Interactive Brokers Group (IBKR) 10-K risk factor changes: FY2022 vs FY2021

We currently have approximately [removed: 98] [added: 103] million outstanding shares of common stock.

[added: 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 [removed: 320] [added: 317] million shares of common stock.

Mr. Thomas Peterffy, our founder and Chairman, and his affiliates beneficially own approximately 90.5% of the economic interests and all of the voting interests in Holdings, which owns all of our Class B common stock, representing approximately [removed: 76.5%] [added: 75.5%] of the combined voting power of all classes of our voting stock.

Thomas Peterffy (Chairman of the Compensation [removed: Committee) and] [added: Committee),] Earl H.

Nemser (our Vice [removed: Chairman).][added: Chairman) and Milan Galik (our Chief Executive Officer).]

We are a holding company and our primary assets are our approximately [removed: 23.5%] [added: 24.5%] equity interest in IBG LLC and our controlling interest and related rights as the sole managing member of IBG LLC and, as such, we operate and control all of the business and affairs of IBG LLC and are able to consolidate IBG LLC’s financial results into our financial statements.

These increases in tax basis will result in increased deductions in computing our taxable income and resulting tax savings for us generally over the [removed: 15 year] [added: 15-year] period which commenced with the initial [removed: purchase.][added: purchase and subsequent purchases, respectively.]

As a result of the IPO and the Redemptions by Holdings, the increase in the tax basis attributable to our interest in IBG LLC is [removed: $1.8] [added: $1.9] billion.

The tax savings that we would actually realize as a result of this increase in tax basis likely would be significantly less than this amount multiplied by our effective tax rate due to a number of factors, including the allocation of a portion of the increase in tax [removed: basis to foreign or non\-depreciable fixed assets, the impact of the increase in the tax basis on our ability to use foreign tax credits and the rules relating to the amortization of intangible assets, for example.]

Based on facts and assumptions as of December 31, [removed: 2021,] [added: 2022,] including that subsequent purchases of IBG LLC interests will occur in fully taxable transactions, the potential tax basis increase resulting from the historical and future purchases of the IBG LLC interests held by Holdings could be as much as [removed: $15.4] [added: $11.4] billion.

The tax basis increase of [removed: $15.4] [added: $11.4] billion assumes that (a) all remaining IBG LLC membership interests held by Holdings are purchased by us in one or more taxable transactions and (b) such purchases in the future are made at prices that reflect the closing share price as of December 31, [removed: 2021.][added: 2022.]

The impact of the COVID-19 pandemic [removed: and the measures implemented to contain the spread of the virus] [added: or another public health emergency] may have a material adverse impact on our business and results of operations.

The response of governments and societies to the COVID-19 pandemic, which [removed: includes] [added: included] temporary closures of certain businesses; social distancing; travel restrictions, “shelter in place” and other governmental regulations; and reduced consumer spending due to job losses, [removed: has] significantly impacted volatility in the financial, commodities and energy markets, and general economic conditions.

Our net interest income and profitability could be negatively affected by lower benchmark interest rates caused by central banks lowering target benchmark rates in an attempt to buffer their economies from [removed: the uncertainties around the] [added: new] COVID-19 [removed: pandemic.][added: outbreaks or another public health emergency.]

[removed: As a result, any disruption to our] information technology systems, including from cyber incidents, could have a material adverse effect on our business.

In addition, our ability to recruit, hire and onboard employees could be negatively impacted by [added: new] COVID-19 [removed: restrictions.][added: restrictions or another public health emergency.]

The impact of the COVID-19 [removed: pandemic] [added: pandemic, including from subsequent outbreaks or new variants, or from another public health emergency,] on our future financial results could be significant but currently cannot be quantified, as it will depend on numerous evolving factors that cannot be accurately predicted, including, but not limited to, the duration and spread of the pandemic; its impact on our customers, employees and vendors; governmental regulations in response to the pandemic; and the overall impact of the pandemic on the economy and society, among other factors.

IBC, IBUK, IBIE, [removed: IBLUX,] IBKRFS, IBCE, IBHK, and IBSG are subject to similar change in control regulations promulgated by the IIROC in Canada, the FCA in the United Kingdom, the CBI in Ireland, the CSSF in Luxembourg, the FINMA in Switzerland, the MNB in Hungary, the SFC in Hong Kong, and the MAS in Singapore, respectively.

