock units that amount to less than one full share.
IBKR ForecastTrader SM allows customers to trade their opinion on a specific question with a “yes” or “no” outcome while earning an interest-like incentive coupon based on the daily closing price of each contract. Fractional Trading – Fractional Trading allows customers to buy and sell any eligible U.S., Canadian, or European stocks (or ETFs, where available), using either a specified cash amount or fractional shares, which are stock units that amount to less than one full share.
Universal Account SM refers to the consolidation of these accounts for display purposes only, enabling customers the ability to use a single platform to conduct trading activity and view consolidated activity and position information for all products and services offered. 2 American Express ® is a trademark registered to the American Express Company, 200 Vesey Street, New York, New York 10285. ‎ 5 Table of Contents U.S.
Universal Account SM refers to the consolidation of these accounts for display purposes only, enabling customers the ability to use a single platform to conduct trading activity and view consolidated activity and position information for all products and services offered. ‎ 5 Table of Contents Forecast and Event Contracts – IBKR ForecastTrader SM is our web-based platform for trading forecast contracts from ForecastEx LLC (“ForecastEx”), a CFTC-registered exchange and our wholly-owned subsidiary, as well as event contracts on select CME futures markets.
Staff members in the Compliance department and in other departments are also registered with FINRA, NFA or other regulatory organizations. ‎ 17 Table of Contents Patriot Act and Increased Anti-Money Laundering (“AML”) and “Know Your Customer” Obligations Registered broker - dealers traditionally have been subject to a variety of rules that require that they “know their customers” and monitor their customers’ transactions for suspicious activities.
As such, the Company has a Business Communication Policy in place and requires all employees to certify that they have read and agreed to only send and receive written electronic communications related to the business of the Company through Company-approved channels. ‎ 17 Table of Contents Patriot Act and Increased Anti-Money Laundering (“AML”) and “Know Your Customer” Obligations Registered broker - dealers traditionally have been subject to a variety of rules that require that they “know their customers” and monitor their customers’ transactions for suspicious activities.
Our offering features a suite of cash management services, including: Direct Deposit and Mobile Check Deposit – Our Direct Deposit program allows customers to automatically deposit paychecks, pension distributions and other recurring payments to their (non-retirement) brokerage account with us.
Dollar Currency Deposits – We support a host of deposit types using local payment systems outside the U.S. to facilitate convenient account funding for non-U.S. customers. Direct Deposit and Mobile Check Deposit – Our Direct Deposit program allows customers to automatically deposit paychecks, pension distributions and other recurring payments to their (non-retirement) brokerage account with us.
It also provides customers in Asia with access to the U.S. Equity markets during their trading day. For all customers, our platform offers: Low Costs – We provide our customers with among the industry’s lowest overall transaction costs in two ways. First, we offer among the lowest execution, commission and financing costs in the industry.
For all customers, our platform offers: Low Costs – We provide our customers with among the industry’s lowest overall transaction costs in two ways. First, we offer among the lowest execution, commission and financing costs in the industry. Second, our IBKR Pro SM customers benefit from our advanced routing of orders designed to achieve the best available trade price.
This gives advisors the ability to customize portfolios to align with specific investment objectives. Employee Plan Administrator SIMPLE IRA – The Employee Plan Administrator account allows U.S. advisors to offer self-employed individuals and companies of less than 100 employees a Savings Investment Match Plan for Employees Individual Retirement Account (“SIMPLE IRA”). Tax Loss Harvesting – IBKR’s Tax Loss Harvest tool helps advisors to potentially reduce their customers’ tax liabilities by harvesting losses across multiple assets for multiple customers at the same time. 8 Table of Contents For introducing brokers and advisors, we offer: White Branding – Our large financial advisor and broker - dealer customers may “white brand” our trading interface, account management and reports with their firm’s identity.
This gives advisors the ability to customize portfolios to align with specific investment objectives. Employee Plan Administrator SIMPLE IRA – The Employee Plan Administrator account allows U.S. advisors to offer self-employed individuals and companies of less than 100 employees a Savings Investment Match Plan for Employees Individual Retirement Account (“SIMPLE IRA”).
We compete based on numerous factors, including quality of transaction execution, customer experience, products and services, technological excellence and innovation, reputation, global access, and price. Since our inception, we have been transforming the electronic brokerage business through automation and innovation, with software development, product improvement, expansion of products and geographies, and management focus dedicated to this mission.
Since our inception, we have been transforming the electronic brokerage business through automation and innovation, with software development, product improvement, expansion of products and geographies, and management focus dedicated to this mission. We believe these are significant differentiators that set us apart from our competitors. We experience competition in hiring and retaining qualified employees.
In addition, we have strengthened our technical infrastructure and have built redundancy of systems so that most operations can be handled from multiple offices or remotely. Spurred by the COVID-19 pandemic, we have substantially enhanced this infrastructure and our remote access capabilities so that most employees, including all with critical job functions, can work remotely.
In addition, we continue to strengthen our technical infrastructure and have built redundancy of systems so that most operations and critical job functions can be handled from multiple offices or remotely. Foreign Regulation Our international subsidiaries are subject to extensive regulation in the various jurisdictions where they have operations.
The speed of communicating with exchanges and market centers is maximized through continuous software and network engineering maintenance, thereby allowing us to achieve real - time controls over market exposure. ‎ 12 Table of Contents Transaction Processing Our transaction processing is automated over the full life cycle of a trade.
The speed of communicating with exchanges and market centers is maximized through continuous software and network engineering maintenance, thereby allowing us to achieve real - time controls over market exposure. Customers Our customers primarily fall into two groups based on services provided, both of which take advantage of our low commissions as well as our best price execution.
In addition, we are fully or partially self - cleared in Canada, the United Kingdom, Switzerland, France, Germany, Belgium, Austria, the Netherlands, Spain, Norway, Sweden, India, Hong Kong, Japan and Australia. Customers Our customers primarily fall into two groups based on services provided, both of which take advantage of our low commissions as well as our best price execution.
In addition, we are fully or partially self - cleared in Canada, the United Kingdom, Switzerland, France, Germany, Belgium, Austria, the Netherlands, Spain, Norway, Sweden, India, Hong Kong, Japan and Australia. Additionally, we are members of ForecastEx, a CFTC- registered Designated Contract Market and Derivatives Clearing Organization.
Net Capital/ Eligible Equity Requirement Excess (in millions) IB LLC $ 7,319 $ 823 $ 6,496 IBHK 1,265 223 1,042 IBIE 685 189 496 Other regulated operating subsidiaries 2,333 142 2,191 $ 11,602 $ 1,377 $ 10,225 As of December 31, 2023, all of the operating subsidiaries were in compliance with their respective regulatory capital requirements.
Net Capital/ Eligible Equity Requirement Excess (in millions) IB LLC $ 9,450 $ 1,268 $ 8,182 IBHK 1,427 359 1,068 IBIE 1,302 293 1,009 Other regulated operating subsidiaries 2,274 170 2,104 $ 14,453 $ 2,090 $ 12,363 As of December 31, 2024, all of the operating subsidiaries were in compliance with their respective regulatory capital requirements.
IBKR GlobalAnalyst SM can search across business sectors and allows for filtering by region, country and market capitalization. PortfolioAnalyst ® – Our PortfolioAnalyst ® reporting tool allows customers to consolidate, track and analyze their portfolios, offering multi-custody solutions, advanced reporting, global support, benchmarks, risk metrics, GIPS® verified returns and powerful on-the-go analytics.
The tool’s World Map Screener lets customers easily find stocks that match their strategies from across a universe of over 70,000 stocks worldwide, while the World Data Screener lets customers compare the relative value of global stocks in the same currency and find new opportunities. PortfolioAnalyst ® – Our PortfolioAnalyst ® reporting tool allows customers to consolidate, track and analyze their portfolios, offering multi-custody solutions, advanced reporting, global support, benchmarks, risk metrics, GIPS® verified returns and powerful on-the-go analytics.
Our customers can choose the following trading platforms to match their trading style and expertise: IBKR Trader Workstation SM (TWS) – The TWS is our flagship desktop trading platform, designed for seasoned, active traders who trade multiple products and require power and flexibility.
It offers a highly customizable trading experience with a broad array of tools for technical and fundamental analysis, sophisticated charting capabilities and advanced order types, including conditional and algorithmic orders. IBKR Trader Workstation SM (TWS) – The TWS is our flagship desktop trading platform, designed for seasoned, active traders who trade multiple products and require power and flexibility.
The environment in which we operate has a broad array of competitors ranging from large integrated banks to online brokers to early-stage private companies. Our primary competitors, both in the U.S. and abroad, are other companies that provide electronic brokerage, prime brokerage, and financial advisor and introducing broker products and services.
Competition The market for electronic brokerage services is rapidly evolving and highly competitive, and we expect it to remain so. The environment in which we operate has a broad array of competitors ranging from large integrated banks to online brokers to new entrants.
As a result of our advanced electronic brokerage platform, we are especially attractive to sophisticated and active investors.
As a result of our advanced electronic brokerage platform, we are especially attractive to sophisticated and active investors. Our customers can choose the following trading platforms to match their trading style and expertise: IBKR Desktop – IBKR Desktop is our newest trading platform, built from the ground up using modern technology and a fresh user interface design.
IBKR EventTrader SM allows customers to trade their opinion about a specific question with a “yes” or “no” outcome. Overnight Trading Hours – Customers can trade over 10,000 U.S. stocks and ETFs nearly 24 hours a day, five days a week, enabling them to react immediately to market-moving news and conveniently trade at almost any time.
Equity Index futures and options, U.S. Treasurys, global corporate bonds, European government bonds, and United Kingdom (“U.K.”) gilts nearly 24 hours a day, five days a week, enabling them to react immediately to market-moving news and conveniently trade at almost any time. It also provides customers in Asia with access to the U.S. Equity markets during their trading day.
PortfolioAnalyst ® can consolidate data from a customer’s investment, checking, savings and annuity accounts, as well as incentive plans, credit card accounts, mortgages and student loans. IB Risk Navigator SM – We offer to all customers our real - time market risk management platform that unifies exposure across multiple asset classes around the globe.
PortfolioAnalyst ® includes Retirement Planning and Budgeting tools, and provides U.S.-based advisors with an AI Commentary Generator designed to help advisors with customer portfolio performance reporting, market updates and ticker-specific news. IB Risk Navigator SM – We offer to all customers our real - time market risk management platform that unifies exposure across multiple asset classes around the globe.
The IMPACT App allows customers to select their personal investment criteria from thirteen impact values and principles, and also allow customers to exclude investments based on business practices they would like to avoid. Carbon Offsets – Using the IMPACT App, U.S. customers can offset their carbon emissions by purchasing carbon offsets and can use the Carbon Offsets tool to select from either greenhouse-gas emitting activities related to household, transportation and food, or enter a specific amount of carbon to offset.
The IMPACT App is intended to allow customers to select their personal investment criteria from thirteen impact goals and principles and to exclude investments based on business practices they would like to avoid. Impact Dashboard – The Impact Dashboard is intended to help customers evaluate and invest in companies that align with their principles.
We continue to implement sustainable practices that help protect the environment. All of our offices have completed an environmental review to assess current and best practices for energy, water and waste management, and in 2023, we developed our Environmental Standards, a framework for managing our GHG, waste, water and recycling.
In 2024, we assessed our Greenhouse Gas (“GHG”) under Scope 1 and Scope 2 emissions and initiated our Scope 3 emission capturing waste generated in operation and upstream leased assets. All our offices have completed an environmental review to assess current and best practices for energy, water and waste management.
Removed
In addition, U.S. customers can use our Mobile Check Deposit to directly deposit checks drawn on a U.S. bank.  American Express® International Dollar Card – The American Express® 2 International Dollar card allows non-U.S. residents to transact in U.S. dollars. Customers enjoy the convenience of paying their bills directly from their Interactive Brokers account.
Added
Available Information Our internet address is www.interactivebrokers.com and the investor relations section of our website is located at www.interactivebrokers.com/ir.
Removed
Funds deposited via Request for Payment are immediately available for trading.
Added
This new platform provides a clean, intuitive experience, making it easy for traders of all levels to navigate.
Removed
Second, our IBKR Pro SM customers benefit from our advanced routing of orders designed to achieve the best available trade price.

… 65 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

47 edited+6 added−6 removed155 unchanged
Biggest changeIn addition, our tax liabilities are subject to other significant risks and uncertainties, including those arising from potential changes in laws and regulations in the countries in which we do business (e.g., on December 15, 2022, the EU formally adopted the EU’s Pillar Two Directive, effective January 1, 2024, which provides for a minimum effective tax rate of 15%, as established by the Organization for Economic Cooperation and Development (“OECD”) Pillar Two Framework; and a significant number of other countries have either already or are expected to also implement similar legislation with varying effective dates), the possibility of tax controversy related to adverse determinations with respect to the application of existing laws, changes in our business or structure, and changes in the valuation of our deferred tax assets and liabilities.
Biggest changeFor example, on December 15, 2022, the EU formally adopted the EU’s Pillar Two Directive, effective January 1, 2024, which provides for a minimum effective tax rate of 15%, as established by the Organization for Economic Cooperation and Development (“OECD”) Pillar Two Framework, and a significant number of other countries have either already or are expected to also implement similar legislation with varying effective dates.
The tax savings that we would actually realize as a result of this increase in tax basis likely would be significantly less than this amount multiplied by our effective tax rate due to a number of factors, including the allocation of a portion of the increase in tax basis to foreign or non - depreciable fixed assets, the impact of the increase in the tax basis on our ability to use foreign tax credits and the rules relating to the amortization of intangible assets, for example.
The tax savings that we would actually realize as a result of this increase in tax basis likely would be significantly less than this amount multiplied by our effective tax rate due to a number of factors, including, for example, the allocation of a portion of the increase in tax basis to foreign or non - depreciable fixed assets, the impact of the increase in the tax basis on our ability to use foreign tax credits and the rules relating to the amortization of intangible assets.
These laws, regulations and treaties are complex, and the manner they apply to us is sometimes open to interpretations, therefore significant judgments are required in determining our provision for income taxes, deferred tax assets and liabilities balances, and other tax liabilities. We are also regularly under audit by the U.S.
These tax laws, regulations and treaties are complex, and the manner they apply to us is sometimes open to interpretations, therefore significant judgments are required in determining our provision for income taxes, deferred tax assets and liabilities balances, and other tax liabilities. We are also regularly under audit by the U.S.
Risks Related to Our Business Macroeconomic, geopolitical and other challenges and uncertainties could have a negative impact on our business. Our business could be harmed by a systemic market event. Damage to our reputation could harm our business . The impact of a public health emergency may have a material adverse impact on our business and results of operations. 20 Table of Contents Our future success will depend on our response to the demand for new services, products and technologies. The loss of our key employees would materially adversely affect our business. We may not pay dividends on our common stock at any time in the foreseeable future. Our direct market access clearing and non - clearing brokerage operations face intense competition. We are subject to potential losses as a result of our clearing and execution activities. We are exposed to risks associated with our international operations. We are subject to counterparty risk whereby defaults by parties with whom we do business can have an adverse effect on our business, financial condition and results of operations. Any future acquisitions may result in significant transaction expenses, integration and consolidation risks and risks associated with entering new markets, and we may be unable to profitably operate our consolidated company. Because our revenues and profitability depend on trading volume and interest rate levels, they are prone to significant fluctuations and are difficult to predict. We may incur material trading losses from our market making activities. Reduced spreads in securities pricing, levels of trading activity and trading through market makers could harm our business. We may incur losses in our market making activities in the event of failures of our proprietary pricing model. The valuation of the financial instruments we hold may result in large and occasionally anomalous swings in the value of our positions and in our earnings in any period. We are exposed to losses due to lack of perfect information. Rules governing designated market makers may require us to make unprofitable trades or prevent us from making profitable trades. Our risk management policies and procedures may not be fully effective in mitigating our risk exposure in all market environments or against all types of risks.
Risks Related to Our Business Macroeconomic, geopolitical and other challenges and uncertainties could have a negative impact on our business. Our business could be harmed by a systemic market event. Damage to our reputation could harm our business . The impact of a public health emergency may have a material adverse impact on our business and results of operations. Our future success will depend on our response to the demand for new services, products and technologies. The loss of our key employees would materially adversely affect our business. We may not pay dividends on our common stock at any time in the foreseeable future. Our direct market access clearing and non - clearing brokerage operations face intense competition. We are subject to potential losses as a result of our clearing and execution activities. We are exposed to risks associated with our international operations. We are subject to counterparty risk whereby defaults by parties with whom we do business can have an adverse effect on our business, financial condition and results of operations. 19 Table of Contents Any future acquisitions may result in significant transaction expenses, integration and consolidation risks and risks associated with entering new markets, and we may be unable to profitably operate our consolidated company. Because our revenues and profitability depend on trading volume and interest rate levels, they are prone to significant fluctuations and are difficult to predict. We may incur material trading losses from our market making activities. Reduced spreads in securities pricing, levels of trading activity and trading through market makers could harm our business. We may incur losses in our market making activities in the event of failures of our proprietary pricing model. The valuation of the financial instruments we hold may result in large and occasionally anomalous swings in the value of our positions and in our earnings in any period. We are exposed to losses due to lack of perfect information. Rules governing designated market makers may require us to make unprofitable trades or prevent us from making profitable trades. Our risk management policies and procedures may not be fully effective in mitigating our risk exposure in all market environments or against all types of risks.
