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

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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.

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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.

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

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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.

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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

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

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Our business could be harmed by a systemic market event.

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Damage to our reputation could harm our business.

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

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

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

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We may not always pay dividends on our common stock.

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

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

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We are exposed to risks associated with our international operations.

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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.

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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.

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

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

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

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

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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.

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

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

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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

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

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Regulatory and legal uncertainties could harm our business.

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

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

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There are emerging legal and regulatory risks related to prediction markets that could harm our business.

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

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

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

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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.

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

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

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

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

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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.

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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

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

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

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

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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.

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.

The members of Holdings have the right to cause the redemption of their Holdings membership interests over time in connection with offerings of shares of our common stock. We intend to sell additional shares of common stock in public offerings in the future, which may include offerings of our common stock to finance future purchases of IBG LLC membership interests which, in turn, will finance corresponding redemptions of Holdings membership interests. These offerings and related transactions are anticipated to occur at least annually into the future. The size and occurrence of these offerings may be affected by market conditions. We may also issue additional shares of common stock or convertible debt securities to finance future acquisitions or business combinations. We currently have approximately 445.4 million outstanding shares of common stock. Assuming no anti-dilution adjustments based on combinations or divisions of our common stock, the offerings referred to above could result in the issuance by us of up to an additional approximately 1,250.7 million shares of common stock. It is possible, however, that such shares could be issued in one or a few large transactions.

We cannot predict the size of future issuances of our common stock or the effect, if any, that future issuances and sales of shares of our common stock may have on the market price of our common stock. Sales of substantial amounts of our common stock (including shares issued in connection with an acquisition), or the perception that such sales could occur, may cause the market price of our common stock to decline.

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.

Mr. Thomas Peterffy, our founder and Chairman, and his affiliates beneficially own approximately 91.6% of the economic interests and all of the voting interests in Holdings, which owns all of our Class B common stock, representing approximately 73.7% of the combined voting power of all classes of our voting stock. As a result, Mr. Peterffy has the ability to elect all of the members of our Board of Directors and thereby to control our management and affairs, including determinations with respect to acquisitions, dispositions, material expansions or contractions of our business, entry into new lines of business, borrowings, issuances of common stock or other securities, and the declaration and payment of dividends on our common stock. In addition, Mr. Peterffy is able to determine the outcome of all matters requiring stockholder approval and will be able to cause or prevent a change of control of our company or a change in the composition of our Board of Directors and could preclude any unsolicited acquisition of our company. The concentration of ownership could discourage potential takeover attempts that other stockholders may favor and could deprive stockholders of an opportunity to receive a premium for their common stock as part of a sale of our company and this may adversely affect the market price of our common stock.

Moreover, because of Mr. Peterffy’s substantial ownership, we are eligible to be and are, treated as a “controlled company” for purposes of the Nasdaq Marketplace Rules. As a result, we are not required by Nasdaq to have a majority of independent directors or to maintain Compensation and Nominating and Corporate Governance Committees composed entirely of independent directors to continue to list the shares of our common stock on Nasdaq. Our Compensation Committee is comprised of Messrs. Thomas Peterffy (Chairman of the Compensation Committee), Earl H. Nemser (our Vice Chairman) and Milan Galik (our Chief Executive Officer). Mr. Peterffy’s membership on the Compensation Committee may give rise to conflicts of interests in that Mr. Peterffy is able to influence all matters relating to executive compensation, including his own compensation.