Regulatory bodies include, in the U.S., the SEC, FINRA, the Board of Governors of the Federal Reserve System, the Chicago Board Options Exchange, the CME, the CFTC, and the NFA; in Canada, the IIROC and various Canadian securities commissions; in the United Kingdom, the FCA; in Ireland, the CBI; in [removed: Luxembourg, the CSSF; in] Switzerland, the FINMA; in Hungary; the MNB; in India, the Securities and Exchange Board of India; in Hong Kong, the SFC; in Japan, the Financial Supervisory Agency and the Japan Securities Dealers Association; in Singapore, the MAS; and in Australia, the Australian Securities and Investment Commission.

prime brokers who, in an effort to satisfy the demands of their customers for hands\-on electronic trading facilities, universal access to markets, smart routing, better trading tools, [added: and] lower commissions and financing rates, have embarked upon building such [removed: facilities,] [added: facilities and] product and service enhancements;

A number of brokers provide our technology and execution services to their customers, and these brokers [removed: will] [added: can] become our competitors if they develop their own technology.

During [removed: 2021,] [added: 2022,] approximately 31% of our net revenues were generated by our operating subsidiaries outside the U.S. We are exposed to risks and uncertainties inherent in doing business in international markets, particularly in the heavily regulated brokerage industry.

Our systems and operations [removed: also] are [added: also] potentially vulnerable to damage or interruption from human error, cyber-attacks, natural disasters, power loss, telecommunication failures, break\-ins, sabotage, computer viruses, intentional acts of vandalism and similar events.

Our backup services are currently limited to U.S. [added: and major European] markets.

We rely on certain third\-party computer systems or third\-party service providers, including clearing systems, exchange systems, banking systems, cryptocurrency systems, Internet [removed: service,] [added: services, third-party identity verification services,] co-location facilities, communications facilities and other facilities.

Our estimated annual losses from reimbursements to customers whose accounts have been negatively affected by unauthorized access have historically been less than [removed: $500,000] [added: $ 500,000] annually and were significantly reduced since the widespread introduction of our Secure Login System.

[removed: In our electronic brokerage business, our] [added: Our] customer margin credit exposure is to a great extent mitigated by our policy of automatically evaluating each account throughout the trading day and closing out positions automatically for accounts that are found to be under\-margined.

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

Our revenues are dependent on the level of trading activity on securities and derivatives exchanges in the U.S. and [removed: abroad.][added: abroad, and on the general level of interest rates.]

In the past, our revenues and operating results have varied significantly from period to period primarily due to movements and trends in the underlying markets and to fluctuations in trading [added: and interest rate] levels.

From time to time, we [added: may] have large position concentrations in securities of a single issuer or issuers engaged in a specific industry or traded in a particular market.

basis to foreign or non\-depreciable fixed assets, the impact of the increase in the tax basis on our ability to use foreign tax credits and the rules relating to the amortization of intangible assets, for example.

A substantial portion of our employees were impacted by local COVID-19 restrictions.

After such restrictions were lifted, we reopened our offices to all employees and adopted a hybrid work model for our offices globally.

As a result, any disruption to our

We are exposed to the risk of loss if a customer, counterparty or issuer fails to perform its obligations under contractual terms.

Our counterparty risk is primarily from margin loans extended to customers, securities purchased under agreements to resell (“repos”), securities borrowing and lending arrangements, cash and/or collateral deposited with clearing houses, exchanges, banks, securities firms and other financial counterparties, all of which may result in credit exposure in the event the counterparty defaults on their obligations to us due to bankruptcy, lack of liquidity, operational failure or other reasons.

Repos are collateralized by securities with a market value in excess of the obligation under the contract and are cleared and marked to market through a central clearing counterparty.

Securities lending agreements are collateralized by deposits of cash or securities.

We attempt to minimize credit risk associated with these activities by monitoring collateral values daily and requiring additional collateral to be deposited with or returned to us as permitted under contractual provisions.

Similarly, over-the-counter transactions, such as contracts for differences (“CFDs”), are marked to market daily and are conducted with counterparties that have undergone a thorough credit review.

Any loss or expense incurred due to defaults by our counterparties in failing to fulfill their contractual obligations would cause harm to our business, financial condition and results of operations.

In addition, as a clearing member of several central clearing houses, we participate in the mutualization of risk and could incur financial losses in the event of default by other clearing members.

Although we regularly review our credit exposures, default risk may arise from events or circumstances that are difficult to detect or foresee.

‎

A loss event incurred by the CSP may adversely impact our operating results.

In March 2022, the SEC published Staff Accounting Bulletin No. 121 (“SAB 121”), which provides interpretive accounting and disclosure guidance to entities that have obligations to safeguard crypto-assets held for their platform users, whether directly or through an agent or another third party acting on its behalf.