The agreement the customer signs with IB LLC before the customer is permitted to access the CSP’s services through IB LLC’s platform provides that: [Customer] acknowledges and agrees that [IB LLC] is not responsible for any trading or other losses (including, without limitation, losses due to theft, fraud, cybersecurity breach, loss of control of private keys, or any other loss arising from trading or holding digital assets with [the CSP]) resulting directly or indirectly from or in connection with [Customer’s] relationship with [the CSP] and/or [Customer’s] trading or holding of digital assets, including activity or holdings in the [CSP] Account.
The agreement the customer signs with IB LLC before the customer is permitted to access the CSP’s services through IB LLC’s platform provides that: [Customer] acknowledges and agrees that [IB LLC] is not responsible for any trading or other losses (including, without limitation, losses due to theft, fraud, cybersecurity breach, loss of control of private keys, or any other loss arising from trading, transferring, or holding digital assets with [the CSP]) resulting directly or indirectly from or in connection with [Customer’s] relationship with [the CSP] and/or [Customer’s] trading or holding of digital assets, including activity or holdings in the [CSP] Account.
Risks Related to Laws, Regulations and Litigation Our future efforts to sell shares or raise additional capital may be delayed or prohibited by regulations. Regulatory and legal uncertainties could harm our business. We are subject to risks relating to litigation and potential securities laws liability. Heightened regulatory and legislative requirements and changes in the U.S. and globally have increased our compliance, regulatory and other risks and costs . We may incur additional tax expense or become subject to additional tax liabilities . ‎ 21 Table of Contents Risks Related to Our Intellectual Property, Technology, Cybersecurity and Data Privacy We may not be able to protect our intellectual property rights or may be prevented from using intellectual property necessary for our business. Our reliance on our computer software could cause us great financial harm in the event of any disruption or corruption of our computer software.
Risks Related to Laws, Regulations and Litigation Our future efforts to sell shares or raise additional capital may be delayed or prohibited by regulations. Regulatory and legal uncertainties could harm our business. We are subject to risks relating to litigation and potential securities laws liability. Heightened regulatory and legislative requirements and changes in the U.S. and globally have increased our compliance, regulatory and other risks and costs . We may incur additional tax expense or become subject to additional tax liabilities . ‎ 20 Table of Contents Risks Related to Our Intellectual Property, Technology, Cybersecurity and Data Privacy We may not be able to protect our intellectual property rights or may be prevented from using intellectual property necessary for our business. Our reliance on our computer software could cause us great financial harm in the event of any disruption or corruption of our computer software.
Any failure or perceived failure by us or our third-party service providers to comply with our privacy policies or any applicable laws, regulations, industry standards, or rules relating to data privacy and security, or any compromise of security that results in the theft, unauthorized access, acquisition, use, disclosure, or misappropriation of personal data, could result in significant fines, criminal penalties, monetary damages, regulatory enforcement actions, litigation and reputational harm, one or all of which could have an adverse effect on our business, financial condition and results of operations. ‎ 33 Table of Contents Risks Related to our Cryptocurrency Offering We rely on third-party Cryptocurrency Service Providers (“CSPs”) to provide our customers the ability to access cryptocurrency trading and custody services.
Any failure or perceived failure by us or our third-party service providers to comply with our privacy policies or any applicable laws, regulations, industry standards, or rules relating to data privacy and security, or any compromise of security that results in the theft, unauthorized access, acquisition, use, disclosure, or misappropriation of personal data, could result in significant fines, criminal penalties, monetary damages, regulatory enforcement actions, litigation and reputational harm, one or all of which could have an adverse effect on our business, financial condition and results of operations. ‎ 32 Table of Contents Risks Related to our Cryptocurrency Offering We rely on third-party Cryptocurrency Service Providers (“CSPs”) to provide our customers the ability to access cryptocurrency trading and custody services.
Eligible customers of IB LLC can enroll to access a digital asset exchange and custody services provided by one or more CSPs to buy, sell and hold Cryptocurrency Assets in an account in the customer’s name at the CSP.
Eligible customers of IB LLC or IBUK can enroll to access a digital asset exchange and custody services provided by one or more CSPs to buy, sell and hold Cryptocurrency Assets in an account in the customer’s name at the CSP.
Unless otherwise provided under applicable Rules, [Customer] hereby agree[s] not to bring any action against [IBHK] on any claim arising from a loss occurring at the [CSP], in the absence of circumstances addressed under (a) or (b) above, so long as [IBHK] makes commercially reasonable efforts to assert a claim for recovery against the [CSP]. 34 Table of Contents The CSPs’ failure to safeguard the Cryptocurrency Assets may result in losses to our customers which could have adverse effects on our customers’ confidence in our cryptocurrency offering through CSPs and on our business.
Unless otherwise provided under applicable Rules, [Customer] hereby agree[s] not to bring any action against [IBHK] on any claim arising from a loss occurring at the [CSP], in the absence of circumstances addressed under (a) or (b) above, so long as [IBHK] makes commercially reasonable efforts to assert a claim for recovery against the [CSP]. 33 Table of Contents The CSPs’ failure to safeguard the Cryptocurrency Assets may result in losses to our customers which could have adverse effects on our customers’ confidence in our cryptocurrency offering through CSPs and on our business.
To the extent we need funds to pay such taxes, or for any other purpose, and IBG LLC is unable to provide such funds, it could have a material adverse effect on our business, financial condition and results of operations. 23 Table of Contents We are required to pay Holdings for the benefit relating to additional tax depreciation or amortization deductions we claim as a result of the tax basis step - up our subsidiaries received in connection with our initial public offering (“IPO”) and certain subsequent redemptions of Holdings membership interests.
To the extent we need funds to pay such taxes, or for any other purpose, and IBG LLC is unable to provide such funds, it could have a material adverse effect on our business, financial condition and results of operations. 22 Table of Contents We are required to pay Holdings for the benefit relating to additional tax depreciation or amortization deductions we claim as a result of the tax basis step - up our subsidiaries received in connection with our initial public offering (“IPO”) and certain subsequent redemptions of Holdings membership interests.
We are required to interpret and implement extensive and frequently changing regulatory and legislative requirements in the U.S. and other jurisdictions in which we do business resulting in substantial compliance, regulatory and other risks and costs, including the hiring of additional personnel.
We are required to interpret and implement extensive and frequently changing regulatory and legislative requirements in the U.S. and other jurisdictions in which we do business resulting in substantial compliance, regulatory and other risks and costs, including the cost of hiring additional personnel.
Rules regarding data privacy and security worldwide are continuously evolving and developing, increasing complexity and, as a result, interpretation and implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future.
Rules regarding data privacy and security worldwide are continuously evolving and developing, increasing in complexity and, as a result, interpretation and implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future.
Although we have been at the forefront of many of these developments in the past, we may not be able to keep up with these rapid changes in the future, develop new technology, realize a return on amounts invested in developing new technologies or remain competitive in the future. ‎ 31 Table of Contents New developments in the field of Artificial Intelligence (“AI”) could enable competitors to offer new products or services never before seen in the marketplace.
Although we have been at the forefront of many of these developments in the past, we may not be able to keep up with these rapid changes in the future, develop new technology, realize a return on amounts invested in developing new technologies or remain competitive in the future. ‎ 30 Table of Contents New developments in the field of Artificial Intelligence (“AI”) could enable competitors to offer new products or services never before seen in the marketplace.
Regulatory bodies include, in the U.S., the SEC, FINRA, the Board of Governors of the Federal Reserve System, the Chicago Board Options Exchange, the CME, the CFTC, and the NFA; in Canada, the CIRO and various Canadian securities commissions; in the United Kingdom, the FCA; in Ireland, the CBI; in Switzerland, the FINMA; in Hungary, the MNB; in India, the Securities and Exchange Board of India; in Hong Kong, the SFC; in Japan, the Financial Supervisory Agency and the Japan Securities Dealers Association; in Singapore, the MAS; and in Australia, the Australian Securities and Investment Commission.
Regulatory bodies include, in the U.S., the SEC, FINRA, the Board of Governors of the Federal Reserve System, the Chicago Board Options Exchange, the CME, the CFTC, and the NFA; in Canada, the CIRO and various Canadian securities commissions; in the United Kingdom, the FCA; in Ireland, the CBI; in Switzerland, the FINMA; in India, the Securities and Exchange Board of India; in Hong Kong, the SFC; in Japan, the Financial Supervisory Agency and the Japan Securities Dealers Association; in Singapore, the MAS; and in Australia, the Australian Securities and Investment Commission.
Any failure on our part to anticipate or respond adequately to technological advancements, customer requirements or changing industry standards, or any significant delays in the development, introduction or availability of new services, products or enhancements could have a material adverse effect on our business, financial condition and results of operations. 25 Table of Contents The loss of our key employees would materially adversely affect our business.
Any failure on our part to anticipate or respond adequately to technological advancements, customer requirements or changing industry standards, or any significant delays in the development, introduction or availability of new services, products or enhancements could have a material adverse effect on our business, financial condition and results of operations. 24 Table of Contents The loss of our key employees would materially adversely affect our business.
We cannot assure you that we will be able to compete effectively or efficiently with current or future competitors. These increasing levels of competition in the online trading industry could significantly harm this aspect of our business. ‎ 26 Table of Contents We are subject to potential losses as a result of our clearing and execution activities.
We cannot assure you that we will be able to compete effectively or efficiently with current or future competitors. These increasing levels of competition in the online trading industry could significantly harm this aspect of our business. ‎ 25 Table of Contents We are subject to potential losses as a result of our clearing and execution activities.
As a result of these regulations, our future efforts to sell shares or raise additional capital may be delayed or prohibited. We may be subject to similar restrictions in other jurisdictions in which we operate. ‎ 29 Table of Contents Regulatory and legal uncertainties could harm our business. The securities and derivatives businesses are heavily regulated.
As a result of these regulations, our future efforts to sell shares or raise additional capital may be delayed or prohibited. We may be subject to similar restrictions in other jurisdictions in which we operate. ‎ 28 Table of Contents Regulatory and legal uncertainties could harm our business. The securities and derivatives businesses are heavily regulated.
We are a holding company and our primary assets are our approximately 25.4% equity interest in IBG LLC and our controlling interest and related rights as the sole managing member of IBG LLC and, as such, we operate and control all of the business and affairs of IBG LLC and are able to consolidate IBG LLC’s financial results into our financial statements.
We are a holding company and our primary assets are our approximately 25.8% equity interest in IBG LLC and our controlling interest and related rights as the sole managing member of IBG LLC and, as such, we operate and control all of the business and affairs of IBG LLC and are able to consolidate IBG LLC’s financial results into our financial statements.
Any of these events, particularly if they (individually or in the aggregate) result in a loss of confidence in our company or electronic brokerage firms in general, could have a material adverse effect on our business, financial condition and results of operations. We are subject to stringent and complex data privacy rules.
Any of these events, particularly if they (individually or in the aggregate) result in a loss of confidence in our company or electronic brokerage firms in general, could have a material adverse effect on our business, financial condition and results of operations. ‎ 31 Table of Contents We are subject to stringent and complex data privacy rules.
These risks could have a material adverse effect on our business, financial condition and results of operations. ‎ 24 Table of Contents Our business could be harmed by a systemic market event. Some market participants could be overleveraged.
These risks could have a material adverse effect on our business, financial condition and results of operations. ‎ 23 Table of Contents Our business could be harmed by a systemic market event. Some market participants could be overleveraged.
Ltd. are subject to similar change in control regulations promulgated by the CIRO in Canada, the FCA in the United Kingdom, the CBI in Ireland, the FINMA in Switzerland, the MNB in Hungary, the SFC in Hong Kong, and the MAS in Singapore, respectively.
Ltd. are subject to similar change in control regulations promulgated by the CIRO in Canada, the FCA in the United Kingdom, the CBI in Ireland, the FINMA in Switzerland, the SFC in Hong Kong, and the MAS in Singapore, respectively.
Risks Related t o Cryptocurrency We rely on third-party Cryptocurrency Service Providers (“CSPs”) to provide our customers the ability to access cryptocurrency trading and custody services. A data breach at the CSP may result in irreversible losses, which would adversely affect our customers and our business. We may encounter technical issues which would result in disruption or interruption of our customers’ access to their CSP accounts. Changes in laws and regulations regarding cryptocurrency may negatively impact our ability to enable our customers to buy, hold and sell cryptocurrencies in the future and may adversely affect our business. A loss event incurred by the CSP may adversely impact our operating results. ‎ 22 Table of Contents Risks Related to Our Company Structure Future sales of our common stock in the public market could lower our stock price, and any additional capital raised by us through the sale of equity or convertible securities may dilute your ownership in us.
Risks Related t o Cryptocurrency We rely on third-party Cryptocurrency Service Providers (“CSPs”) to provide our customers the ability to access cryptocurrency trading and custody services. A data breach at the CSP may result in irreversible losses, which would adversely affect our customers and our business. We may encounter technical issues which would result in disruption or interruption of our customers’ access to their CSP accounts. Changes in laws and regulations regarding cryptocurrency may negatively impact our ability to enable our customers to buy, hold and sell cryptocurrencies in the future and may adversely affect our business. ‎ 21 Table of Contents Risks Related to Our Company Structure Future sales of our common stock in the public market could lower our stock price, and any additional capital raised by us through the sale of equity or convertible securities may dilute your ownership in us.
Assuming no anti - dilution adjustments based on combinations or divisions of our common stock, the offerings referred to above could result in the issuance by us of up to an additional approximately 314.0 million shares of common stock. It is possible, however, that such shares could be issued in one or a few large transactions.
Assuming no anti - dilution adjustments based on combinations or divisions of our common stock, the offerings referred to above could result in the issuance by us of up to an additional approximately 313.6 million shares of common stock. It is possible, however, that such shares could be issued in one or a few large transactions.
IB LLC does not provide execution, custody or safeguarding services for the customers’ Cryptocurrency Assets and does not maintain (or have access to) the cryptographic key information and wallets necessary to access the Cryptocurrency Assets, nor does IB LLC have any legal title or claim to those Cryptocurrency Assets.
IB LLC and IBUK do not provide execution, custody or safeguarding services for the customers’ Cryptocurrency Assets and do not maintain (or have access to) the cryptographic key information and wallets necessary to access the Cryptocurrency Assets, nor do IB LLC or IBUK have any legal title or claim to those Cryptocurrency Assets.
The size and occurrence of these offerings may be affected by market conditions. We may also issue additional shares of common stock or convertible debt securities to finance future acquisitions or business combinations. We currently have approximately 107.0 million outstanding shares of common stock.
The size and occurrence of these offerings may be affected by market conditions. We may also issue additional shares of common stock or convertible debt securities to finance future acquisitions or business combinations. We currently have approximately 108.9 million outstanding shares of common stock.
Thomas Peterffy, our founder and Chairman, and his affiliates beneficially own approximately 91.3% of the economic interests and all of the voting interests in Holdings , which owns all of our Class B common stock, representing approximately 74.6% of the combined voting power of all classes of our voting stock. As a result, Mr.
Thomas Peterffy, our founder and Chairman, and his affiliates beneficially own approximately 91.4% of the economic interests and all of the voting interests in Holdings , which owns all of our Class B common stock, representing approximately 74.2% of the combined voting power of all classes of our voting stock. As a result, Mr.
The tax basis increase of $12.4 billion assumes that (a) all remaining IBG LLC membership interests held by Holdings are purchased by us in one or more taxable transactions and (b) such purchases in the future are made at prices that reflect the closing share price as of December 31, 2023.
The tax basis increase of $31.2 billion assumes that (a) all remaining IBG LLC membership interests held by Holdings are purchased by us in one or more taxable transactions and (b) such purchases in the future are made at prices that reflect the closing share price as of December 31, 2024.
During 2023, approximately 30% of our net revenues were generated by our operating subsidiaries outside the U.S. We are exposed to risks and uncertainties inherent in doing business in international markets, particularly in the heavily regulated brokerage industry.
During 2024, approximately 31% of our net revenues were generated by our operating subsidiaries outside the U.S. We are exposed to risks and uncertainties inherent in doing business in international markets, particularly in the heavily regulated brokerage industry.
Based on facts and assumptions as of December 31, 2023, including that subsequent purchases of IBG LLC interests will occur in fully taxable transactions, the potential tax basis increase resulting from the historical and future purchases of the IBG LLC interests held by Holdings could be as much as $12.4 billion.
Based on facts and assumptions as of December 31, 2024, including that subsequent purchases of IBG LLC interests will occur in fully taxable transactions, the potential tax basis increase resulting from the historical and future purchases of the IBG LLC interests held by Holdings could be as much as $31.2 billion.
In the U.S., we are subject to rules including the Gramm-Leach-Bliley Act of 1999 and Section 5(c) of the Federal Trade Commission Act; internationally, we are subject to the EU’s General Data Protection Regulation (“GDPR”), the Data Protection Act 2018 in the U.K, the Personal Information Protection Law of the People’s Republic of China, and other data privacy rules.
