Interactive Brokers Group, Inc.

Our proprietary technology is the key to our success. We believe that integrating our system with electronic exchanges and market centers worldwide results in transparency, liquidity and efficiencies of scale. Together with the IB SmartRouting SM system and our low execution costs, this approach reduces overall transaction costs to our IBKR Pro SM customers and, in turn, increases our transaction volume and profits (customers who elect to use our IBKR Lite SM offering do not take advantage of our IB SmartRouting SM technology). Over the past four decades, we have developed an integrated trading system and communications network, positioning our company as an efficient, high quality, and low-cost conduit for the global flow of risk capital across assets and product classes on electronic marketplaces. We believe developing, maintaining and continually enhancing our proprietary technology provides both customers and ourselves competitive advantages in adapting faster than our competitors to the industry's ever-changing environment and in pressing our advantages in opportunities presented by new exchanges, products pricing and regulatory changes.

Our proprietary technology infrastructure enables us to provide our customers with the ability to execute trades at among the lowest execution costs in the industry for comparable services. Customer trades are both automatically captured and reported in real time in our system. Our customers can trade on more than 170 electronic exchanges and market centers in 40 countries around the world. These exchanges and market centers are all partially or fully electronic, meaning that customers can buy or sell a product traded on that exchange via an electronic link from their computer or mobile device through our system to the exchange. We offer our products and services through a global communications network designed to provide secure, reliable and timely access to the most current market information. We provide our customers with a variety of means to connect to our brokerage systems, including cross connects, dedicated point-to-point data circuits, extranets, virtual private networks and the Internet.

Specifically, our customers receive electronic access worldwide via our Trader Workstation SM (real-time Java-based trading platform), our next-generation IBKR Desktop, our proprietary Application Programming Interface (“API”), our IBKR Mobile app, our Client Portal-based Quick Trade feature or industry standard Financial Information Exchange (“FIX”) connectivity. Customers requiring a professional quality trading application with a sophisticated user interface utilize our Trader Workstation SM, which is suitable for desktop platforms. Customers interested in developing programmatic trading utilize our API, which supports multiple programming languages. Large institutions with FIX infrastructure prefer to use our FIX solution for seamless integration of their existing order gathering and reporting applications.

While many brokerages rely on employees performing manual procedures to execute many day-to-day functions, we employ proprietary technology to automate, or otherwise facilitate, many of the following functions:

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account opening and funding;

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smart order routing, resulting in industry-leading execution quality;

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seamless trading across all types of securities, futures and currencies around the world from one account;

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diverse order types, algorithms and analytical tools offered to customers;

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securities lending and short stock availability;

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delivery of customer information, such as confirmations, customizable real-time account statements, audit trails and regulatory trade reporting;

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compliance;

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customer service; and

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risk management through automated real-time credit management of all new orders and margin monitoring.

As transaction volumes, customer accounts and supported asset classes continue to grow, we continually evaluate system capacity, scalability and resiliency to support our current and anticipated demand. These evaluations inform us of our technology investment priorities and infrastructure planning. We also assess technology enhancements in light of evolving regulatory requirements and market structure changes across jurisdictions in which we operate.

Research and Development

One of our core strengths is our expertise in the rapid development and deployment of automated technology for the financial markets. Our core software technology is developed internally, and we do not generally rely on outside vendors for software development or maintenance. To achieve optimal performance from our systems and in response to changing market conditions, we continuously upgrade and improve our software. Use of the best available technology not only improves our performance but also helps us attract and retain talented developers. Our software development costs are relatively low, because the employees who oversee the development of the software are often the same employees who design the application, evaluate its performance, and guide our quality assurance professionals in executing robust quality assurance testing procedures. The involvement of our developers in each of these processes enables us to add features and further refine our software rapidly.