SAB 121 requires an entity to recognize a liability to reflect its obligation to safeguard the crypto-assets held for its platform users and a corresponding safeguarding asset on its balance sheet, even when the entity does not control the crypto-assets.

We operate a trading platform that allows our customers to access a digital asset exchange and custody services provided by a third-party CSP to buy, sell and hold crypto-assets in an account in the customer’s name at the CSP.

We do not provide execution, custody or safeguarding services for the customers’ crypto-assets and do not maintain (or have access to) the cryptographic key information and wallets necessary to access the crypto-assets, nor do we have any legal title or claim to those crypto-assets.

The CSP is responsible for securing the customers’ crypto-assets and protecting them from loss or theft.

The agreement the customer signs with IB LLC before the customer is permitted to access the CSP’s services through IB LLC’s platform provides that:

\[Customer\] acknowledges and agrees that \[IB LLC\] is not responsible for any trading or other losses (including, without limitation, losses due to theft, fraud, cybersecurity breach, loss of control of private keys, or any other loss arising from trading or holding digital assets with \[the CSP\]) resulting directly or indirectly from or in connection with \[Customer’s\] relationship with \[the CSP\] and/or \[Customer’s\] trading or holding of digital assets, including activity or holdings in the \[CSP\] Account.

Even though the Company is not responsible for the custody or safeguarding of crypto-assets, the Company is deemed to be in scope of SAB 121.

Pursuant to SAB 121, we measure the crypto-asset safeguarding liability and the corresponding safeguarding asset at the fair value of the crypto-assets held by the CSP for our customers.

Because, under the guidance, the measurement of the safeguarding asset shall take into account any potential loss events, if the CSP were to suffer a loss event that impacted our customers’ crypto-assets held by the CSP, then (subject to consultation with the SEC’s Office of the Chief Accountant) we may be required to recognize a reduction in the value of the safeguarding asset at the time of the CSP’s loss event, without recognizing a corresponding reduction in the value of the safeguarding liability, even though we have no legal obligation to our customers with respect to the crypto-assets held by the CSP.

The recognition of such loss event could have a material adverse effect on our results of operations.

Assuming no anti\-dilution adjustments based on combinations or

A substantial portion of our employees have been impacted by local COVID-19 restrictions and continue to work remotely on a part-time basis.

We specialize in routing orders and executing and processing trades in stocks, options, futures, forex, bonds, mutual funds, [removed: ETFs, metals] [added: ETFs] and [removed: cryptocurrencies] [added: precious metals] on more than 150 electronic exchanges and market centers in 33 countries and [removed: 25] [added: 26] currencies seamlessly around the world.

Our customer base is diverse with respect to geography and [removed: segments.][added: type.]

Currently, approximately [removed: 77%] [added: 79%] of our customers reside outside the U.S. in over 200 countries and territories, and over 50% of new customers come from outside the U.S. Approximately [removed: 62%] [added: 59%] of our customers’ equity is in institutional accounts such as hedge funds, financial advisors, proprietary trading desks and introducing brokers.

*Global trading volumes.* According to industry data, [added: in 2022] average daily volume in U.S. exchange\-listed equity\-based options increased by [removed: 34%,] [added: 5%,] U.S. futures by [removed: 3%,] [added: 19%] and [removed: in] U.S. listed cash equities volume by [removed: 5%.][added: 4%, over the prior year.]

*Volatility.* U.S. market volatility, as measured by the average Chicago Board Options Exchange Volatility Index (“VIX®”), [removed: fell markedly] [added: rose 32%,] from [removed: 29] [added: an average of 19.7] in [removed: 2020] [added: 2021] to [removed: 20] [added: 26.0] in [removed: 2021.][added: 2022.]

In general, higher volatility improves our performance because it [added: often] correlates [added: positively] with customer trading activity across product types.

Various market cross-currents led to mixed results across our major product types: customer [removed: options] [added: options, futures] and [removed: stock] [added: foreign exchange] volumes were up [removed: 46%] [added: 3%, 33%] and [removed: 131%,] [added: 18%,] respectively, while [removed: futures and foreign exchange] [added: stock] volumes declined [removed: 7% and 30%, respectively,] [added: 58%] compared to [removed: 2020.][added: 2021.]

[removed: Low] [added: Higher U.S.] benchmark rates [removed: also reduce] [added: have boosted] the interest we earn on our segregated cash, the majority of which is invested in U.S. government securities and related instruments.