In the U.S., we are subject to rules including the Gramm-Leach-Bliley Act of 1999 and Section 5(c) of the Federal Trade Commission Act; internationally, we are subject to the General Data Protection Regulation (“GDPR”) of the EU and the U.K., the Personal Information Protection Law of the People’s Republic of China, and other applicable data privacy rules and regulations.
A failure to comply with these requirements and expectations, even if inadvertent, or resolve any identified deficiencies, could result in increased regulatory oversight and restrictions, enforcement proceedings, penalties and fines. ‎ 30 Table of Contents We may incur additional tax expense or become subject to additional tax liabilities .
A failure to comply with these requirements and expectations, even if inadvertent, could result in increased regulatory oversight and restrictions, enforcement proceedings, penalties and fines. ‎ 29 Table of Contents We may incur additional tax expense or become subject to additional tax liabilities .
Interactive Brokers Canada, Inc., Interactive Brokers (U.K.) Limited, Interactive Brokers Ireland Limited, IBKR Financial Services AG, Interactive Brokers Central Europe Zrt., Interactive Brokers Hong Kong Limited, and Interactive Brokers Singapore Pte.
Interactive Brokers Canada, Inc., Interactive Brokers (U.K.) Limited, Interactive Brokers Ireland Limited, IBKR Financial Services AG, Interactive Brokers Hong Kong Limited, and Interactive Brokers Singapore Pte.
Any unfavorable resolution of these and other uncertainties may have a significant adverse impact on our effective tax rate and results of operations.
These new tax law changes bring significant risks and uncertainties. Any unfavorable resolution of these and other uncertainties may have a significant adverse impact on our effective tax rate and results of operations.
As market makers, we provide liquidity by buying from sellers and selling to buyers. Quite often, we trade with others who have different information than we do, and as a result, we may accumulate unfavorable positions preceding large price movements in companies. Should the frequency or magnitude of these events increase, our losses will likely increase correspondingly.
Quite often, we trade with others who have different information than we do, and as a result, we may accumulate unfavorable positions preceding large price movements in companies. Should the frequency or magnitude of these events increase, our losses will likely increase correspondingly.
We are subject to the tax laws and regulations of the U.S. and its states and municipalities, as well as numerous foreign jurisdictions in which we do business.
We are subject to the tax laws and regulations of the U.S., its states and municipalities, and numerous foreign jurisdictions.
Future regulatory developments, including the treatment of certain cryptocurrency assets for U.S. federal income tax and foreign tax purposes, could have an adverse effect on our cryptocurrency offering through CSPs and on our business. A loss event incurred by a CSP may adversely impact our operating results.
Future regulatory developments, including the treatment of certain cryptocurrency assets for U.S. federal income tax and foreign tax purposes, could have an adverse effect on our cryptocurrency offering through CSPs and on our business.
Since the second quarter of 2011, we have declared and paid a quarterly cash dividend of $0.10 per share. Although not required, we currently intend to pay quarterly dividends of $0.10 per share to our common stockholders for the foreseeable future. Our direct market access clearing and non - clearing brokerage operations face intense competition.
Although not required, we currently intend to pay quarterly dividends of $0.25 per share to our common stockholders for the foreseeable future. Our direct market access clearing and non - clearing brokerage operations face intense competition.
IBHK notifies its customers that exchange and sub-custody services are provided by a CSP. IBHK does not maintain (or have access to) the cryptographic key information and wallets necessary to access the Cryptocurrency Assets, nor does IBHK have any beneficial claim to those Cryptocurrency Assets.
IBHK does not maintain (or have access to) the cryptographic key information and wallets necessary to access the Cryptocurrency Assets, nor does IBHK have any beneficial claim to those Cryptocurrency Assets.
Our revenues are dependent on the level of trading activity on securities and derivatives exchanges in the U.S. and abroad and on the general level of interest rates.
Because our revenues and profitability depend on trading volume and interest rate levels, they are prone to significant fluctuations and are difficult to predict. Our revenues are dependent on the level of trading activity on securities and derivatives exchanges in the U.S. and abroad and on the general level of interest rates.
In the event of a flaw in our pricing model and/or a failure in the related software, our pricing model may lead to unexpected and/or unprofitable trades, which may result in material trading losses. 28 Table of Contents The valuation of the financial instruments we hold may result in large and occasionally anomalous swings in the value of our positions and in our earnings in any period.
In the event of a flaw in our pricing model and/or a failure in the related software, our pricing model may lead to unexpected and/or unprofitable trades, which may result in material trading losses.
If prices of derivatives and their underlying securities close out of alignment, there may be large and occasionally anomalous swings in the value of our positions daily and, accordingly, in our earnings in any period. This is especially true on the last business day of each calendar quarter. We are exposed to losses due to lack of perfect information.
If prices of derivatives and their underlying securities close out of alignment, there may be large and occasionally anomalous swings in the value of our positions daily and, accordingly, in our earnings in any period.
In addition, as a clearing member of several central clearing houses, we participate in the mutualization of risk and could incur financial losses in the event of default by other clearing members.
In addition, as a clearing member of several central clearing houses, we participate in the mutualization of risk and could incur financial losses in the event of default by other clearing members. Although we regularly review our credit exposures, default risk may arise from events or circumstances that are difficult to detect or foresee.
If periods of decreased performance, outages or delays on the Internet occur frequently, growth in the usage of our web-based products could be delayed or decline, which could have a material adverse effect on our business, financial condition and results of operations. 32 Table of Contents We could be the target of a cyber-attack or experience a cybersecurity incident that impairs internal systems, degrades services we provide to customers, or results in a data compromise, causing reputational or monetary damages as a consequence.
If periods of decreased performance, outages or delays on the Internet occur frequently, growth in the usage of our web-based products could be delayed or decline, which could have a material adverse effect on our business, financial condition and results of operations.
Eligible customers of IBHK can enroll to trade and hold Cryptocurrency Assets through a relationship IBHK has established with a CSP, which is an SFC-licensed digital asset exchange and custodian. The Cryptocurrency Assets are sub-custodied by the CSP on an omnibus basis for the benefit of the customers of IBHK.
Customers of IBUK sign an agreement containing a substantially identical provision prior to being permitted to access the CSP’s services through IBUK’s platform. Eligible customers of IBHK can enroll to trade and hold Cryptocurrency Assets through a relationship IBHK has established with a CSP, which is an SFC-licensed digital asset exchange and custodian.
Any future acquisitions may result in significant transaction expenses and risks associated with entering new markets in addition to integration and consolidation risks. Because acquisitions historically have not been a core part of our growth strategy, we have little experience in successfully utilizing acquisitions.
Any future acquisitions may result in significant transaction expenses, integration and consolidation risks and risks associated with entering new markets, and we may be unable to profitably operate our consolidated company. Although our growth strategy has not focused historically on acquisitions, we may in the future engage in evaluations of potential acquisitions and new businesses.
We may not have sufficient management, financial and other resources to integrate any such future acquisitions or to successfully operate new businesses and we may be unable to profitably operate our expanded company. Because our revenues and profitability depend on trading volume and interest rate levels, they are prone to significant fluctuations and are difficult to predict.
Because acquisitions historically have not been a core part of our growth strategy, we have little experience in successfully utilizing acquisitions. We may not have sufficient management, financial and other resources to integrate any such future acquisitions or to successfully operate new businesses and we may be unable to profitably operate our expanded company.
Although our growth strategy has not focused historically on acquisitions, we may in the future engage in evaluations of potential acquisitions and new businesses. We may not have the financial resources necessary to consummate any acquisitions in the future or the ability to obtain the necessary funds on satisfactory terms.
We may not have the financial resources necessary to consummate any acquisitions in the future or 26 Table of Contents the ability to obtain the necessary funds on satisfactory terms. Any future acquisitions may result in significant transaction expenses and risks associated with entering new markets in addition to integration and consolidation risks.
Removed
Although we regularly review our credit exposures, default risk may arise from events or circumstances that are difficult to detect or foresee. 27 Table of Contents Any future acquisitions may result in significant transaction expenses, integration and consolidation risks and risks associated with entering new markets, and we may be unable to profitably operate our consolidated company.
Added
From the second quarter of 2011 through the first quarter of 2024, we declared and paid a quarterly cash dividend of $0.10 per share. Starting in the second quarter of 2024, we increased the quarterly cash dividend from $0.10 per share to $0.25 per share.
Removed
In March 2022, the SEC published Staff Accounting Bulletin No. 121 (“SAB 121”), which provides interpretive accounting and disclosure guidance to entities that have obligations to safeguard crypto-assets held for their platform users, whether directly or through an agent or another third party acting on its behalf.
Added
The valuation of the financial instruments we hold may result in large and occasionally anomalous swings in the value of our positions and in our earnings in any period.
Removed
SAB 121 requires an entity to recognize a liability to reflect its obligation to safeguard the crypto-assets held for its platform users and a corresponding safeguarding asset on its balance sheet, even when the entity does not control the crypto-assets.
Added
This is especially true on the last business day of each calendar quarter. 27 Table of Contents We are exposed to losses due to lack of perfect information. As market makers, we provide liquidity by buying from sellers and selling to buyers.
Removed
Even though we are not responsible for the safeguarding of crypto-assets at the CSPs, our customers’ crypto-assets held at the CSPs are deemed to be in scope of SAB 121. Pursuant to SAB 121, we measure the crypto-asset safeguarding liability and the corresponding safeguarding asset at the fair value of the crypto-assets held by the CSPs for our customers.
Added
In addition, our tax liabilities are subject to other significant risks and uncertainties, including those arising from potential changes in laws and regulations in the countries in which we do business , the possibility of tax controversy related to adverse determinations with respect to the application of existing laws, changes in our business or structure, and changes in the valuation of our deferred tax assets and liabilities.
Removed
Because, under the guidance, the measurement of the safeguarding asset shall take into account any potential loss events, if a CSP were to suffer a loss event that impacted our customers’ crypto-assets held by that CSP, then (subject to consultation with the SEC’s Office of the Chief Accountant) we may be required to recognize a reduction in the value of the safeguarding asset at the time of the CSP’s loss event, without recognizing a corresponding reduction in the value of the safeguarding liability, even though we have no legal obligation to our customers with respect to the crypto-assets held by the CSPs.
Added
We could be the target of a cyber-attack or experience a cybersecurity incident that impairs internal systems, degrades services we provide to customers, or results in a data compromise, causing reputational or monetary damages as a consequence.
Removed
The recognition of such loss event could have a material adverse effect on our results of operations.
Added
The Cryptocurrency Assets are sub-custodied by the CSP on an omnibus basis for the benefit of the customers of IBHK. IBHK notifies its customers that exchange and sub-custody services are provided by a CSP.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

6 edited+5 added−6 removed1 unchanged
Biggest changeWhere we engage or rely on third parties, including suppliers, vendors, and service providers , our information security personnel have processes in place to identify and manage risks from cybersecurity threats associated with our use of such third parties. ‎ 35 Table of Contents Board Oversight of Cybersecurity Risks Our Board of Directors receives periodic updates on cybersecurity matters from our Chief Executive Officer (based on consultation with our Chief Information Security Officer (“CISO”) and other senior members of our Information Security and/or Technology teams).
Biggest changeOur Board of Directors receives periodic updates on cybersecurity matters and the overall state of our cybersecurity program from our CEO (based on consultation with our CISO and other senior members of our Information Security and/or Technology teams). Assessment of Cybersecurity Risk The potential impact of risks from cybersecurity threats to the Company is assessed on an ongoing basis.
For additional information about cybersecurity risks, see Part I, Item 1A, “Risk Factors” in this Annual Report on Form 10-K. 36 Table of Contents
For additional information about cybersecurity risks, see Part I, Item 1A, “Risk Factors” in this Annual Report on Form 10-K. 35 Table of Contents
The Company’s management, including through its oversight of the Company’s policies and procedures regarding cybersecurity, is actively involved in the prevention, detection, mitigation, and remediation of cybersecurity incidents impacting the Company. Management’s oversight is augmented through the Company’s Enterprise Risk Management Framework, which includes risk and control assessments related to the Company’s cybersecurity program.
The Company’s management, including through its oversight of the Company’s policies and procedures regarding cybersecurity, is actively involved in the prevention, detection, mitigation, and remediation of cybersecurity incidents impacting or with the potential to impact the Company. Management’s oversight is augmented through the Company’s Enterprise Risk Management Framework, which includes risk and control assessments related to the Company’s cybersecurity program.
Management's Role in Cybersecurity Risk Management The Company’s management, including the Company’s Chief Information Officer, Executive Vice President of Technology, and CISO, are responsible for assessing and managing material risks from cybersecurity threats. Members of Company management possess relevant expertise in various disciplines that are key to effectively managing such risks. Specifically: Dr.
Management and Board Oversight of Cybersecurity Risks The Company’s management, including the Company’s Executive Vice President of Technology and Chief Information Security Officer (“CISO”), are responsible for assessing and managing material risks from cybersecurity threats. Members of Company management possess relevant expertise in various disciplines that are key to effectively managing such risks.
ITEM 1C. CYBERSECURITY As part of our overall risk management framework, we have processes in place to identify, assess, and manage material risks from cybersecurity threats. Cybersecurity Program Overview Our cybersecurity program is designed to identify, assess, and manage cyber risks. The program involves risk assessments, implementation of security measures, and ongoing monitoring of systems and networks.
As part of our overall risk management framework, our cybersecurity program is designed to identify, assess, and manage cyber risks. The program involves risk assessments, implementation of security measures, and ongoing monitoring of systems and networks. We continually evaluate the current threat landscape to identify material risks arising from new and evolving cybersecurity threats.
Additionally, the Company’s Internal Audit Group periodically audits aspects of the Company’s cybersecurity program and provides reports to the Board’s Audit Committee, and an external audit firm conducts an annual SOC 2 attestation of the Company’s information security controls. Assessment of Cybersecurity Risk The potential impact of risks from cybersecurity threats to the Company is assessed on an ongoing basis.
Additionally, the Company’s Internal Audit Group periodically audits aspects of the Company’s cybersecurity program and reports the results of such audits to the Board’s Audit Committee, and an external audit firm conducts an annual SOC 2 attestation of the Company’s information security controls.
Removed
We continually evaluate the current threat landscape in an effort to identify material risks arising from new and evolving cybersecurity threats. We engage external experts, including cybersecurity assessors, consultants, and auditors to evaluate cybersecurity measures and risk management processes.
Added
ITEM 1C. CYBERSECURITY We are a global financial services firm, with a longstanding commitment to providing a reliable and secure trading environment for our customers. Technology is at the core of our business, with customers, exchanges, clearing houses, counterparties, and third-party service providers interacting with our systems and applications on an ongoing basis.
Removed
In addition, a member of senior management responsible for the Company’s Information Security team provides an annual briefing to our Board of Directors regarding the overall state of our cybersecurity program, information on the current cybersecurity threat landscape, risks from cybersecurity threats and any cybersecurity incidents that are reasonably likely to materially affect, or which have materially affected, the Company.
Added
As a consequence, we are subject to significant cybersecurity risks. Moreover, such risks have been increasing over time, due to the growing sophistication of cyber threat actors, geo-political instability, and advances in technology, such as AI, which are known to have been misused in cyber-attacks.
Removed
Thomas Frank , Executive Vice President and Chief Information Officer: Dr. Frank has been with the Company since 1985 and was instrumental in the development of the Company’s early market making systems. Dr. Frank became Chief Information Officer in 2006. Dr. Frank is responsible for the Company’s technical infrastructure and operations and information security, among other duties. Dr.
Added
If a cybersecurity incident occurs, incident response procedures are in place to ensure that the occurrence is appropriately reported to the CISO and senior management. Where necessary, business continuity plans are mobilized to minimize disruption to business operations.
Removed
Frank is a member of the Board of Directors of OCC. Dr. Frank received an S.B. and a Ph.D. in Physics from the Massachusetts Institute of Technology.  Somayajulu (Soma) Bulusu , Executive Vice President of Technology: Mr. Bulusu joined the Company as EVP of Technology in February 2024. Mr.
Added
The Company has established the Cyber Materiality Committee (“CMC”), whose purpose is to review cybersecurity incidents escalated to it by our Threat & Incident Management Team and determine whether they are material and thus require a disclosure on Form 8-K.
Removed
Bulusu has over 25 years of experience in engineering, product, and service delivery. Mr. Bulusu joined the Company from Chewy, Inc., where he led the Information Technology and Engineering teams. His previous roles include leadership positions at Amazon, Nuance, and TouchCommerce.  Dr. Boris Kogan , Chief Information Security Officer : Dr.
Added
CMC’s membership includes the Chief Executive Officer (“CEO”), the Chief Financial Officer, the Executive Vice President of Technology, the CISO, and other senior leaders.
Removed
Kogan has served as the Company’s Chief Information Security Officer since 2016. Dr. Kogan has over 20 years of cybersecurity management experience in the financial services sector. Earlier in his career, after obtaining a Ph.D. in Computer Science from Princeton University, Dr. Kogan served on the faculty of George Mason University, where he conducted government-sponsored research in cybersecurity.