Our internally-developed, fully integrated trading and risk management systems are unique and transact across all product classes. These systems have the flexibility to assimilate new trading venues and new product classes without compromising transaction speed or fault tolerance. Fault tolerance, or the ability to maintain system performance despite trading venue malfunctions or hardware failures, is crucial to ensuring best possible executions for our customers. Our systems are designed to detect trading venue malfunctions and quickly take corrective action by rerouting pending orders when possible.

Our company is technology-focused, and our management team is both hands-on and technology savvy. Most members of the management team participate in algorithm design and supervise the creation of detailed specifications for new applications. The development queue is prioritized and highly disciplined. Progress on programming initiatives is generally tracked on a bi-weekly basis by the Steering Committee and other committees consisting of senior executives. This enables us to prioritize key initiatives and achieve rapid results. All new business involves a software development project. We generally do not engage in any business unless we can achieve significant cost and performance advantages by leveraging automation throughout the business process.

We achieve a rapid software development cycle by leveraging a highly integrated, object-oriented development environment. The software code is modular, with each object providing a specific function while being reusable across multiple applications. New software releases are tracked and tested with proprietary automated testing tools. We are not hindered by disparate and often limiting legacy systems assembled through acquisitions.

For the past four decades, we have built and continuously refined our automated and integrated, real-time systems for trading, risk management, clearing and cash management, among others. We have also assembled a proprietary connectivity network between our infrastructure and the global financial ecosystem. Efficiency and speed in performing key prescribed functions are always crucial requirements for our systems. As a result, our systems assimilate market data, disseminate market prices to customers and update risk management information in real time, across tradable products and classes around the globe.

We continually monitor developments in emerging technologies, including in the field of Artificial Intelligence (“AI”), to evaluate applications, systems and services with potential to enhance development efficiency or improve performance, risk management or our customer experience. Any such technologies are evaluated within our existing development, testing and governance frameworks. As part of our technology development and infrastructure planning activities, we continue to enhance our disaster recovery and business continuity capabilities. During 2025, we made measurable progress in this area, and disaster preparedness will remain a focus in 2026 as we continue evaluating system capacity, resiliency and operational readiness.

Transaction Processing

Our transaction processing is automated over the full life cycle of a trade. Our fully automated IB SmartRouting SM system searches for the best possible combination of prices available at the time a customer order is placed and immediately seeks to execute the order electronically or send it where the order has the highest probability of execution at the best price. At the exchanges and market centers where our market making business continues to operate, our software generates and disseminates continuous bid and offer quotes on tradable, exchange-listed products.

When an order is executed, our systems capture and deliver this information back to the source, either to the customer via the brokerage system or to the market making system, generally within a fraction of a second. Simultaneously, the trade record is written into our clearing system, where it flows through a chain of control accounts allowing us to reconcile trades, positions and money until the final settlement occurs. Our integrated software tracks other important activities, such as dividend distributions, corporate actions, options exercises, securities lending, margining, risk management, and funds receipt and disbursement.

IB SmartRouting SM

At the time an order is placed, IB SmartRouting SM searches for the best destination price in view of the displayed prices, sizes and accumulated statistical information about the behavior of market centers, then immediately seeks to execute that order electronically. Unlike other smart routers, IB SmartRouting SM never relinquishes control of the order, and constantly consumes data in search of the best price. It continuously evaluates fast-changing market conditions and dynamically reroutes all or parts of the order seeking to achieve optimal execution. For example, for U.S. options, IB SmartRouting SM can represent each leg of a spread order independently, if needed, and, in that event, enters each leg as an individual order at the best possible venue. IB SmartRouting Autorecovery SM reroutes a customer’s U.S. options order in the case of an exchange malfunction, while we absorb any risk of double executions. In addition, IB SmartRouting SM checks each new order to see if it could be executed against any existing orders resting in our automated Alternative Trading System (“ATS”). As more exchanges and market centers come online, as trading hours for products continue to expand, and as our systems continue to attract more users, IB SmartRouting SMand IBKR ATS facilities become ever more important for our customers.