Interactive Brokers Group Inc

We face a variety of risks that are substantial and inherent in our businesses, including market, liquidity, credit, operational, legal and regulatory. In addition to the risks identified elsewhere in this Annual Report on Form 10-K, the following is a summary of the risk factors that apply to our business results of operations and financial condition. Please read the detailed discussion of these risks following the summary.

Risks Related to Our Company Structure

Future sales of our common stock in the public market could lower our stock price, and any additional capital raised by us through the sale of equity or convertible securities may dilute your ownership in us.

Control by Mr. Thomas Peterffy of a majority of the combined voting power of our common stock may give rise to conflicts of interests and could discourage a change of control that other stockholders may favor, which could negatively affect our stock price, and adversely affect stockholders in other ways.

We depend on IBG LLC to distribute cash to us in amounts sufficient to pay our tax liabilities and other expenses.

We are required to pay Holdings for the benefit relating to additional tax depreciation or amortization deductions we claim as a result of the tax basis step-up our subsidiaries received in connection with our initial public offering (“IPO”) and certain subsequent redemptions of Holdings membership interests.

Certain provisions in our amended and restated certificate of incorporation may prevent efforts by our stockholders to change our direction or management.

Risks Related to Our Business

Macroeconomic, geopolitical and other challenges and uncertainties could have a negative impact on our business.

Our business could be harmed by a systemic market event.

Damage to our reputation could harm our business.

The impact of a public health emergency may have a material adverse impact on our business and results of operations.

Our future success will depend on our response to the demand for new services, products and technologies.

The loss of our key employees would materially adversely affect our business.

We may not pay dividends on our common stock at any time in the foreseeable future.

Our direct market access clearing and non-clearing brokerage operations face intense competition.

We are subject to potential losses as a result of our clearing and execution activities.

We are exposed to risks associated with our international operations.

We are subject to counterparty risk whereby defaults by parties with whom we do business can have an adverse effect on our business, financial condition and results of operations.

Any future acquisitions may result in significant transaction expenses, integration and consolidation risks and risks associated with entering new markets, and we may be unable to profitably operate our consolidated company.

Because our revenues and profitability depend on trading volume and interest rate levels, they are prone to significant fluctuations and are difficult to predict.

We may incur material trading losses from our market making activities.

Reduced spreads in securities pricing, levels of trading activity and trading through market makers could harm our business.

We may incur losses in our market making activities in the event of failures of our proprietary pricing model.

The valuation of the financial instruments we hold may result in large and occasionally anomalous swings in the value of our positions and in our earnings in any period.

We are exposed to losses due to lack of perfect information.

Rules governing designated market makers may require us to make unprofitable trades or prevent us from making profitable trades.

Our risk management policies and procedures may not be fully effective in mitigating our risk exposure in all market environments or against all types of risks.

Risks Related to Laws, Regulations and Litigation

Our future efforts to sell shares or raise additional capital may be delayed or prohibited by regulations.

Regulatory and legal uncertainties could harm our business.

We are subject to risks relating to litigation and potential securities laws liability.

Heightened regulatory and legislative requirements and changes in the U.S. and globally have increased our compliance, regulatory and other risks and costs.

 We may incur additional tax expense or become subject to additional tax liabilities.

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Risks Related to Our Intellectual Property, Technology, Cybersecurity and Data Privacy

We may not be able to protect our intellectual property rights or may be prevented from using intellectual property necessary for our business.

Our reliance on our computer software could cause us great financial harm in the event of any disruption or corruption of our computer software. We may experience technology failures while developing our software.

We depend on our proprietary technology, and our future results may be impacted if we cannot maintain technological superiority in our industry.

We do not have fully redundant systems. System failures could harm our business.

Failure of third-party systems on which we rely could adversely affect our business.

Internet-related issues may reduce or slow the growth in the use of our services in the future.

We could be the target of a cyber-attack or experience a cybersecurity incident that impairs internal systems, degrades services we provide to customers, or results in a data compromise, causing reputational or monetary damages as a consequence.

We are subject to stringent and complex data privacy rules. Failure to comply with these rules could have an adverse effect on our business, financial condition, and results of operation.

Risks Related to Cryptocurrency

We rely on third-party Cryptocurrency Service Providers (“CSPs”) to provide our customers the ability to access cryptocurrency trading and custody services.

A data breach at the CSP may result in irreversible losses, which would adversely affect our customers and our business.

We may encounter technical issues which would result in disruption or interruption of our customers’ access to their CSP accounts.

Changes in laws and regulations regarding cryptocurrency may negatively impact our ability to enable our customers to buy, hold and sell cryptocurrencies in the future and may adversely affect our business.

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