Item 2. Properties

Properties — owned and leased real estate

3 edited+0 added−0 removed0 unchanged
Biggest changeLocation Space (sq. feet) Principal Usage North America Greenwich, CT 163,510 Headquarters Chicago, IL 100,871 Office space and data center New York, NY 16,940 Office space Other (9 locations) 39,328 Office space and data center Europe Budapest, Hungary 36,782 Office space Zug, Switzerland 36,635 Office space and data center Dublin, Ireland 17,982 Office space London, United Kingdom 17,457 Office space Tallinn, Estonia 12,731 Office space Other (2 locations) 2,769 Office space Asia - Pacific Mumbai, India 81,553 Office space Hong Kong 26,020 Office space and data center Other (6 locations) 20,444 Office space ‎ 37 Table of Contents
Biggest changeLocation Space (sq. feet) Principal Usage North America Greenwich, CT 163,510 Headquarters Chicago, IL 100,871 Office space and data center New York, NY 16,940 Office space Other (11 locations) 39,328 Office space and data center Europe Zug, Switzerland 36,635 Office space Budapest, Hungary 32,829 Office space Dublin, Ireland 17,982 Office space and data center London, United Kingdom 17,457 Office space Tallinn, Estonia 12,731 Office space Other (4 locations) 2,769 Office space and data center Asia - Pacific Mumbai, India 81,553 Office space and data center Hong Kong 26,020 Office space and data center Other (9 locations) 19,836 Office space and data center ‎ 36 Table of Contents
ITEM 2. PROPE RTIES Our headquarters are located in Greenwich, Connecticut. We lease office and data center facilities in 27 cities throughout the world where we conduct our operations as set forth below. We believe our present facilities, together with our current options to extend lease terms, are adequate for our current needs.
ITEM 2. PROPE RTIES Our headquarters are located in Greenwich, Connecticut. We lease office and data center facilities in 34 cities throughout the world where we conduct our operations as set forth below. We believe our present facilities, together with our current options to extend lease terms, are adequate for our current needs.
The table below presents certain information with respect to our leased facilities as of December 31, 2023.
The table below presents certain information with respect to our leased facilities as of December 31, 2024.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed12 unchanged
Biggest changeMost of our companies are regulated under some or all of the following: state securities laws, U.S. and foreign securities, commodities and financial services laws and the rules of the more than 150 exchanges, market centers and self - regulatory organizations of which one or more of our companies may be members.
Biggest changeMost of our companies are regulated under some or all of the following: state securities laws, U.S. and foreign securities, commodities and financial services laws and the rules of the more than 160 exchanges, market centers and self - regulatory organizations of which one or more of our companies may be members.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

13 edited+3 added−0 removed1 unchanged
Biggest changeThe stock performance graph shall not be deemed to be incorporated by reference into any of our filings under the Securities Act or the Exchange Act, except to the extent that we specifically incorporate the same by reference, nor shall it be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulations 14A or 14C or to the liabilities of Section 18 of the Exchange Act. 39 Table of Contents Use of Proceeds On July 26, 2023, the Company filed a Prospectus Supplement on Form 424B (File Number 333-273451) with the SEC to re-register up to 630,000 shares of common stock, offering the opportunity for eligible persons to receive awards in the form of an offer to receive such shares by participating in one or more promotions that are designed to attract new customers to the Company’s brokerage platform, increase assets held with the Company’s brokerage business and enhance customer loyalty.
Biggest changeUse of Proceeds On July 26, 2023, the Company filed a Prospectus Supplement on Form 424B (File Number 333-273451) with the SEC to re-register up to 630,000 shares of common stock, offering the opportunity for eligible persons to receive awards in the form of an offer to receive such shares by participating in one or more promotions that are designed to attract new customers to the Company’s brokerage platform, increase assets held with the Company’s brokerage business and enhance customer loyalty.
The comparison assumes $100 was invested on December 31, 2018 in our common stock and each of the foregoing indices and assumes reinvestment of dividends before consideration of income taxes. ___________________________ The Nasdaq Financial - 100 Index includes 100 of the largest domestic and international financial securities listed on The Nasdaq Stock Market based on market capitalization.
The comparison assumes $100 was invested on December 31, 2019 in our common stock and each of the foregoing indices and assumes reinvestment of dividends before consideration of income taxes. ___________________________ The Nasdaq Financial - 100 Index includes 100 of the largest domestic and international financial securities listed on The Nasdaq Stock Market based on market capitalization.
Securities Authorized for Issuance under Equity Compensation Plans The table below presents information about shares of common stock available for future awards under all the Company’s equity compensation plans as of December 31, 2023 . The Company has not made grants of common stock outside of its equity compensation plans.
Securities Authorized for Issuance under Equity Compensation Plans The table below presents information about shares of common stock available for future awards under all the Company’s equity compensation plans as of December 31, 2024 . The Company has not made grants of common stock outside of its equity compensation plans.
On April 20, 2023, the Company’s stockholders approved an additional 10,000,000 shares to be distributed under the Plan. This increased the total number of shares available to be distributed under the Plan to 40,000,000 shares, from 30,000,000 shares. ‎ ‎ ‎ 40 Table of Contents
On April 20, 2023, the Company’s stockholders approved an additional 10,000,000 shares to be distributed under the Plan. This increased the total number of shares available to be distributed under the Plan to 40,000,000 shares, from 30,000,000 shares.
Number of securities to be Number of securities issued upon exercise of Weighted-average exercise remaining available for outstanding options, price of outstanding options future awards under warrants and rights warrants and rights equity compensation plans (1) Equity compensation plans approved by security holders N/A N/A 9,996,406 Total — — 9,996,406 ___________________________ (1) Amount represents restricted stock units available for future issuance of grants under the Company’s amended 2007 Stock Incentive Plan (the “Plan”).
Number of securities to be Number of securities issued upon exercise of Weighted-average exercise remaining available for outstanding options, price of outstanding options future awards under warrants and rights warrants and rights equity compensation plans (1) Equity compensation plans approved by security holders N/A N/A 9,420,112 Total — — 9,420,112 ___________________________ (1) Amount represents restricted stock units available for future issuance of grants under the Company’s amended 2007 Stock Incentive Plan (the “Plan”).
They include companies classified according to the Industry Classification Benchmark as Financials, which are included within the Nasdaq Bank, Nasdaq Insurance, and Nasdaq Other Finance Indexes. The S&P 500 Index includes 500 large cap common stocks actively traded in the U.S.
They include companies classified according to the Industry Classification Benchmark as Financials, which are included within the Nasdaq Bank, Nasdaq Insurance, and Nasdaq Other Finance Indexes. ‎ 38 Table of Contents The S&P 500 Index includes 500 large cap common stocks actively traded in the U.S.
As of February 20, 2024, there were 35 holders of record, which does not reflect those shares held beneficially or those shares held in “street” name. Accordingly, the number of beneficial owners of our common stock exceeds this number.
Holders of Record As of February 19, 2025, there were 39 holders of record, which does not reflect those shares held beneficially or those shares held in “street” name. Accordingly, the number of beneficial owners of our common stock exceeds this number.
On July 27, 2023, the Company filed a Prospectus Supplement on Form 424B5 (File Number 333-273451) with the SEC to issue 2,632,748 shares of common stock (with a fair value of $229 million) in exchange for an equivalent number of shares of member interests in IBG LLC.
On July 25, 2024, the Company filed a Prospectus Supplement on Form 424B5 (File Number 333-273451) with the SEC to issue 333,000 shares of common stock (with a fair value of $39 million) in exchange for an equivalent number of shares of member interests in IBG LLC, in accordance with the Exchange Agreement.
ITEM 5. MA RKET FOR REGISTRANT’S COMMON EQUITY; RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Common Stock Information Interactive Brokers Group Inc.’s Class A common stock trades under the symbol “IBKR” on Nasdaq.
ITEM 5. MA RKET FOR REGISTRANT’S COMMON EQUITY; RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information for Common Stock Interactive Brokers Group Inc.’s Class A common stock trades under the symbol “IBKR” on Nasdaq. There is no public trading market for our Class B common stock, which is held by Holdings.
Thomas Peterffy and his affiliates from approximately 84.6% at the IPO to approximately 91.3% as of December 31 , 2023. See Note 4 – “Equity and Earnings per Share” and Note 10 – “Employee Incentive Plans” to the financial statements in Part II, Item 8 of this Annual Report on Form 10-K.
See Note 4 – “Equity and Earnings per Share” and Note 10 – “Employee Incentive Plans” to the financial statements in Part II, Item 8 of this Annual Report on Form 10-K.
Dividends and Other Restrictions We currently intend to pay quarterly dividends of $0.10 per share to our common stockholders for the foreseeable future. Stockholder Return Performance Graph The graph below compares cumulative total stockholder return on our common stock, the S&P 500 Index and the Nasdaq Financial - 100 Index from December 31, 2018 to December 31, 2023.
Stockholder Return Performance Graph The graph below compares cumulative total stockholder return on our common stock, the S&P 500 Index and the Nasdaq Financial - 100 Index from December 31, 2019 to December 31, 2024.
From 2019 through 2023, the Company issued 420,000 shares and an additional 50,000 shares in January 2024 to IBG LLC for distribution to eligible customers of certain of its subsidiaries.
The Company has authorized a total of 1,000,000 shares of common stock to be issued under these promotions. From 2019 through 2024, the Company issued 620,000 shares to IBG LLC for distribution to eligible customers of certain of its subsidiaries.
As a consequence of these redemption transactions, and distribution of shares to employees , IBG, Inc.’s interest in IBG LLC has increased to approximately 25.4%, with Holdings owning the remaining 74.6% as of December 31 , 2023. The redemptions also resulted in an increase in the Holdings interest held by Mr.
As a consequence of redemption transactions in accordance with the Exchange Agreement, distribution of shares to customers under one or more promotions, and distribution of shares to employees pursuant to the Company’s amended 2007 Stock Incentive Plan , IBG, Inc.’s interest in IBG LLC has increased to approximately 25.8%, with Holdings owning the remaining 74.2% as of December 31 , 2024.
Added
Dividends and Other Restrictions We currently intend to pay quarterly dividends of $0.25 per share to our common stockholders for the foreseeable future. For more information regarding dividends see Note 4 – “Equity and Earnings per Share” to the consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.
Added
The stock performance graph shall not be deemed to be incorporated by reference into any of our filings under the Securities Act or the Exchange Act, except to the extent that we specifically incorporate the same by reference, nor shall it be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulations 14A or 14C or to the liabilities of Section 18 of the Exchange Act.
Added
The redemptions also resulted in an increase in the Holdings interest held by Mr. Thomas Peterffy and his affiliates from approximately 84.6% at the IPO to approximately 91.4% as of December 31 , 2024.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

114 edited+12 added−18 removed59 unchanged
Biggest changePeriod Trades Change Trades Change Trades Change Trades Change Trading Day 2019 302,289 26,346 17,136 345,771 1,380 2020 620,405 105% 56,834 116% 27,039 58% 704,278 104% 2,795 2021 871,319 40% 78,276 38% 32,621 21% 982,216 39% 3,905 2022 735,619 (16%) 70,049 (11%) 32,863 1% 838,531 (15%) 3,347 2023 670,263 (9%) 58,580 (16%) 36,725 12% 765,568 (9%) 3,075 CONTRACT AND SHARE VOLUMES: (in thousands, except %) TOTAL Options % Futures 1 % Stocks % Period (contracts) Change (contracts) Change (shares) Change 2019 390,739 128,770 176,752,967 2020 624,035 60% 167,078 30% 338,513,068 92% 2021 887,849 42% 154,866 (7%) 771,273,709 128% 2022 908,415 2% 207,138 34% 330,035,586 (57%) 2023 1,020,736 12% 209,034 1% 252,742,847 (23%) ALL CUSTOMERS Options % Futures 1 % Stocks % Period (contracts) Change (contracts) Change (shares) Change 2019 349,287 126,363 167,826,490 2020 584,195 67% 164,555 30% 331,263,604 97% 2021 852,169 46% 152,787 (7%) 766,211,726 131% 2022 873,914 3% 203,933 33% 325,368,714 (58%) 2023 981,172 12% 206,073 1% 248,588,960 (24%) CLEARED CUSTOMERS Options % Futures 1 % Stocks % Period (contracts) Change (contracts) Change (shares) Change 2019 302,068 125,225 163,030,500 2020 518,965 72% 163,101 30% 320,376,365 97% 2021 773,284 49% 151,715 (7%) 752,720,070 135% 2022 781,373 1% 202,145 33% 314,462,672 (58%) 2023 834,866 7% 204,691 1% 240,270,617 (24%) ___________________________ (1) Futures contract volume includes options on futures. ‎ 45 Table of Contents PRINCIPAL TRANSACTIONS Options % Futures 1 % Stocks % Period (contracts) Change (contracts) Change (shares) Change 2019 41,452 2,407 8,926,477 2020 39,840 (4%) 2,523 5% 7,249,464 (19%) 2021 35,680 (10%) 2,079 (18%) 5,061,983 (30%) 2022 34,501 (3%) 3,205 54% 4,666,872 (8%) 2023 39,564 15% 2,961 (8%) 4,153,887 (11%) ___________________________ (1) Futures contract volume includes options on futures.
Biggest changeEXECUTED ORDER VOLUMES: (in thousands, except %) Customer % Principal % Total % Period Orders Change Orders Change Orders Change 2020 620,405 27,039 704,278 2021 646,440 4% 27,334 1% 673,774 (4%) 2022 532,064 (18%) 26,966 (1%) 559,030 (17%) 2023 483,015 (9%) 29,712 10% 512,727 (8%) 2024 661,666 37% 63,348 113% 725,014 41% CONTRACT AND SHARE VOLUMES: (in thousands, except %) TOTAL Options % Futures 1 % Stocks % Period (contracts) Change (contracts) Change (shares) Change 2020 624,035 167,078 338,513,068 2021 887,849 42% 154,866 (7%) 771,273,709 128% 2022 908,415 2% 207,138 34% 330,035,586 (57%) 2023 1,020,736 12% 209,034 1% 252,742,847 (23%) 2024 1,344,855 32% 218,327 4% 307,489,711 22% CUSTOMER Options % Futures 1 % Stocks % Period (contracts) Change (contracts) Change (shares) Change 2020 584,195 164,555 331,263,604 2021 852,169 46% 152,787 (7%) 766,211,726 131% 2022 873,914 3% 203,933 33% 325,368,714 (58%) 2023 981,172 12% 206,073 1% 248,588,960 (24%) 2024 1,290,770 32% 214,864 4% 302,040,873 22% PRINCIPAL Options % Futures 1 % Stocks % Period (contracts) Change (contracts) Change (shares) Change 2020 39,840 2,523 7,249,464 2021 35,680 (10%) 2,079 (18%) 5,061,983 (30%) 2022 34,501 (3%) 3,205 54% 4,666,872 (8%) 2023 39,564 15% 2,961 (8%) 4,153,887 (11%) 2024 54,085 37% 3,463 17% 5,448,838 31% ___________________________ (1) Futures contract volume includes options on futures. ‎ 44 Table of Contents CUSTOMER STATISTICS: Year over Year 2024 2023 % Change Total Accounts (in thousands) 3,337 2,562 30% Customer Equity (in billions) 1 $ 568.2 $ 426.0 33% Total Customer DARTs (in thousands) 2 2,641 1,940 36% Cleared Customers Commission per Cleared Commissionable Order 3 $ 2.86 $ 3.14 (9%) Cleared Avg.
Other Income (Loss) Other income consists of foreign exchange gains (losses) from our currency diversification strategy, gains (losses) from principal transactions, gains (losses) from our equity method investments, and other revenue not directly attributable to our core business offerings.
Other Income (Loss) Other income consists of foreign exchange gains (losses) from our currency diversification strategy, gains (losses) from principal transactions, gains (losses) from our equity method and other investments, and other revenue not directly attributable to our core business offerings.
Our cash flows from investing activities are primarily related to other investments, capitalized internal software development, purchases and sales of memberships, trading rights and shares at exchanges where we trade, and strategic investments where such investments may enable us to offer better execution alternatives to our current and prospective customers, allow us to influence exchanges to provide competing products at better prices using sophisticated technology, or enable us to acquire either technology or customers faster than we could develop them on our own.
Investing Activities Our cash flows from investing activities are primarily related to other investments, capitalized internal software development, purchases and sales of memberships, trading rights and shares at exchanges where we trade, and strategic investments where such investments may enable us to offer better execution alternatives to our current and prospective customers, allow us to influence exchanges to provide competing products at better prices using sophisticated technology, or enable us to acquire either technology or customers faster than we could develop them on our own.
A tax position that meets this standard is measured at the largest amount of benefit that will more likely than not be realized on settlement. 59 Table of Contents Accounting Pronouncements Issued but Not Yet Adopted For additional information regarding FASB Accounting Standards Updates (“ASU”s) that have been issued but not yet adopted and that may impact the Company, refer to Note 2 – “Significant Accounting Policies” to the audited consolidated financial statements in Part II, Item 8 of this Annual Report on form 10-K.
