What is an introducing broker?
An introducing broker (IB) or affiliate is a person or company that refers new clients to a broker and is paid by that broker for those referrals or for the trading the referred clients do.
The client opens the account with the broker, and the broker holds the money and executes the trades. The IB or affiliate only brings the client in. On forums, "IB" in forex means exactly this.
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Formal definition and the difference between the two
- Introducing broker. In regulated futures markets, an IB solicits or accepts client orders and passes them to a clearing broker, but does not hold client funds. In retail forex and CFDs, the term is used more loosely. It usually means a partner who keeps contact with referred clients, for example by running a local community or giving platform support.
- Affiliate. This is a marketing partner, such as a website, video channel or social account, who sends traffic through a tracked link. An affiliate usually has no ongoing relationship with the client.
Common payment models in a forex affiliate program or IB agreement:
| Model | How the partner is paid |
|---|---|
| CPA (cost per acquisition) | A one-off amount when a referred client meets set conditions, such as a first deposit |
| Revenue share | A share of what the broker earns from the client |
| Per-lot rebate | A fixed amount for each lot the client trades. This is the usual introducing broker commission |
| Multi-tier | A share of what sub-partners (sub-IBs) bring in |
Worked example (hypothetical)
A broker agrees to pay an IB a rebate of R per standard lot traded by referred clients. In a month, a referred client trades L lots. The IB receives R × L.
This payment does not depend on whether the client made or lost money. It depends only on volume.
That creates a conflict of interest: the IB earns more when the client trades more. On some account set-ups, the rebate is funded through a wider spread or an added commission, so the client pays for it. To see how spread and lot size change your own cost, use the calculators.
Where you see the term
- Registration forms: a "partner code", "referral link" or "IB code" field links your account to a partner.
- Partner portals: reports of referred clients, traded volume and accrued rebates.
- News and regulator notices: warnings about promoters of trading platforms on social media and messaging apps. SECP warnings by press release naming platforms (Quotex 09.04.2025; IBKR look-alikes, IGIL Securities, BMA Capital No.108 etc. 22.05.2025; Hillhouse Capital, S-169 Wharton 13.01.2026), none of which names Exness
Edge cases and the Pakistan context
- Disclosure. A partner who earns per lot is not neutral. Extrade Pakistan is itself an affiliate partner of Exness.
- Who is your counterparty. Your contract is with the broker, not with the IB. See counterparty and A-book and B-book.
- Account managers. An IB who asks for your password or offers to trade for you is going beyond referral. Treat this as a serious warning sign.
- Regulation in Pakistan:
- Securities and Exchange Commission of Pakistan (SECP), with trading in listed securities and commodities only via SECP-licensed securities and futures brokers
- On licensing: under the Futures Market Act 2016, s.47(1), no one may carry on a regulated activity (futures broker, adviser, representative) without an SECP licence
- On penalties: under the Futures Market Act 2016, s.104(3), operating without a licence carries, for an individual, a fine of up to PKR 250 million or up to 3 years' imprisonment, or both
- On offshore platforms: per the SECP, offshore forex/CFD platforms operate without regulatory approval in Pakistan
- On payments: per the SBP, remitting foreign exchange to overseas forex/margin/CFD platforms is not allowed through any payment channel (FERA s.5(1))
- Whether a specific referral activity falls under these rules is a legal question. Check it with the regulator or a lawyer. More on this in Regulation and Safety.
Leveraged forex and CFD trading can lose money fast. That stays true whether or not you joined through a partner.
Related terms
Dealer · Compliance · Contract size · Exposure · Trading glossary
Frequently asked questions
Does using an IB cost me more?
It can. That happens if the rebate is funded through a spread markup or an extra commission. Compare the conditions of the account you are offered with the broker's published conditions.
Is an IB the same as a broker?
No. The IB refers clients. The broker opens the account, holds the funds and executes the trades.
Can I remove a partner code from my account?
That depends on the broker's rules. Ask the broker directly.
Why do IBs promote high trading activity?
Per-lot pay rewards volume, not your results. Keep this in mind when reading any partner's content.