Clearing

In the financial world, there are two main types of brokerage firms: introducing brokers and clearing agents. Each performs distinct functions and is subject to different regulatory oversight requirements.

Folionet operates as an introducing broker, which means it acts as an intermediary between the client and the market, while the execution, settlement, and custody of trades are managed by its clearing agent, Apex Clearing LLC.

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What does an introducing broker do?

An introducing broker is a firm that facilitates account opening, order reception, and customer service, but delegates more complex operational functions (such as trade execution and settlement) to a specialized company—in this case, Apex Clearing.

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What is the role of a clearing firm?

A clearing firm performs three key functions:

• Clearing: Ensures that the price and quantity of shares agreed upon in a trade match between the buyer and the seller.
• Settlement: Oversees that both parties fulfill their obligations, guaranteeing that money and assets are transferred correctly.
• Custody: Once the trade is completed, the firm safeguards the assets and maintains detailed records of their location and ownership.

This model allows Folionet to focus on providing a seamless and secure user experience, while Apex ensures the integrity and compliance of market operations.