A tax position that meets this standard is measured at the largest amount of benefit that will more likely than not be realized on settlement. ‎ 59 Table of Contents Accounting Pronouncements Issued but Not Yet Adopted For additional information regarding FASB Accounting Standards Updates (“ASU”s) that have been issued but not yet adopted and that may impact the Company, refer to Note 2 – “Significant Accounting Policies” to the audited consolidated financial statements in Part II, Item 8 of this Annual Report on form 10-K. ‎ 60 Table of Contents
Interest Income and Interest Expense We earn interest on margin lending to customers that is secured by marketable securities these customers hold with us; from our investments in U.S. and foreign government securities; from borrowing and lending securities; on deposits (in positive interest rate currencies) with banks; and on certain customers’ cash balances in negative rate currencies.
Interest Income and Interest Expense We earn interest on margin lending to customers that is secured by marketable securities and currency balances these customers hold with us; from our investments in U.S. and foreign government securities; from borrowing and lending securities; on deposits (in positive interest rate currencies) with banks; and on certain customers’ cash balances in negative rate currencies.
Retail transaction volumes may not be sustainable and are not predictable. Consolidation among market centers may adversely affect the value of our IB SmartRouting SM software. Price competition among broker-dealers may continue to intensify. Benchmark interest rates tend to fluctuate with economic conditions.
Retail transaction volumes may not be sustainable and are not predictable. Consolidation among market centers may adversely affect the value of our IB SmartRouting SM software. Competition among broker-dealers may continue to intensify. Benchmark interest rates tend to fluctuate with economic conditions.
The majority of our assets consist of investments of customer funds, collateralized receivables arising from customer - related and proprietary securities transactions, and exchange - listed marketable securities, which are marked - to - market daily. Collateralized receivables consist primarily of customer margin loans, securities borrowed, and securities purchased under agreements to resell.
The majority of our assets consists of investments of customer funds, collateralized receivables arising from customer - related and proprietary securities transactions, and exchange - listed marketable securities, which are marked - to - market daily. Collateralized receivables consist primarily of customer margin loans, securities borrowed, and securities purchased under agreements to resell.
Our significant capital comprises an aggregate across our many regulated subsidiaries, and in addition to supporting our current and future expansion plans we believe this financial strength provides our customers with a source of confidence.
Our significant capital comprises an aggregate across our many regulated subsidiaries, and in addition to supporting our current business and future expansion plans we believe this financial strength provides our customers with a source of confidence.
As of December 31, 2023, there were no definitive agreements with respect to any material acquisition. 58 Table of Contents Certain Information Concerning Off - Balance - Sheet Arrangements We may be exposed to a risk of loss not reflected in our consolidated financial statements for futures products, which represent our obligations to settle at contracted prices, and which may require us to repurchase or sell in the market at prevailing prices.
As of December 31, 2024, there were no definitive agreements with respect to any material acquisition. 58 Table of Contents Certain Information Concerning Off - Balance - Sheet Arrangements We may be exposed to a risk of loss not reflected in our consolidated financial statements for futures products, which represent our obligations to settle at contracted prices, and which may require us to repurchase or sell in the market at prevailing prices.
A discussion of our approach for managing foreign currency exposure is contained in Part I, Item 7A of this Quarterly Report on Form 10-Q entitled “Quantitative and Qualitative Disclosures about Market Risk.” Financial Overview We report non-GAAP financial measures, which exclude certain items that may not be indicative of our core operating results and business outlook and are useful in evaluating the operating performance of our business.
A discussion of our approach for managing foreign currency exposure is contained in Part I, Item 7A of this Quarterly Report on Form 10-Q entitled ‘‘Quantitative and Qualitative Disclosures about Market Risk.” Financial Overview We report non-GAAP financial measures, which exclude certain items that may not be indicative of our core operating results and business outlook and are useful in evaluating the operating performance of our business.
The full effect of the GLOBAL is captured in comprehensive income. ‎ 43 Table of Contents Certain Trends and Uncertainties We believe that our current operations may be favorably or unfavorably impacted by the following trends and uncertainties that may affect our financial condition and results of operations: Retail participation in the equity markets has fluctuated in the past due to investor sentiment, market conditions and a variety of other factors.
The full effect of the GLOBAL is captured in comprehensive income. ‎ 42 Table of Contents Certain Trends and Uncertainties We believe that our current operations may be favorably or unfavorably impacted by the following trends and uncertainties that may affect our financial condition and results of operations: Retail participation in the equity markets has fluctuated in the past due to investor sentiment, market conditions and a variety of other factors.
These funds are primarily intended to finance each individual operating subsidiary ’s local operations, and thus would not be available to fund U.S. domestic operations unless repatriated through payment of dividends to IBG LLC. As of December 31, 2023, we had no intention to repatriate any amounts from non - U.S. operating subsidiaries . With the enactment of the U.S.
These funds are primarily intended to finance each individual operating subsidiary ’s local operations, and thus would not be available to fund U.S. domestic operations unless repatriated through payment of dividends to IBG LLC. As of December 31, 2024, we had no intention to repatriate any amounts from non - U.S. operating subsidiaries . With the enactment of the U.S.
See “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10 - K for a discussion of other risks that may affect our financial condition and results of operations. ‎ 44 Table of Contents Trading Volumes and Customer Statistics The tables below present historical trading volumes and customer statistics for our business.
See “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10 - K for a discussion of other risks that may affect our financial condition and results of operations. ‎ 43 Table of Contents Trading Volumes and Customer Statistics The tables below present historical trading volumes and customer statistics for our business.
As a percentage of total net revenues, non-interest expenses were 29% for the current year and 35% for the prior year. Execution, Clearing and Distribution Fees Execution, clearing and distribution fees include the costs of executing and clearing trades, net of liquidity rebates received from various exchanges and market centers, as well as regulatory fees and market data fees.
As a percentage of total net revenues, non-interest expenses were 29% for both the current year and the prior year. Execution, Clearing and Distribution Fees Execution, clearing and distribution fees include the costs of executing and clearing trades, net of liquidity rebates received from various exchanges and market centers, as well as regulatory fees and market data fees.
As a percentage of total net revenues, execution, clearing and distribution fees were 9% for the current year and 11% for the prior year. Employee Compensation and Benefits Employee compensation and benefits include salaries, bonuses and other incentive compensation plans, group insurance, contributions to benefit programs and other related employee costs.
As a percentage of total net revenues, execution, clearing and distribution fees were 9% for both the current year and the prior year. Employee Compensation and Benefits Employee compensation and benefits include salaries, bonuses and other incentive compensation plans, group insurance, contributions to benefit programs and other related employee costs.
Employee compensation and benefits expenses as a percentage of adjusted net revenues were 12% for the current year and 14% for the prior year. Occupancy, Depreciation and Amortization Occupancy expenses consist primarily of rental payments on office and data center leases and related occupancy costs, such as utilities.
Employee compensation and benefits expenses as a percentage of adjusted net revenues were 11% for the current year and 12% for the prior year. Occupancy, Depreciation and Amortization Occupancy expenses consist primarily of rental payments on office and data center leases and related occupancy costs, such as utilities.
This increase is attributable to total comprehensive income, partially offset by distributions and dividends paid during 2023. Cash Flows The table below presents our cash flows from operating activities, investing activities and financing activities for the periods indicated.
This increase is attributable to total comprehensive income, partially offset by distributions and dividends paid during 2024. Cash Flows The table below presents our cash flows from operating activities, investing activities and financing activities for the periods indicated.
If we pursue any additional strategic acquisitions, we may incur additional capital expenditures. ‎ 57 Table of Contents Contractual Obligations Summary Our contractual obligations principally include obligations associated with our outstanding indebtedness and interest payments as of December 31, 2023.
If we pursue any additional strategic acquisitions, we may incur additional capital expenditures. ‎ 57 Table of Contents Contractual Obligations Summary Our contractual obligations principally include obligations associated with our outstanding indebtedness and interest payments as of December 31, 2024.
We actively manage this exposure by keeping our equity in proportion to a defined basket of 10 currencies we call the “GLOBAL” to diversify our risk and to align our hedging strategy with the currencies that we use in our business.
We actively manage this exposure by keeping our equity in proportion to a defined basket of 10 currencies we call the ‘‘GLOBAL’’ to diversify our risk and to align our hedging strategy with the currencies that we use in our business.
See the “Non-GAAP Financial Measures” section below in this Item 7 for additional details. Noncontrolling Interest We are the sole managing member of IBG LLC and, as such, operate and control all of the business and affairs of IBG LLC and its subsidiaries and consolidate IBG LLC’s financial results into our financial statements.
See the “Non-GAAP Financial Measures” section below in this Item 7 for additional details. 52 Table of Contents Noncontrolling Interest We are the sole managing member of IBG LLC and, as such, operate and control all of the business and affairs of IBG LLC and its subsidiaries and consolidate IBG LLC’s financial results into our financial statements.
Through December 31, 2023, approximately $268 million of cumulative cash payments have been made. (2) The Tax Act implemented a modified territorial tax system that includes a one-time transition tax on deemed repatriated earnings of foreign subsidiaries to be paid over an eight-year period starting in 2018. We believe this tax will not have a material impact on our liquidity.
Through December 31, 2024, approximately $293 million of cumulative cash payments have been made. (2) The Tax Act implemented a modified territorial tax system that includes a one-time transition tax on deemed repatriated earnings of foreign subsidiaries to be paid over an eight-year period starting in 2018. We believe this tax will not have a material impact on our liquidity.
Our share of IBG LLC’s net income, excluding Holdings’ noncontrolling interest, for the current year was approximately 25.0%, compared to approximately 24.0% for the prior year.
Our share of IBG LLC’s net income, excluding Holdings’ noncontrolling interest, for the current year was approximately 25.6%, compared to approximately 25.0% for the prior year.
Year Ended December 31, 2022 compared to the Year Ended December 31, 2021 For a discussion of changes for the year ended December 31, 2022 compared to the Year Ended December 31, 2021 refer to the Annual Report on Form 10-K filed with the SEC on February 24, 2023. ‎ 53 Table of Contents Non-GAAP Financial Measures We use certain non-GAAP financial measures as additional measures to enhance the understanding of our financial results.
Year Ended December 31, 2023 compared to the Year Ended December 31, 2022 For a discussion of changes for the year ended December 31, 2023 compared to the Year Ended December 31, 2022 refer to the Annual Report on Form 10-K filed with the SEC on February 27, 2024. ‎ 53 Table of Contents Non-GAAP Financial Measures We use certain non-GAAP financial measures as additional measures to enhance the understanding of our financial results.
IBKR Lite SM trades generate payments from market makers and others to whom we route these orders, which are reported in commissions . Our commissions are geographically diversified. In 2023, 2022, and 2021 we generated 37%, 37% and 39%, respectively, of commissions from operations conducted by our subsidiaries outside the U.S.
IBKR Lite SM trades generate payments from market makers and others to whom we route these orders, which are reported in commissions . Our commissions are geographically diversified. In 2024, 2023, and 2022 we generated 38%, 37% and 37%, respectively, of commissions from operations conducted by our subsidiaries outside the U.S.
We custody and service accounts for hedge and mutual funds, ETFs, registered investment advisers, proprietary trading groups, introducing brokers and individual investors.
We custody and service accounts for hedge and mutual funds, ETFs, registered investment advisors, proprietary trading groups, introducing brokers and individual investors.
Generally, as benchmark interest rates rise, while the overall revenue generated from a securities lending transaction may not change, the portion 49 Table of Contents derived from interest earned on the cash collateral, which is classified as net interest income on “Segregated cash and securities, net” increases, while the portion classified as “Securities borrowed and loaned, net” decreases.
Generally, as benchmark interest rates rise, while the overall revenue generated from a securities lending transaction may not change, the portion derived from interest earned on the cash collateral, which is classified as net interest income on “Segregated cash and securities, net” increases, while the portion classified as “Securities borrowed and loaned, net” decreases.
The increase in net interest income was driven by higher benchmark interest rates and customer credit balances.
The increase in net interest income was driven by higher customer margin loans and customer credit balances, and higher benchmark interest rates.
As a percentage of total net revenues, occupancy, depreciation and amortization expenses were 2% for the current year and 3% for the prior year. ‎ 51 Table of Contents Communications Communications expenses consist primarily of the cost of voice and data telecommunications lines supporting our business, including connectivity to exchanges and market centers around the world.
As a percentage of total net revenues, occupancy, depreciation and amortization expenses were 2% for both the current year and the prior year. Communications Communications expenses consist primarily of the cost of voice and data telecommunications lines supporting our business, including connectivity to exchanges and market centers around the world.
Capital expenditures for property, equipment, and intangible assets were approximately $49 million , $69 million and $77 million for the three years ended December 31, 2023, 2022, and 2021, respectively.
Capital expenditures for property, equipment, and intangible assets were approximately $49 million , $49 million and $69 million for the three years ended December 31, 2024, 2023, and 2022, respectively.
As a percentage of total net revenues, general and administrative expenses were 5% for both the current year and the prior year. Customer Bad Debt Customer bad debt expense consists primarily of losses incurred by customers in excess of their assets with us, net of amounts recovered by us.
As a percentage of total net revenues, general and administrative expenses were 6% for the current year and 5% for the prior year. 51 Table of Contents Customer Bad Debt Customer bad debt expense consists primarily of losses incurred by customers in excess of their assets with us, net of amounts recovered by us.
A discussion of our approach to managing foreign currency exposure is contained in Part II, Item 7A of this Annual Report on Form 10-K entitled “Quantitative and Qualitative Disclosures about Market Risk.” Other income, for the current year, increased $96 million, compared to the prior year, to a loss of $11 million.
A discussion of our approach to managing foreign currency exposure is contained in Part II, Item 7A of this Annual Report on Form 10-K entitled “Quantitative and Qualitative Disclosures about Market Risk.” Other income, for the current year, increased $71 million, compared to the prior year, to a gain of $60 million.
Year Ended December 31 , 2022 : For a discussion of changes in cash flows for the year ended December 31, 2022 refer to our Annual Report on Form 10-K filed with the SEC on February 24, 2023.
Year Ended December 31, 2023: For a discussion of changes in cash flows for the year ended December 31, 2023 refer to our Annual Report on Form 10-K filed with the SEC on February 27, 2024.
DARTs per Account (Annualized) 172 206 (17%) ___________________________ (1) Excludes non - customers. (2) Daily average revenue trades ("DARTs") are based on customer orders. (3) Commissionable order – a customer order that generates commissions. 46 Table of Contents Results of Operations The table below presents our consolidated results of operations for the periods indicated.
DARTs per Account (Annualized) 213 172 24% ___________________________ (1) Excludes non - customers. (2) Daily average revenue trades ("DARTs") are based on customer orders. (3) Commissionable order – a customer order that generates commissions. 45 Table of Contents Results of Operations The table below presents our consolidated results of operations for the periods indicated.
Sudden increases (decreases) in interest rates will cause mark-to-market losses (gains) on these securities, which are recovered (eliminated) if we hold them to maturity, as currently intended. As of December 31, 2023, all of our U.S. government securities mature within three months.
Sudden increases (decreases) in interest rates will cause mark-to-market losses (gains) on these securities, which are recovered (eliminated) if we hold them to maturity, as currently intended. As of December 31, 2024, substantially all of our U.S. government securities had maturities within three months.
Currently, approximately 81% of our customers reside outside the U.S. in over 200 countries and territories, and over 80% of new customers come from outside the U.S . Approximately 57% of our customers’ equity is in institutional accounts such as hedge funds, financial advisors, proprietary trading firms and introducing brokers.
Currently, approximately 83% of our customers reside outside the U.S. in over 200 countries and territories, and over 85% of new customers come from outside the U.S . Approximately 55% of our customers’ equity is in institutional accounts such as hedge funds, financial advisors, proprietary trading firms and introducing brokers.
Occupancy, depreciation and amortization expenses, for the current year, increased $9 million, or 10%, compared to the prior year, to $99 million, mainly due to higher costs related to the expansion of our physical space for both offices and data centers.
Occupancy, depreciation and amortization expenses, for the current year, increased $2 million, or 2%, compared to the prior year, to $101 million, mainly due to higher costs related to the expansion of our physical space for both offices and data centers.
We also report compensation and benefits expenses as a percent of adjusted net revenues, as we believe this measure is useful to investors and analysts in evaluating the growth of our work force in relation to the growth of our core revenues.
We also report compensation and benefits expenses as a percentage of adjusted net revenues, as we believe this measure is useful to investors and analysts in evaluating the growth of our workforce in relation to the growth of our core revenues.
Further, our margin balances are tied to benchmark rates, so higher rates in 2023 have also improved the interest we earn on margin lending to our customers. We continue to offer among the lowest rates in the industry on margin lending, and we believe our low rates are an important feature that attracts customers to our platform.
Further, our margin balances are tied to benchmark rates, so lower rates also limit the interest we earn on margin lending to our customers. We continue to offer among the lowest rates in the industry on margin lending, and we believe our low rates are an important feature that attracts customers to our platform.
Pretax profit margin was 71% for the current year and 65% for the prior year.
Pretax profit margin was 71% for both the current year and the prior year.
