Broker Fee Information

Brokers have the ability to charge their clients for services rendered based on a fee-per-trade unit for each asset class (e.g. stocks, options, etc.), exchange and currency. The trade unit is determined by the unit Interactive Brokers uses for its commissions charges and can be on a per share, per contract, or % of trade value basis.

Specify all commission markups on the Client Fees page in Broker Portal.

Client Fee Templates

Client fee schedules can be applied to accounts individually or can be stored in templates. As a broker, you can configure fees for one or more client accounts, or set up client fee schedules in templates, then assign the templates to client accounts. The use of templates allows you to easily maintain different fee schedules for multiple client accounts.

If you are a new broker (i.e. you just opened your IBKR account), then there will be a blank default client fee template, which you can then configure with your own fee schedule. If you are an existing broker, your old global fee schedule is now the default client fee template. You can modify the default template but you cannot delete it.

Rules for Broker Client Fees

The following general rules apply to broker client fee schedules:

• If a broker has not created a fee schedule for an individual account, then the default client fee template will automatically apply to that account.

• If a broker has not created any fee schedule at all, either a client fee template or fee schedules for individual accounts, then Interactive Brokers' standard commissions will be charged with no markup for the broker.

• Broker client markups are generally limited to 15 times Interactive Brokers' standard commissions.

• No fee per trade will be applied if the client calls IBKR to close a trade.

• Brokers can also specify fees per trade for specific products and exchanges.

• Fees and markups owed to fully disclosed and non-disclosed brokers are sent to the master account and then swept to the broker's Proprietary Account for Broker-Dealers every night.

• Auto liquidation trades are not subject to markups.

Types of Broker Client Markups

For each asset class/currency, a broker can select one of the fee-per-trade client markup types listed below:

Markup Summary

Brokers can view all commission markup schedules for their client accounts on the Markup Summary page in Account Management. The Markup Summary sorts information by fee schedule, and displays client accounts that use the global markup schedule together.

Trade Allocation Minimum Commissions

We charge a minimum fee for US stock trades allocated by Brokers to their clients. Brokers can choose to charge the allocation minimum fee to their master account or to the client account. By default, the allocation minimum is charged to the client account unless there is a specific rate arrangement between the client and the Broker.

The minimum amount charged per trade allocation is as follows:

• Fixed Rate Pricing Minimum: Minimum (trade value * 0.0005, USD 1)

• Tiered Pricing Minimum: Minimum (trade value * 0.0005, USD 0.35)

Brokers can mark down credit and short proceeds credit interest and mark up debit interest. Markups and markdowns are entered as % with the following fields available for input:

• Pay Client No Credit Interest - If this box is checked all credit and short proceeds credit interest will be paid to the broker and the client will not receive any revenue.

• Credit Markdown - A % amount will be subtracted from the credit interest paid and given to the broker. Clients will not be charged negative interest so if the markdown is greater than the currently available credit interest rate then no interest will be paid.

• Debit Markup - A % amount will be added to the debit interest. The maximum markup is 5%.

• Short Credit Markdown - Operates like the Credit Markdown. A % amount will be subtracted from the short proceeds credit interest paid and given to the broker.

Borrow Fee Markups

Brokers can charge markups to their clients based on our stock borrow rates, entered as a variable or fixed percentage of our borrow rate. You can enter both types of markups and our system will apply the markup rate that results in the larger total amount.

• Variable borrow fee markup - This is a variable percentage of our borrow rate. The total cost to your client is calculated as follows:

  Borrow Rate (1 + Variable Markup Percentage)

  The range of acceptable values that you can enter is 0 - 25%.

• Fixed borrow fee markup - This is a fixed percentage of our borrow rate. The total cost to your client is calculated as follows:

  Borrow Rate + Fixed Markup Percentage

  The range of acceptable values that you can enter is 0 - 1%.

Example

Symbol ABC Borrow Rate = 35%

Variable Borrow Markup = 20%

Fixed Borrow Markup = 1%

Calculating the total cost to your client, we have:

Variable markup

35% (1 + 20%) = 42% total cost to your client

or

0.35 (1.2) = 0.42

Fixed markup

35% + 1% = 36%

or

0.35 + 0.01 = 0.36

Our system applies the larger total amount, so in this example, we would apply the Variable Borrow Markup and the total cost to your client is 42%, which includes our borrow rate plus your borrow markup.

Note: Interest markups and markdowns are rounded to two decimals.

Fully-disclosed brokers can configure and submit electronic invoices from the Invoicing page from the Manage Client > Fees menu in Account Management. Before you can submit fee invoices for client accounts, you must first configure Automatic Billing for Monthly/Quarterly Invoicing for the account(s) on the Invoicing page. You must specify a monthly or quarterly markup limit, then calculate the markup and submit an electronic invoice for each client account at any time, up to the specified limit. The invoice amount will be automatically transferred from the client account to the broker account. Invoices submitted prior to 5:30 (17:30) PM EST will be processed by IBKR the same day (U.S. night) and appear on that day's statements. Invoices submitted after 5:30 (17:30) PM EST will be processed by IBKR on the next business day. You can submit invoices for up to ten clients at a time, but only one invoice per client account per day.

You can also upload a .csv (comma-separated values) file containing multiple client invoices. The .csv file must contain fields for:

• Client Account Number

• Amount (in client account's base currency)

• Memo (this field is optional)

Invoices submitted after 5:30 (17:30) PM EST will be processed by IBKR on the next business day. You can submit invoices for up to ten clients at a time, but only one invoice per client account per day.

Introducing Broker client markups are limited to 15 times IBKR's highest tiered rate + external fees. In the case of US stocks, the highest tiered rate would be 0.0035 USD per share. USD-denominated bonds are subject to a separate cap on mark-ups. US option mark-ups are limited to 10% of trade value. 25% of debit interest markups over 1% will be collected by IBKR. These limits are subject to change, and specific products may have an additional limit in place. No markups will be applied if a client calls IBKR to close a position.