Interactive Brokers is a leading provider of professional trading services, and it has licenses from the IIROC, FINMA, FSA, FCA, SFC, MAS, and CFTC. Selecting a secure broker contributes to a premium online trading experience.
Each brokerage firm has strengths and weaknesses. This article answers the question, “Is Interactive Brokers legit?”
|Interactive Brokers||Saxo Bank||TradeStation Global|
|Broker listed on stock exchange||Yes||No||No|
|Annual financial statements on website||Yes||Yes||Yes|
|Mobile two-step authentication||Yes||Yes||Yes|
|Broker ownership transparency||Yes||Yes||Yes|
|Broker management transparency||Yes||Yes||Yes|
|Broker is audited by the Big Four||Yes||Yes||Yes|
Regulation & Investor Protection
The foundation of a brokerage firm’s trustworthiness is its licenses. Top-tier licenses are granted by top-tier regulators and require years of consistent safety practices. Interactive Brokers is regulated in the USA, UK, Ireland, Luxembourg, Hungary, India, Australia, Canada, Japan, and Hong Kong. It has licenses from the IIROC, FINMA, FSA, FCA, SFC, MAS, and CFTC.
|Country of regulation:||USA, Ireland, UK, Luxembourg, Hungary, India, Australia, Canada, Japan, Hong Kong|
|Investor protection amount:||£85,000 or $500,000 (but only $250,000 for cash) in the UK depending on the assets you hold; $500,000 ($250,000) in the US; €20,000 (IB Ireland & Luxembourg) or €100,000 (IB Central Europe) in the EU, CAD 1 million in Canada; HKD 500,000 in Hong Kong|
A second important variable is a broker’s investor protection programs. The FCA in the UK provides the Financial Services Compensation Scheme (FSCS) with protection for £85,000 for each covered account. The investor protection amount for non-UK residents is €20,000.
Other aspects that contribute to a broker’s trustworthiness include its banking background, stock exchange presence, transparent fee structure, two-step authentication, ownership transparency, and auditors.
A banking history adds to the safety of an online broker. Interactive Brokers doesn’t have a banking background.
Stock Exchange Presence
A brokerage firm present on a stock exchange is trustworthy. This tells investors that a broker complies with strict reporting requirements. Interactive Brokers is listed on the NASDAQ stock exchange.
Transparent Financial Statements
Financial statements show valuable information about an online broker’s practices. Interactive Brokers publishes annual financial reports.
Online trading accounts must have access to the best safety measures. Interactive Brokers offers two-step authentication on all its platforms.
Ownership & Management Transparency
Interactive Brokers publicly shares details about its ownership structure. The basics of its management structure are available on its official website.
Big Four Auditors
The “Big Four” are international financial auditors that performs audits on financial brokers. These auditors are WC, KPMG, Deloitte, and EY. The Big Four audit Interactive Brokers.
Interactive Brokers is a leading brokerage firm with professional platforms and services. It is a secure broker with top-tier licenses. You should check our in-depth reviews to learn more about brokerage firms and safety features.
Interactive Brokers compared to other brokers:
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All trading involves risk. More than 80% of investors lose in spread bet and CFD trading. As these complex instruments allow for the use of leverage, there is a high risk of losing more money than you have deposited. Before attempting to participate in spread bets and CFDs, consider how well you understand them and if you can afford to lose your money.