As of December 31, 2023, we held approximately 25.4% ownership interest in IBG LLC. Holdings holds approximately 74.6% ownership interest in IBG LLC. We reflect Holdings’ ownership as a noncontrolling interest in our consolidated statements of financial condition, consolidated statements of comprehensive income, consolidated statements of changes in equity and consolidated statements of cash flows.
As of December 31, 2024, we held approximately 25.8% ownership interest in IBG LLC. Holdings holds approximately 74.2% ownership interest in IBG LLC. We reflect Holdings’ ownership as a noncontrolling interest in our consolidated statements of financial condition, consolidated statements of comprehensive income, consolidated statements of changes in equity and consolidated statements of cash flows.
Adjusted pretax profit margin was 71%, up from 67% in the prior year. In connection with our currency diversification strategy as of December 31, 2023, approximately 25% of our equity was denominated in currencies other than the U.S. dollar.
Adjusted pretax profit margin was 72%, up from 71% in the prior year. In connection with our currency diversification strategy as of December 31, 2024, approximately 23% of our equity was denominated in currencies other than the U.S. dollar.
Historically, our consolidated equity has consisted primarily of accumulated retained earnings, which to date have been sufficient to fund our operations and growth. Our consolidated equity increased 21% to $14.1 billion as of December 31, 2023, from $11.6 billion as of December 31, 2022.
Historically, our consolidated equity has consisted primarily of accumulated retained earnings, which to date have been sufficient to fund our operations and growth. Our consolidated equity increased 17% to $16.6 billion as of December 31, 2024, from $14.1 billion as of December 31, 2023.
In the current year, average securities borrowed balances increased 34%, to $5.3 billion, and average securities loaned balances decreased 6%, to $9.5 billion, compared to the prior year. Net interest earned from securities lending is affected by the level of demand for securities positions held by our customers that investors are looking to sell short.
In the current year, average securities borrowed balances increased 11%, to $5.9 billion, and average securities loaned balances increased 44%, to $13.7 billion, compared to the prior year. Net interest earned from securities lending is affected by the level of demand for securities positions held by our customers that investors are looking to sell short.
Year Ended December 31, 2023 2022 2021 Revenues Commissions 31% 43% 50% Other fees and services 5% 6% 8% Other income (loss) (0%) (3%) 0% Total non-interest income 36% 46% 58% Interest income 144% 88% 51% Interest expense (79%) (33%) (8%) Total net interest income 64% 54% 42% Total net revenues 100% 100% 100% Non-interest expenses Execution, clearing and distribution fees 9% 11% 9% Employee compensation and benefits 12% 15% 15% Occupancy, depreciation and amortization 2% 3% 3% Communications 1% 1% 1% General and administrative 5% 5% 6% Customer bad debt 0% 0% 0% Total non-interest expenses 29% 35% 34% Income before income taxes 71% 65% 66% Income tax expense 6% 5% 6% Net income 65% 60% 60% Less net income attributable to noncontrolling interests 51% 48% 49% Net income available for common stockholders 14% 12% 11% Year Ended December 31 , 2023 (“current year”) compared to the Year Ended December 31, 2022 (“prior year”) Net Revenues Total net revenues, for the current year, increased $1,273 million, or 42%, compared to the prior year, to $4,340 million.
Year Ended December 31, 2024 2023 2022 Revenues Commissions 33% 31% 43% Other fees and services 5% 5% 6% Other income (loss) 1% (0%) (3%) Total non-interest income 39% 36% 46% Interest income 142% 144% 88% Interest expense (81%) (79%) (33%) Total net interest income 61% 64% 54% Total net revenues 100% 100% 100% Non-interest expenses Execution, clearing and distribution fees 9% 9% 11% Employee compensation and benefits 11% 12% 15% Occupancy, depreciation and amortization 2% 2% 3% Communications 1% 1% 1% General and administrative 6% 5% 5% Customer bad debt 0% 0% 0% Total non-interest expenses 29% 29% 35% Income before income taxes 71% 71% 65% Income tax expense 6% 6% 5% Net income 66% 65% 60% Less net income attributable to noncontrolling interests 51% 51% 48% Net income available for common stockholders 15% 14% 12% Year Ended December 31 , 2024 (“current year”) compared to the Year Ended December 31, 2023 (“prior year”) Net Revenues Total net revenues, for the current year, increased $845 million, or 19%, compared to the prior year, to $5,185 million.
Inflation Although we cannot accurately anticipate the effects of inflation on our operations, we believe that, for the current year, inflation may have indirectly had a material impact on our results of operations.
Inflation Although we cannot accurately anticipate the effects of inflation on our operations, we believe that for the past several years inflation may have indirectly had a material impact on our results of operations.
See the “Non-GAAP Financial Measures” section below in this Item 7 for additional details. Diluted earnings per share were $5.67 for the year ended December 31, 2023 (“current year”), compared to $3.75 for the year ended December 31, 2022 (“prior year”). Adjusted diluted earnings per share were $5.75 for the current year, compared to $4.05 for the prior year.
See the “Non-GAAP Financial Measures” section below in this Item 7 for additional details. Diluted earnings per share were $6.93 for the year ended December 31, 2024 (“current year”), compared to $5.67 for the year ended December 31, 2023 (“prior year”). Adjusted diluted earnings per share were $7.03 for the current year, compared to $5.75 for the prior year.
As of December 31, 2023, total assets were $128.4 billion of which approximately $127.2 billion, or 99.0%, were considered liquid. Decisions on the allocation of capital are based upon, among other things, prudent risk management guidelines, potential liquidity and cash flow needs for current and future business activities, regulatory capital requirements, and projected profitability.
As of December 31, 2024, total assets were $150.1 billion of which approximately $148.9 billion, or 99.2%, were considered liquid. Decisions on the allocation of capital are based upon, among other things, prudent risk management guidelines, potential liquidity and cash flow needs for current and future business activities, regulatory capital requirements, and projected profitability.
We specialize in routing orders and executing and processing trades in stocks, options, futures, forex, bonds, mutual funds, ETFs and precious metals on more than 150 electronic exchanges and market centers in 34 countries and 27 currencies seamlessly around the world.
We specialize in routing orders and executing and processing trades in stocks, options, futures, forex, bonds, mutual funds, ETFs and precious metals on more than 160 electronic exchanges and market centers in 36 countries and 28 currencies around the world.
Year-Ended December 31, 2023 2022 2021 Adjusted net revenues (in millions) Net revenues - GAAP $ 4,340 $ 3,067 $ 2,714 Non-GAAP adjustments Currency diversification strategy, net 80 100 37 Mark-to-market on investments (46) 52 30 Remeasurement of TRA liability (7) (6) (1) Total non-GAAP adjustments 27 146 66 Adjusted net revenues $ 4,367 $ 3,213 $ 2,780 Adjusted income before income taxes (in millions) Income before income taxes - GAAP $ 3,069 $ 1,998 $ 1,787 Non-GAAP adjustments Currency diversification strategy, net 80 100 37 Mark-to-market on investments (46) 52 30 Remeasurement of TRA liability (7) (6) (1) Bad debt expense 5 - - Total non-GAAP adjustments 32 146 66 Adjusted income before income taxes $ 3,101 $ 2,144 $ 1,853 Adjusted pre-tax profit margin 71% 67% 67% Adjusted net income available for common stockholders (in millions) Net income available for common stockholders - GAAP $ 600 $ 380 $ 308 Non-GAAP adjustments Currency diversification strategy, net 20 24 8 Mark-to-market on investments (12) 13 7 Remeasurement of TRA liability (7) (6) (1) Bad debt expense 1 - - Income tax effect of above adjustments 1 (2) (7) (3) Remeasurement of deferred income taxes 7 7 1 Total non-GAAP adjustments 8 30 12 Adjusted net income available for common stockholders $ 608 $ 410 $ 320 Adjusted diluted EPS (in dollars, except share amounts) Diluted EPS - GAAP $ 5.67 $ 3.75 $ 3.24 Non-GAAP adjustments Currency diversification strategy, net 0.19 0.24 0.09 Mark-to-market on investments (0.11) 0.12 0.07 Remeasurement of TRA liability (0.07) (0.06) (0.01) Bad debt expense 0.01 0.00 0.00 Income tax effect of above adjustments 1 (0.01) (0.07) (0.03) Remeasurement of deferred income taxes 0.07 0.07 0.01 Total non-GAAP adjustments 0.08 0.30 0.13 Adjusted diluted EPS $ 5.75 $ 4.05 $ 3.37 Diluted weighted average common shares outstanding 105,846,877 101,299,609 95,009,880 Note: Amounts may not add due to rounding. _________________________ 1 The income tax effect is estimated using the statutory income tax rates applicable to the Company. ‎ 55 Table of Contents Liquidity and Capital Resources We maintain a highly liquid balance sheet.
Year-Ended December 31, 2024 2023 2022 Adjusted net revenues (in millions) Net revenues - GAAP $ 5,185 $ 4,340 $ 3,067 Non-GAAP adjustments Currency diversification strategy, net 15 80 100 Mark-to-market on investments 48 (46) 52 Remeasurement of TRA liability 9 (7) (6) Total non-GAAP adjustments 72 27 146 Adjusted net revenues $ 5,257 $ 4,367 $ 3,213 Adjusted income before income taxes (in millions) Income before income taxes - GAAP $ 3,695 $ 3,069 $ 1,998 Non-GAAP adjustments Currency diversification strategy, net 15 80 100 Mark-to-market on investments 48 (46) 52 Remeasurement of TRA liability 9 (7) (6) Bad debt expense - 5 - Total non-GAAP adjustments 72 32 146 Adjusted income before income taxes $ 3,767 $ 3,101 $ 2,144 Adjusted pre-tax profit margin 72% 71% 67% Adjusted net income available for common stockholders (in millions) Net income available for common stockholders - GAAP $ 755 $ 600 $ 380 Non-GAAP adjustments Currency diversification strategy, net 4 20 24 Mark-to-market on investments 12 (12) 13 Remeasurement of TRA liability 9 (7) (6) Bad debt expense - 1 - Income tax effect of above adjustments 1 (4) (2) (7) Remeasurement of deferred income taxes (11) 7 7 Total non-GAAP adjustments 11 8 30 Adjusted net income available for common stockholders $ 766 $ 608 $ 410 Adjusted diluted EPS (in dollars, except share amounts) Diluted EPS - GAAP $ 6.93 $ 5.67 $ 3.75 Non-GAAP adjustments Currency diversification strategy, net 0.04 0.19 0.24 Mark-to-market on investments 0.11 (0.11) 0.12 Remeasurement of TRA liability 0.08 (0.07) (0.06) Bad debt expense 0.00 0.01 0.00 Income tax effect of above adjustments 1 (0.03) (0.01) (0.07) Remeasurement of deferred income taxes (0.10) 0.07 0.07 Total non-GAAP adjustments 0.10 0.08 0.30 Adjusted diluted EPS $ 7.03 $ 5.75 $ 4.05 Diluted weighted average common shares outstanding 109,002,938 105,846,877 101,299,609 Note: Amounts may not add due to rounding. _________________________ 1 The income tax effect is estimated using the statutory income tax rates applicable to the Company. ‎ 55 Table of Contents Liquidity and Capital Resources We maintain a highly liquid balance sheet.
We pay interest on customer cash balances (in sufficiently positive interest rate currencies); for borrowing and lending securities; on deposits (in negative interest rate currencies) with banks; and on our borrowings. Net interest income (interest income less interest expense), for the current year, increased $1,126 million, or 68%, compared to the prior year, to $2,794 million.
We pay interest on customer cash balances (in sufficiently positive interest rate currencies); for borrowing and lending securities; on deposits (in negative interest rate currencies) with banks; and on our borrowings. Net interest income (interest income less interest expense), for the current year, increased $354 million, or 13%, compared to the prior year, to $3,148 million.
The proliferation of electronic exchanges and market centers has allowed us to integrate our software with an increasing number of trading venues, creating one automatically functioning, computerized platform that requires minimal human intervention. Our customer base is diverse with respect to geography and type.
The proliferation of electronic exchanges and market centers has allowed us to integrate our software with an increasing number of trading venues – as well as with market data sources, securities lending platforms and regulatory reporting facilities – creating one automatically functioning, computerized platform that requires minimal human intervention. Our customer base is diverse with respect to geography and type.
Year-Ended December 31, 2023 2022 2021 (in millions, except %) Consolidated Consolidated income before income taxes $ 3,069 $ 1,998 $ 1,787 IBG, Inc. stand-alone income before income taxes and eliminations 4 2 - Operating subsidiaries income before income taxes $ 3,065 $ 1,996 $ 1,787 Operating subsidiaries Income before income taxes $ 3,065 $ 1,996 $ 1,787 Income tax expense 115 69 76 Net income available to members $ 2,950 $ 1,927 $ 1,711 IBG, Inc.
Year-Ended December 31, 2024 2023 2022 (in millions, except %) Consolidated Consolidated income before income taxes $ 3,695 $ 3,069 $ 1,998 IBG, Inc. stand-alone income before income taxes and eliminations (18) 4 2 Operating subsidiaries income before income taxes $ 3,713 $ 3,065 $ 1,996 Operating subsidiaries Income before income taxes $ 3,713 $ 3,065 $ 1,996 Income tax expense 142 115 69 Net income available to members $ 3,571 $ 2,950 $ 1,927 IBG, Inc.
Our customer options and futures volumes were up 12% and 1%, respectively, while stock and foreign exchange volumes declined 24% and 29%, respectively, compared to the prior year. 41 Table of Contents Note that while U.S. options, futures and cash equities volumes are readily comparable measures, they reflect most but not all of the global volumes that generate our commission revenue.
Our customer options, equities, and futures volumes were up 32%, 22%, and 4%, respectively, while foreign exchange volumes declined 9%, compared to the prior year. 40 Table of Contents Note that while U.S. options, futures and cash equities volumes are readily comparable measures, they reflect most but not all of the global volumes that generate our commission revenue.
The effects of our currency diversification strategy are reported as (1) a component of other income (loss of $80 million) in the consolidated statements of comprehensive income and (2) other comprehensive income (“OCI”) (gain of $122 million) in the consolidated statements of financial condition and the consolidated statements of comprehensive income.
The effects of our currency diversification strategy are reported as (1) a component of “Other Income” (loss of $15 million) in the consolidated statements of comprehensive income and (2) other comprehensive income (“OCI”) (loss of $207 million) in the consolidated statements of financial condition and the consolidated statements of comprehensive income.
For example, tensions between the U.S. and China have escalated in recent years, and changes in Chinese governmental oversight of Hong Kong and in the Chinese and Hong Kong capital markets could result in adverse effects on our business and loss of assets we hold in the region.
Such risks and uncertainties include political, economic and financial instability, and foreign policy changes. For example, tensions between the U.S. and China have escalated in recent years, and changes in Chinese governmental oversight of the Chinese and Hong Kong capital markets could result in adverse effects on our business and loss of assets we hold in the region.
Net interest income on customer balances, for the current year, increased $882 million, compared to the prior year, driven by an increase in the average federal funds effective rate to 5.02% from 1.68% in the prior year and a $5.9 billion increase in average customer credit balances.
Net interest income on customer balances, for the current year, increased $497 million, compared to the prior year, driven by a $12.3 billion increase in average customer margin loans, a $9.8 billion increase in average customer credit balances, and an increase in the average federal funds effective rate to 5.14% from 5.02% in the prior year and.
Higher short-term rates, and uncertainty over future U.S. Federal Reserve rate policy, have led us to maintain a short duration portfolio, all of which matured within three months at December 31, 2023, to more closely match our asset and liability maturities on our interest-sensitive assets.
Federal Reserve rate policy, have led us to maintain a short duration portfolio, substantially all of which matured within three months at December 31, 2024, to more closely match our asset and liability maturities on our interest-sensitive assets.
Mark-to-market on investments represents the net mark-to-market gains (losses) on investments in equity securities that do not qualify for equity method accounting which are measured at fair value, on our U.S. government and municipal securities portfolios, which are typically held to maturity, and on certain other investments, including equity securities taken over by the Company from customers related to unusual losses on margin loans.
Mark-to-market on investments represents the net mark-to-market gains (losses) on investments in equity securities that do not qualify for equity method accounting, which are measured at fair value; on our U.S. government and municipal securities portfolios, which are typically held to maturity; and on certain other investments, including equity securities taken over by the Company as a customer accommodation following unusual market events or technical issues.
Employee compensation and benefits expenses, for the current year, increased $73 million, or 16%, compared to the prior year, to $527 million, associated with a combination of staffing increases and inflation. The average number of employees increased 6% to 2,892 for the current year, compared to 2,721 for the prior year.
Employee compensation and benefits expenses, for the current year, increased $47 million, or 9%, compared to the prior year, to $574 million, associated with a combination of staffing increases and inflation. The average number of employees increased 2% to 2,960 for the current year, compared to 2,892 for the prior year.
We continued to add staff worldwide, primarily in software development and information technology services. As we continue to grow, our focus on automation has allowed us to maintain a relatively small staff. As a percentage of total net revenues, employee compensation and benefits expenses were 12% for the current year and 15% for the prior year.
