Responsibilities and limits

Being an introducing broker means people trust you with decisions that affect their money, and that trust comes with clear limits. This lesson covers what an IB should not do, how to disclose your relationship with a broker, and why you must confirm the regulatory position yourself.

What an IB does not do

Hold client money

Clients deposit funds directly with the broker, through the broker's own payment channels. An IB should never accept deposits, hold money "on behalf of" a client, or ask anyone to send funds to a personal account. Holding client money is a regulated activity in most places, and requests to do so are a common feature of scams.

Trade on a client's behalf

Managing someone else's account — placing trades for them, or asking for their login details "to help" — is a form of investment management. Without the right authorisation it can be unlawful. Never ask for or accept a client's password.

Give personalised advice unless authorised

There is a difference between education and advice:

Keep your content general, explain your reasoning, and let people make their own decisions. If you are asked for personal recommendations, say clearly that you cannot give them.

Make misleading claims

Do not promise profits, show only winning trades, describe trading as safe, or imply that a broker's regulation protects people from trading losses. Regulation can cover how a firm is run and how client money is held; it does not stop markets moving against a position. Remind people that most retail CFD accounts lose money.

Disclose the relationship

Your audience should know that you may be paid when they open an account through you. Good disclosure is:

• Clear — in plain language, not hidden in small print.
• Prominent — near the link or code, and repeated in videos and posts that mention the broker.
• Specific — it says whether your commission affects their costs.

Worked example: a disclosure

An illustrative disclosure might read:

"I am an introducing broker for the broker linked here. If you open an account using my link and trade, the broker may pay me a commission of up to 4 USD per standard lot you trade. This comes from the broker's revenue and does not increase your spread or commission. Trading involves significant risk and most retail CFD accounts lose money."

If you use a spread mark-up, the honest version is different. With the 0.5-pip EUR/USD mark-up from the previous lesson, a client trading 10 standard lots in a month pays 0.5 × 10 USD × 10 lots = 50 USD more, and your disclosure should say that your commission is added to their spread. Remember that any commission depends on actual client trading and broker terms, and can be zero.

Regulation depends on where you operate

Whether an introducer needs a licence, registration or other authorisation depends on the jurisdiction — where you are based, where your audience is and where the broker is regulated. Activities such as financial promotion, arranging deals or introducing clients are regulated in many countries, and the broker's own regulator may also set rules for how its introducers behave.

If you operate in or into the UAE

In the UAE, financial promotion and introducing activities are regulated. Which authority is relevant depends on where you operate:

• onshore UAE — the Capital Market Authority (CMA, formerly the SCA);
• the Dubai International Financial Centre (DIFC) — the Dubai Financial Services Authority (DFSA);
• Abu Dhabi Global Market (ADGM) — the Financial Services Regulatory Authority (FSRA).

Confirm your obligations with the relevant regulator or a qualified adviser before you start promoting a broker or referring clients. Do not rely on a broker's assurance, a forum post or this lesson as legal advice.

Wherever you are

• Check the regulatory status of any broker you work with on the regulator's own public register.
• Keep records of your agreement, your disclosures and your marketing materials.
• Follow data-protection rules when you collect names, emails or phone numbers.
• Never help anyone bypass the broker's identity or suitability checks.

A quick self-check

Before you publish or reply to a follower, ask:

1. Am I teaching a concept, or telling this person what to do with their money?
2. Have I disclosed that I may be paid?
3. Have I included a balanced risk warning?

Key takeaways

• IBs do not hold client funds, accept passwords or trade on clients' behalf.
• Stay on the education side of the line; personalised advice usually requires authorisation.
• Disclose your relationship clearly, including whether your commission increases client costs.
• Whether you need authorisation depends on your jurisdiction; in the UAE, check with the CMA (formerly the SCA), DFSA or FSRA as relevant, or a qualified adviser.
• Honest, balanced communication protects your clients and your own long-term reputation.