Glossary
IB rebate abuse
IB rebate abuse is generating trading volume in order to earn the per-lot rebates a broker pays its introducing brokers, rather than to take market risk. Typical methods are matched trades between linked accounts and rapid open-and-close trading.
Why it matters for brokers and payment firms
The rebate moves real money from the broker to the introducer. When the introducer, its clients and their funding sources are linked, rebates can be the laundering channel as well as a commercial loss.