We continued to add staff worldwide to support our business expansion. As we continue to grow, our focus on automation has allowed us to maintain a relatively small staff. As a percentage of total net revenues, employee compensation and benefits expenses were 11% for the current year and 12% for the prior year.
Capitalizing on our proprietary technology, our systems provide our customers with the capability to monitor multiple markets around the world simultaneously and to execute trades electronically in these markets at a low cost, in multiple products and currencies from a single trading account.
As an electronic broker, we execute, clear and settle trades globally for both institutional and individual customers. Capitalizing on our proprietary technology, our systems provide our customers with the capability to monitor multiple markets around the world simultaneously and to execute trades electronically in these markets at a low cost, in multiple products and currencies from a single trading account.
During the current year, the value of the GLOBAL, as measured in U.S. dollars, increased 0.41% compared to its value at December 31, 2022, which had a positive impact on our comprehensive earnings for the current year.
During the current year, the value of the GLOBAL, as measured in U.S. dollars, decreased 1.45% compared to its value at December 31, 2023, which had a negative impact on our comprehensive earnings for the current year.
Average ownership percentage in IBG LLC 25.0% 24.0% 22.6% Net income available to IBG, Inc. from operating subsidiaries $ 737 $ 463 $ 383 IBG, Inc. stand-alone income before income taxes 5 4 - Income before income taxes 742 467 383 Income tax expense 142 87 75 Net income available to common stockholders $ 600 $ 380 $ 308 Consolidated income tax expense Income tax expense attributable to operating subsidiaries $ 115 $ 69 $ 76 Income tax expense attributable to IBG, Inc. 142 87 75 Consolidated income tax expense $ 257 $ 156 $ 151 Operating Results Income before income taxes, for the current year, increased $1,071 million, or 54%, compared to the prior year, to $3,069 million.
Average ownership percentage in IBG LLC 25.6% 25.0% 24.0% Net income available to IBG, Inc. from operating subsidiaries $ 915 $ 737 $ 463 IBG, Inc. stand-alone income before income taxes (14) 5 4 Income before income taxes 901 742 467 Income tax expense 146 142 87 Net income available to common stockholders $ 755 $ 600 $ 380 Consolidated income tax expense Income tax expense attributable to operating subsidiaries $ 142 $ 115 $ 69 Income tax expense attributable to IBG, Inc. 146 142 87 Consolidated income tax expense $ 288 $ 257 $ 156 Operating Results Income before income taxes, for the current year, increased $626 million, or 20%, compared to the prior year, to $3,695 million.
The impact of a public health emergency going forward will depend on numerous evolving factors that cannot be accurately predicted, including the duration and spread of the pandemic, governmental regulations in response to the pandemic, and the effectiveness of vaccinations and other medical advancements. We continue to be exposed to the risks and uncertainties of doing business in international markets, particularly in the heavily regulated brokerage industry.
Scrutiny in the use of artificial intelligence (AI) and information security by regulatory and legislative authorities has increased. The impact of another pandemic or a public health emergency will depend on numerous evolving factors that cannot be accurately predicted, including the duration and spread of the pandemic, governmental regulations in response to the pandemic, and the effectiveness of vaccinations and other medical advancements. We continue to be exposed to the risks and uncertainties of doing business in international markets, particularly in the heavily regulated brokerage industry.
See “Trading Volumes and Customer Statistics” below in this Item 7 for additional details regarding our trade volumes, contract and share volumes, and customer statistics. Volatility. U.S. market volatility, as measured by the average Chicago Board Options Exchange Volatility Index (“VIX®”), declined 35%, from an average of 26.0 in 2022 to 16.8 in the current year.
See ‘‘Trading Volumes and Customer Statistics’’ below in this Item 7 for additional details regarding our trade volumes, contract and share volumes, and customer statistics. Volatility . U.S. market volatility, as measured by the average Chicago Board Options Exchange Volatility Index (‘‘VIX®’’), declined by 8%, from an average of 16.8 in 2023 to 15.6 in the current year.
Comparing our operating results for the current year to the prior year using non-GAAP financial measures, adjusted net revenues were $4,367 million, up 36%; adjusted income before income taxes was $3,101 million, up 45%; and adjusted pre-tax profit margin was 71% for the current year and 67% for the prior year.
Comparing our operating results for the current year to the prior year using non-GAAP financial measures, adjusted net revenues were $5,257 million, up 20%; adjusted income before income taxes was $3,767 million, up 21%; and adjusted pre-tax profit margin was 72% for the current year and 71% for the prior year.
Year-Ended December 31, 2023 2022 2021 (in millions, except share and per share amounts) Revenues Commissions $ 1,360 $ 1,322 $ 1,350 Other fees and services 197 184 218 Other income (loss) (11) (107) (2) Total non-interest income 1,546 1,399 1,566 Interest income 6,230 2,686 1,372 Interest expense (3,436) (1,018) (224) Total net interest income 2,794 1,668 1,148 Total net revenues 4,340 3,067 2,714 Non-interest expenses Execution, clearing and distribution fees 386 324 236 Employee compensation and benefits 527 454 399 Occupancy, depreciation and amortization 99 90 80 Communications 41 33 33 General and administrative 211 165 176 Customer bad debt 7 3 3 Total non-interest expenses 1,271 1,069 927 Income before income taxes 3,069 1,998 1,787 Income tax expense 257 156 151 Net income 2,812 1,842 1,636 Less net income attributable to noncontrolling interests 2,212 1,462 1,328 Net income available for common stockholders $ 600 $ 380 $ 308 Earnings per share Basic $ 5.72 $ 3.78 $ 3.27 Diluted $ 5.67 $ 3.75 $ 3.24 Weighted average common shares outstanding Basic 104,965,050 100,460,016 94,167,572 Diluted 105,846,877 101,299,609 95,009,880 Comprehensive income Net income available for common stockholders $ 600 $ 380 $ 308 Other comprehensive income Cumulative translation adjustment, before income taxes 30 (26) (22) Income taxes related to items of other comprehensive income - - - Other comprehensive income (loss), net of tax 30 (26) (22) Comprehensive income available for common stockholders $ 630 $ 354 $ 286 Comprehensive income attributable to noncontrolling interests Net income attributable to noncontrolling interests $ 2,212 $ 1,462 $ 1,328 Other comprehensive income - cumulative translation adjustment 92 (85) (75) Comprehensive income attributable to noncontrolling interests $ 2,304 $ 1,377 $ 1,253 47 Table of Contents The table below presents our consolidated results of operations as a percent of our total net revenues for the periods indicated.
Year-Ended December 31, 2024 2023 2022 (in millions, except share and per share amounts) Revenues Commissions $ 1,697 $ 1,360 $ 1,322 Other fees and services 280 197 184 Other income (loss) 60 (11) (107) Total non-interest income 2,037 1,546 1,399 Interest income 7,339 6,230 2,686 Interest expense (4,191) (3,436) (1,018) Total net interest income 3,148 2,794 1,668 Total net revenues 5,185 4,340 3,067 Non-interest expenses Execution, clearing and distribution fees 447 386 324 Employee compensation and benefits 574 527 454 Occupancy, depreciation and amortization 101 99 90 Communications 39 41 33 General and administrative 314 211 165 Customer bad debt 15 7 3 Total non-interest expenses 1,490 1,271 1,069 Income before income taxes 3,695 3,069 1,998 Income tax expense 288 257 156 Net income 3,407 2,812 1,842 Less net income attributable to noncontrolling interests 2,652 2,212 1,462 Net income available for common stockholders $ 755 $ 600 $ 380 Earnings per share Basic $ 6.99 $ 5.72 $ 3.78 Diluted $ 6.93 $ 5.67 $ 3.75 Weighted average common shares outstanding Basic 108,112,199 104,965,050 100,460,016 Diluted 109,002,938 105,846,877 101,299,609 Comprehensive income Net income available for common stockholders $ 755 $ 600 $ 380 Other comprehensive income Cumulative translation adjustment, before income taxes (53) 30 (26) Income taxes related to items of other comprehensive income - - - Other comprehensive income (loss), net of tax (53) 30 (26) Comprehensive income available for common stockholders $ 702 $ 630 $ 354 Comprehensive income attributable to noncontrolling interests Net income attributable to noncontrolling interests $ 2,652 $ 2,212 $ 1,462 Other comprehensive income - cumulative translation adjustment (154) 92 (85) Comprehensive income attributable to noncontrolling interests $ 2,498 $ 2,304 $ 1,377 46 Table of Contents The table below presents our consolidated results of operations as a percent of our total net revenues for the periods indicated.
Payments Due by Year Total 2024-2025 2026-2027 Thereafter (in millions) Payable to Holdings under Tax Receivable Agreement (1) $ 206 $ 39 $ 26 $ 141 Operating leases 160 62 41 57 Transition Tax liability (2) 33 33 - - Total contractual cash obligations $ 399 $ 134 $ 67 $ 198 ___________________________ (1) As of December 31, 2023, contractual amounts owed under the Tax Receivable Agreement of $206 million have been recorded in payable to affiliate in the consolidated financial statements, representing management’s best estimate of the amounts currently expected to be owed under the Tax Receivable Agreement.
Payments Due by Year Total 2025-2026 2027-2028 Thereafter (in millions) Payable to Holdings under Tax Receivable Agreement (1) $ 195 $ 28 $ 28 $ 139 Operating leases 134 57 38 39 Transition Tax liability (2) 18 18 - - Total contractual cash obligations $ 347 $ 103 $ 66 $ 178 ___________________________ (1) As of December 31, 2024, contractual amounts owed under the Tax Receivable Agreement of $195 million have been recorded in payable to affiliate in the consolidated financial statements, representing management’s best estimate of the amounts currently expected to be owed under the Tax Receivable Agreement.
The following is a summary of the key economic drivers that affect our business and how they compared to the prior-year quarter: Global trading volumes. Worldwide, equities volumes at most major exchanges declined in the current year, while major market indexes reached all-time highs.
The following is a summary of the key economic drivers that affect our business and how they compared to the prior year: Global trading volumes . Worldwide, equities volumes at most major trading venues increased in the current year, while major market indices reached all-time highs in the U.S., Canada, Europe, U.K., Germany, Japan, and Australia.
Rising rates also increase our interest expense. For example, in U.S. dollars we pay interest to customers on their qualified cash balances when the federal funds effective rate is above 0.50%, which it has been since May 2022. Central banks in many other countries have also increased their interest rates in recent months.
As an offset, lower rates also reduce our interest expense. For example, in U.S. dollars we pay interest to customers on their qualified cash balances when the federal funds effective rate is above 0.50%, which it has been since May 2022.
Finally, the Company’s policies with respect to currencies with negative interest rates impact the overall yields on segregated cash and customer credit balances as effective interest rates in those currencies move above or below zero. We earn income on securities loaned and borrowed to support customer long and short stock holdings in margin accounts.
Finally, the Company’s policies with respect to currencies with near zero or negative interest rates impact the overall yields on segregated cash and customer credit balances as effective interest rates in those currencies move above or below zero.
In most countries with developed financial markets, benchmark interest rates also rose over the year as central banks continued to take steps to control inflation. Higher U.S. benchmark rates have boosted the interest we earn on our segregated cash, the majority of which is invested in short-term U.S. government securities and related instruments.
In most countries with developed financial markets, benchmark interest rates also declined over the course of the year as central banks’ concerns over inflation abated. Lower U.S. benchmark rates reduce the interest we earn on our segregated cash, the majority of which is invested in short-term U.S. government securities and related instruments. Higher short-term rates, and uncertainty over future U.S.
Year-Ended December 31, 2023 2022 2021 (in millions) Average interest-earning assets Segregated cash and securities $ 59,582 $ 51,644 $ 40,328 Customer margin loans 41,229 43,402 45,681 Securities borrowed 5,315 3,961 3,677 Other interest-earning assets 10,114 9,000 7,029 FDIC sweeps 1,3 3,003 2,229 2,663 $ 119,243 $ 110,235 $ 99,376 Average interest-bearing liabilities Customer credit balances $ 96,081 $ 90,172 $ 79,297 Securities loaned 9,518 10,095 10,871 Other interest-bearing liabilities 1 4 109 $ 105,600 $ 100,271 $ 90,277 Net Interest income Segregated cash and securities, net $ 2,791 $ 742 $ (9) Customer margin loans 2 2,278 1,083 535 Securities borrowed and loaned, net 276 413 568 Customer credit balances, net 2 (3,125) (763) 33 Other net interest income 1,3 600 207 36 Net interest income 3 $ 2,820 $ 1,682 $ 1,163 Net interest margin ("NIM") 2.36% 1.53% 1.17% Annualized Yields Segregated cash and securities 4.68% 1.44% -0.02% Customer margin loans 5.53% 2.50% 1.17% Customer credit balances 3.25% 0.85% -0.04% ___________________________ (1) Represents the average amount of customer cash swept into FDIC-insured banks as part of our Insured Bank Deposit Sweep Program.
Year-Ended December 31, 2024 2023 2022 (in millions) Average interest-earning assets Segregated cash and securities $ 62,117 $ 59,582 $ 51,644 Customer margin loans 53,503 41,229 43,402 Securities borrowed 5,899 5,315 3,961 Other interest-earning assets 11,180 10,114 9,000 FDIC sweeps 1,3 4,214 3,003 2,229 $ 136,913 $ 119,242 $ 110,235 Average interest-bearing liabilities Customer credit balances $ 105,840 $ 96,081 $ 90,172 Securities loaned 13,737 9,518 10,095 Other interest-bearing liabilities 26 1 4 $ 119,603 $ 105,600 $ 100,271 Net Interest income Segregated cash and securities, net $ 3,024 $ 2,791 $ 742 Customer margin loans 2 3,012 2,278 1,083 Securities borrowed and loaned, net 92 276 413 Customer credit balances, net 2 (3,595) (3,125) (763) Other net interest income 1,3 690 600 207 Net interest income 3 $ 3,223 $ 2,820 $ 1,682 Net interest margin ("NIM") 2.35% 2.36% 1.53% Annualized Yields Segregated cash and securities 4.87% 4.68% 1.44% Customer margin loans 5.63% 5.53% 2.50% Customer credit balances 3.40% 3.25% 0.85% ___________________________ (1) Represents the average amount of customer cash swept into FDIC-insured banks as part of our Insured Bank Deposit Sweep Program.
Other fees and services, for the current year increased $13 million, or 7%, compared to the prior year, to $197 million, driven by a $13 million increase in risk exposure fees as customers exhibited more risk-on behavior, and a $9 million increase in FDIC sweep fees due to higher benchmark interest rates and customer balances; partially offset by a $6 million decrease in market data fees and a $6 million decrease in payments for order flow.
Other fees and services, for the current year increased $83 million, or 42%, compared to the prior year, to $280 million, driven by a $54 million increase in risk exposure fees as customers exhibited more risk-on behavior, a $14 million increase in payments for order flow from exchange-mandated programs driven by higher customer trading volume, and a $9 million increase in FDIC sweep fees due to higher customer balances and benchmark interest rates.
In the current year, our currency diversification strategy increased our comprehensive earnings by $42 million (compared to a decrease of $211 million in the prior year), as the U.S. dollar value of the GLOBAL increased by approximately 0.41%, compared to its value as of December 31, 2022.
In the current year, our currency diversification strategy decreased our comprehensive earnings by $222 million (compared to an increase of $42 million in the prior year), as the U.S. dollar value of the GLOBAL decreased by approximately 1.45%, compared to its value as of December 31, 2023.
We raised $4,544 million in net cash from operating activities mainly driven by customer credit balances which increased by $7.8 billion, securities loaned which increased $2.4 billion, and other receivables (primarily receivables from brokers, dealers and clearing organizations) which decreased $1.8 billion; partially offset by customer margin loans which increased $5.7 billion, securities segregated for regulatory purposes which increased $3.6 billion, and securities borrowed which increased $1.1 billion.
We raised $8.7 billion in net cash from operating activities mainly driven by customer credit balances which increased $14.3 billion, investments in securities segregated for regulatory purposes which decreased $7.5 billion, and securities loaned which increased $4.9 billion; partially offset by customer margin loans which increased $20.0 billion.
Our cash flows from financing activities are comprised of short - term borrowings, capital transactions and payments made to Holdings under the Tax Receivable Agreement. Short - term borrowings from banks are part of our daily cash management in support of operating activities. Capital transactions consist primarily of quarterly dividends paid to common stockholders and related distributions paid to Holdings.
Short-term borrowings from banks are part of our daily cash management in support of operating activities. Capital transactions consist primarily of quarterly dividends paid to common stockholders and related distributions paid to Holdings. We used net cash of $833 million in our financing activities, primarily for dividends paid to common stockholders and proportionate distributions to noncontrolling interests.
Commissions for the current year increased $38 million, or 3%, compared to the prior year, to $1,360 million, driven by higher customer trading volumes in options and futures, partially offset by lower customer trading volume in stocks. Total customer options and futures contract volumes increased 12% and 1%, respectively, while stock share volume decreased 24% from the prior year.
Commissions for the current year increased $337 million, or 25%, compared to the prior year, to $1,697 million, driven by higher customer trading volumes in options, stocks and futures. Total customer options and futures contract and stock share volumes increased 32%, 4% and 22%, respectively, from the prior year.
Average commission per commissionable order for cleared customers, for the current year, increased 11% to $3.14, compared to $2.83 for the prior year, as our customers’ trading volume mix resulted in higher per order commissions across options, futures and stocks. 48 Table of Contents Other Fees and Services We earn fee income on services provided to customers, which includes market data fees, risk exposure fees, payments for order flow from exchange-mandated programs, FDIC sweep fees, minimum activity fees, and other fees and services charged to customers.
Average commission per commissionable order for cleared customers, for the current year, decreased 9% to $2.86, compared to $3.14 for the prior year, due to smaller order sizes across all products, lower average commissions per order in stocks, options and forex, and greater capture of exchange liquidity rebates passed through to customers. ‎ 47 Table of Contents Other Fees and Services We earn fee income on services provided to customers, which includes market data fees, risk exposure fees, payments for order flow from exchange-mandated programs, FDIC sweep fees, and other fees and services charged to customers.
A securities lending transaction generates (1) net interest earned on lending a security, which is based on supply and demand for that security, and (2) interest earned on the cash collateral deposited for the loan of that security, which is based on benchmark interest rates.
We earn income on securities loaned and borrowed to support customer long and short stock holdings in margin accounts. ‎ 48 Table of Contents A securities lending transaction generates (1) net interest earned on lending a security, which is based on supply and demand for that security, and (2) interest earned on the cash collateral deposited for the loan of that security, which is based on benchmark interest rates.

… 64 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

24 edited+3 added−5 removed43 unchanged
Biggest changeUSD 0.72 1.0000 0.720 75.8% $ 8,803 1.0000 0.720 75.5% $ 10,619 -0.3% EUR 0.09 1.0704 0.096 10.1% 1,178 1.1037 0.099 10.4% 1,465 0.3% JPY 3.91 0.0076 0.030 3.1% 365 0.0071 0.028 2.9% 409 -0.2% GBP 0.02 1.2099 0.024 2.5% 296 1.2731 0.025 2.7% 376 0.1% CHF 0.02 1.0816 0.022 2.3% 265 1.1881 0.024 2.5% 350 0.2% CNH 0.13 0.1445 0.019 2.0% 230 0.1404 0.018 1.9% 269 -0.1% INR 1.10 0.0121 0.013 1.4% 163 0.0120 0.013 1.4% 195 0.0% CAD 0.02 0.7385 0.011 1.2% 135 0.7549 0.011 1.2% 167 0.0% AUD 0.02 0.6816 0.010 1.1% 125 0.6811 0.010 1.1% 151 0.0% HKD 0.04 0.1281 0.004 0.5% 55 0.1281 0.004 0.5% 66 0.0% 0.950 100.0% $ 11,615 0.954 100.0% $ 14,067 0.0% The effects of our currency diversification strategy appear in two places in the consolidated financial statements: (1) as a component of other income in the consolidated statements of comprehensive income and (2) as OCI in the consolidated statements of financial condition and the consolidated statements of comprehensive income.
Biggest changeUSD 0.72 1.0000 0.720 75.5% $ 10,619 1.0000 0.720 76.6% $ 12,714 1.1% EUR 0.09 1.1037 0.099 10.4% 1,465 1.0353 0.093 9.9% 1,645 -0.5% JPY 3.91 0.0071 0.028 2.9% 409 0.0064 0.025 2.6% 439 -0.3% GBP 0.02 1.2731 0.025 2.7% 376 1.2513 0.025 2.7% 442 0.0% CHF 0.02 1.1881 0.024 2.5% 350 1.1019 0.022 2.3% 389 -0.1% CNH 0.13 0.1404 0.018 1.9% 269 0.1363 0.018 1.9% 313 0.0% INR 1.10 0.0120 0.013 1.4% 195 0.0117 0.013 1.4% 227 0.0% CAD 0.02 0.7549 0.011 1.2% 167 0.6953 0.010 1.1% 184 -0.1% AUD 0.02 0.6811 0.010 1.1% 151 0.6188 0.009 1.0% 164 -0.1% HKD 0.04 0.1281 0.004 0.5% 66 0.1287 0.005 0.5% 80 0.0% 0.954 100.0% $ 14,067 0.940 100.0% $ 16,597 0.0% Interest Rate Risk We had no variable - rate debt outstanding as of December 31, 2024.
In a normal rate environment, we typically invest a portion of these funds in U.S. government securities with maturities of up to two years, although given the current interest rate environment, at this time all such investments mature within three months.
In a normal rate environment, we typically invest a portion of these funds in U.S. government securities with maturities of up to two years, although given the current interest rate environment, at this time substantially all such investments mature within three months.
Because we conduct business in many countries and many currencies and because we consider ourselves a global enterprise based in a diversified basket of currencies rather than a U.S. dollar-based company, we actively manage our global currency exposure by maintaining our equity in GLOBALs.
Instead, because we conduct business in many countries and many currencies and because we consider ourselves a global enterprise based in a diversified basket of currencies rather than a U.S. dollar-based company, we actively manage our global currency exposure by maintaining our equity in GLOBALs, a basket of currencies.
(3) The Non-Trading – Fixed Income, Other category contains primarily U.S. government securities held in segregated safekeeping accounts for the exclusive benefit of our brokerage customers, on which the risk is measured using a stress test analysis. 64 Table of Contents
(3) The Non-Trading – Fixed Income, Other category contains primarily U.S. government securities held in segregated safekeeping accounts for the exclusive benefit of our brokerage customers, on which the risk is measured using a stress test analysis. 65 Table of Contents
Our Risk Management Committee continually monitors and evaluates our risk management policies, including the implementation of policies and procedures to enhance the detection and prevention of potential events to mitigate margin loan losses. ‎ 62 Table of Contents Value - at - Risk We estimate VaR using a historical approach, which uses the historical daily price returns of underlying assets as well as estimates of the end of day implied volatility for options.
Our Market Risk Committee continually monitors and evaluates our risk management policies, including the implementation of policies and procedures to enhance the detection and prevention of potential events to mitigate margin loan losses. ‎ 63 Table of Contents Value - at - Risk We estimate VaR using a historical approach, which uses the historical daily price returns of underlying assets as well as estimates of the end of day implied volatility for options.
Historically, our losses from these events have been immaterial in comparison to our annual trading profits. Foreign Currency Exposure As a result of our international activities and accumulated earnings in our foreign subsidiaries, our income and equity are exposed to fluctuations in foreign exchange rates.
Historically, our losses from these events have been immaterial in comparison to our annual trading profits. Foreign Currency Exposure As a result of our international activities and accumulated earnings in our non-U.S. subsidiaries, our income and equity are exposed to fluctuations in foreign exchange rates.
In currencies with negative rates, we pass through the cost of holding certain cash balances to our customers; therefore, we charge our customers interest on these cash balances .
In currencies, if any, with negative rates, we pass through the cost of holding certain cash balances to our customers; therefore, we charge our customers interest on these cash balances .
A 0.25% increase in all the relevant non-U.S. dollar benchmark rates would increase our net interest income by approximately $18 million to $20 million on an annualized basis. Our interest rate sensitivity estimate contains separate assumptions for U.S. dollar rates from other currencies’ rates and it isolates the effects of a rate increase on reinvestments.
A 0.25% increase in all the relevant non-U.S. dollar benchmark rates would increase our net interest income by approximately $24 million on an annualized basis. Our interest rate sensitivity estimate contains separate assumptions for U.S. dollar rates from other currencies’ rates and it isolates the effects of a rate increase on reinvestments.
Based on customer balances and investments outstanding as of December 31, 2023, and assuming reinvestment of maturing instruments in instruments of short-term duration, an unexpected increase of 0.25% over current U.S. dollar interest rate levels would increase our net interest income by approximately $56 million on an annualized basis, assuming the full effect of reinvestment at higher rates.
Based on customer balances and investments outstanding as of December 31, 2024, and assuming reinvestment of maturing instruments in instruments of short-term duration, an increase of 0.25% over current U.S. dollar interest rate levels would increase our net interest income by approximately $64 million on an annualized basis, assuming the full effect of reinvestment at higher rates.
If such securities were sold prior to maturity, the loss would be realized and the proceeds reinvested at prevailing higher interest rates. We also face the potential for reduced net interest income from customer deposits and margin loans if benchmark rates were to fall.
If such securities were sold prior to maturity, the loss would be realized and the proceeds reinvested at prevailing higher interest rates. ‎ 62 Table of Contents We also face the potential for reduced net interest income from customer deposits and margin loans if benchmark rates were to fall.
Based on customer balances and investments outstanding as of December 31, 2023, and assuming reinvestment of maturing instruments in instruments of short-term duration, an unexpected decrease in U.S. dollar interest rates of 0.25% would decrease our net interest income by approximately $56 million on an annualized basis, assuming the full effect of reinvestment at lower rates.
Based on customer balances and investments outstanding as of December 31, 2024, and assuming reinvestment of maturing instruments in instruments of short-term duration, a decrease in U.S. dollar interest rates of 0.25% would decrease our net interest income by approximately $64 million on an annualized basis, assuming the full effect of reinvestment at lower rates.
The scenarios are shifts of +/−50 basis points. ‎ 63 Table of Contents VaR and Stress Test Measures At December 31, At December 31, Average High Market Risk Category 2023 2022 2023 2023 (in millions) Trading (1) Equities and Currencies (2) $ 10 $ 8 $ 9 $ 10 Trading Total $ 10 $ 8 $ 9 $ 10 Non-Trading (1) Equities and Currencies $ 28 $ 26 $ 29 $ 30 Fixed Income, Other (3) 3 9 3 5 Non-Trading Total $ 31 $ 35 $ 32 $ 35 ___________________________ (1) The product categories displayed in the table as “Trading” reflect activities undertaken in the Company's market making activities. ‎ The “Non-trading” category reflects investment activities and foreign currency exposures of the Company's non-market making subsidiaries (i.e., its brokerage subsidiaries and information technology subsidiaries).
The scenarios are shifts of +/−50 basis points. ‎ 64 Table of Contents VaR and Stress Test Measures At December 31, At December 31, Average High Market Risk Category 2024 2023 2024 2024 (in millions) Trading (1) Equities and Currencies (2) $ 8 $ 10 $ 9 $ 9 Trading Total $ 8 $ 10 $ 9 $ 9 Non-Trading (1) Equities and Currencies $ 28 $ 28 $ 30 $ 34 Fixed Income, Other (3) 2 3 2 3 Non-Trading Total $ 30 $ 31 $ 32 $ 37 ___________________________ (1) The product categories displayed in the table as “Trading” reflect activities undertaken in the Company's market making activities. ‎ The “Non-trading” category reflects investment activities and foreign currency exposures of the Company's non-market making subsidiaries (i.e., its brokerage subsidiaries and information technology subsidiaries).
A 0.25% decrease in all the relevant non-U.S. dollar benchmark rates would decrease our net interest income by approximately $18 million to $20 million on an annualized basis.
A 0.25% decrease in all the relevant non-U.S. dollar benchmark rates would decrease our net interest income by approximately $22 million on an annualized basis.
Historically, we have taken the approach of not hedging the above exposures, based on the notion that the cost of constantly hedging over the years would amount to more than the random impact of rate changes on our non - U.S. dollar balances.
However, historically, we 61 Table of Contents have taken the approach of not hedging our consolidated foreign currency exposures to the U.S. dollar, based on the notion that the cost of constantly hedging over the years would amount to more than the random impact of rate changes on our non - U.S. dollar balances.
At the end of each accounting period, IBKRFS ’ equity is translated at the then prevailing exchange rate into U.S. dollars and the resulting translation gain or loss is reported as OCI in our consolidated statements of financial condition and consolidated statements of comprehensive income. OCI is also produced by our other non - U.S. subsidiaries.
GAAP purposes, at the end of each accounting period, each non-U.S. subsidiary’s equity is translated at the then prevailing exchange rate into U.S. dollars and the resulting translation gain or loss is reported as OCI in our consolidated statements of financial condition and consolidated statements of comprehensive income.
The average and high VaR amounts are based on the four quarter ending calculations performed in 2023. ‎ (2) Equities and currencies held for market making purposes are combined because these products are part of an integrated, hedged market making portfolio, on which the risk is measured using VaR.
(2) Equities and currencies held for market making purposes are combined because these products are part of an integrated, hedged market making portfolio, on which the risk is measured using VaR.
At the end of each accounting period, IBKRFS ’ assets and liabilities are revalued into Swiss francs for presentation in its financial statements. The resulting foreign currency gains or losses are reported in IBKRFS ’ income statement and, as translated into U.S. dollars for U.S.
At the end of each accounting period, these non-U.S. subsidiaries’ assets and liabilities are revalued into their respective functional currencies for presentation in their financial statements. The resulting foreign currency gains or losses are reported in their income statements and, as translated into U.S. dollars for U.S.
Our risk management systems incorporate cash forex to hedge our currency exposure at little or no cost. C urrency spot positions entered into as part of our currency diversification strategy are held by the parent holding company, IBG LLC.
Our risk management systems incorporate cash forex to hedge our currency exposure at little or no cost. Currency spot positions entered into as part of our currency diversification strategy are held by the parent holding company, IBG LLC. The U.S. dollar value of the GLOBAL decreased 1.45% as of December 31, 2024 compared to December 31, 2023.
As of December 31, 2023, we extended $44.5 billion in margin loans to our customers.
As of December 31, 2024, we had $64.4 billion in margin loans extended to our customers.
This category also includes corporate activities in foreign exchange designed to achieve the Company's currency diversification strategy.
This category also includes corporate activities in foreign exchange designed to achieve the Company's currency diversification strategy. The average and high VaR amounts are based on the four quarter ending calculations performed in 2024.
GAAP purposes, in our consolidated statements of comprehensive income as a component of other income. ‎ 60 Table of Contents IBKRFS ’ financial statements are presented in Swiss francs (i.e., its functional currency) as noted above.
GAAP purposes, in our consolidated statements of comprehensive income, as a component of “Other income.” These non-U.S. subsidiaries’ financial statements are presented in their respective functional currencies, as noted above. For U.S.
The U.S. dollar value of the GLOBAL increased 0.41% as of December 31, 2023 compared to December 31, 2022. As of December 31, 2023, approximately 25% of our equity was denominated in currencies other than the U.S. dollar. The table below presents a comparison of the U.S. dollar equivalent of the GLOBAL for the periods indicated.
As of December 31, 2024, approximately 23% of our equity was denominated in currencies other than the U.S. dollar.
As of 12/31/2022 As of 12/31/2023 GLOBAL in % of Net Equity GLOBAL in % of Net Equity CHANGE in Currency Composition FX Rate USD Equiv. Comp. (in USD millions) FX Rate USD Equiv. Comp. (in USD millions) % of Comp.
(in USD millions) FX Rate USD Equiv. Comp. (in USD millions) % of Comp.
Accordingly, IBKRFS is exposed to certain foreign exchange risks as described below: IBKRFS buys and sells securities denominated in various currencies and carries bank balances and borrows and lends such currencies in its regular course of business.
For example, our non-U.S. subsidiaries are exposed to foreign exchange risks as described below: Some of our non-U.S. subsidiaries support customer transactions in financial instruments, carry bank balances, and borrow and lend securities in various currencies in their regular course of business.
Removed
For example, some of our European and Asian operations are conducted by our Swiss subsidiary, IBKRFS. IBKRFS is regulated by the Swiss Financial Market Supervisory Authority as a securities dealer and its financial statements are presented in Swiss francs.
Added
By periodically converting currency balances into functional currency, we substantially reduce the foreign currency exposures for each of these non-U.S. subsidiaries, which minimizes the impact of exchange rate changes to its income statement.
Removed
For instance, an increase in the value of the Swiss franc would be unfavorable to the earnings of IBKRFS but would be counterbalanced to some extent by the fact that the translation gain or loss into U.S. dollars is likely to move in the opposite direction.
Added
The effects of our currency diversification strategy appear in two places in the consolidated financial statements: (1) as a component of “Other income” in the consolidated statements of comprehensive income and (2) as OCI in the consolidated statements of financial condition and the consolidated statements of comprehensive income.
Removed
In connection with the development of our currency diversification strategy, we determined to base our equity in GLOBALs, a basket of currencies.
Added
The full effect of the GLOBAL is captured in the consolidated statements of comprehensive income. The table below presents a comparison of the U.S. dollar equivalent of the GLOBAL for the periods indicated. As of 12/31/2023 As of 12/31/2024 GLOBAL in % of Net Equity GLOBAL in % of Net Equity CHANGE in Currency Composition FX Rate USD Equiv. Comp.
Removed
The full effect of the GLOBAL is captured in the consolidated statements of comprehensive income. Reported results on a comprehensive basis reflect the U.S. GAAP convention that requires the reporting of currency translation results contained in OCI as part of reportable earnings. Interest Rate Risk We had no variable - rate debt outstanding as of December 31, 2023.
Removed
At negative or near- 61 Table of Contents zero benchmark rates, such as during 2021, our interest sensitivity to rate increases is limited to the extent that a higher benchmark rate plus a spread may still be below the minimum charge.

Other IBKR 10-K year-over-year comparisons