Further, our margin balances are tied to benchmark rates, [removed: with a minimum charge of 0.75% in U.S. dollars,] so [removed: low interest] [added: rising] rates [removed: limit] [added: have also improved] the interest we [removed: receive] [added: earn] on margin lending to our customers.

We continue to offer among the lowest rates in the industry on margin lending, and we believe our low rates are an important [removed: factor] [added: feature] that attracts customers to our platform.

[removed: As an offset, lower] [added: Increasing] rates also [removed: reduce] [added: increase] our interest expense.

For example, in U.S. dollars we pay interest to customers [removed: only] when the federal funds effective rate is above 0.50%, [removed: and in currencies with negative rates we collect interest on a portion of customer cash balances.][added: which it has been since May 2022.]

Net interest income [added: on customer cash and margin loan balances] increased [added: significantly] compared to [removed: 2020 while] the [added: prior year as the] average federal funds effective rate [removed: decreased] [added: increased] to [removed: 0.08%] [added: 1.68%] in [removed: 2021] [added: 2022] from [removed: 0.38%] [added: 0.08%] in [removed: 2020.][added: 2021.]

[removed: The] [added: During an extended period prior to 2022, the] interest we [removed: pay] [added: paid] on customer cash balances and [removed: earn] [added: earned] on customer margin loans and investment of customer segregated funds [removed: results] [added: resulted] in spreads that [removed: are] [added: were] compressed at low benchmark rates.

We actively manage this exposure by keeping our [removed: net worth] [added: equity] in proportion to a defined basket of 10 currencies we call the “GLOBAL” to diversify our risk and to align our hedging strategy with the currencies that we use in our business.

[removed: During 2021] [added: In 2022,] the value of the GLOBAL, as measured in U.S. dollars, decreased [removed: 1.31%] [added: 1.85%] compared to its value at December 31, [removed: 2020,] [added: 2021,] which had a negative impact on our comprehensive earnings for the [added: current] year.

A discussion of our approach for managing foreign currency exposure is contained in Part I, Item 7A of this Quarterly Report on Form 10\-Q entitled “Quantitative and Qualitative Disclosures about Market [removed: Risk.][added: Risk.”]

We report non-GAAP financial measures, which exclude certain items that may not be indicative of our core operating results and business outlook and [removed: may be] [added: are] useful in evaluating the operating performance of our [removed: business and provide a better comparison of our results in the current period to those in prior and future periods.][added: business.]

Diluted earnings per share were [removed: $3.24] [added: $3.75] for the year ended December 31, [removed: 2021] [added: 2022] (“current year”), compared to [removed: $2.42] [added: $3.24] for the year ended December 31, [removed: 2020] [added: 2021] (“prior year”).

Adjusted diluted earnings per share were [removed: $3.37] [added: $4.05] for the current year, compared to [removed: $2.49] [added: $3.37] for the prior year.

For the current year, our net revenues were [removed: $2,714] [added: $3,067] million and income before income taxes was [removed: $1,787] [added: $1,998] million, compared to net revenues of [removed: $2,218] [added: $2,714] million and income before income taxes of [removed: $1,256] [added: $1,787] million in the prior year.

Adjusted net revenues were [removed: $2,780] [added: $3,213] million and adjusted income before income taxes was [removed: $1,853] [added: $2,144] million, compared to adjusted net revenues of [removed: $2,204] [added: $2,780] million and adjusted income before income taxes of [removed: $1,346] [added: $1,853] million in the prior year.

Commission revenue [removed: increased $238 million, or 21%,] [added: decreased 2%] from the prior year [added: to $1,322 million] on [removed: higher] [added: lower] customer [removed: options and] stock trading [added: volumes, partially offset by higher futures and options] volumes.

Other income decreased [removed: $61] [added: $105] million from the prior year.

This decrease was mainly comprised of (1) [removed: $75] [added: $63] million related to our [removed: strategic investment in Up Fintech Holding Limited (“Tiger Brokers”)] [added: currency diversification strategy] and (2) [removed: $18] [added: $39] million related to our [removed: currency diversification strategy;] [added: U.S. government securities portfolio;] partially offset by (3) [removed: the non-recurrence of] a [removed: $13] [added: $16] million [removed: impairment loss on] [added: gain related to] our [added: strategic] investment in [removed: OneChicago Exchange in the prior year.][added: Up Fintech Holding Limited (“Tiger Brokers”).]

Pretax profit margin was [removed: 66%, up] [added: 65%, down] from [removed: 57%] [added: 66%] in the prior year.

Adjusted pretax profit margin was [removed: 67%, up from 61% in the prior year.][added: 67% for both years.]

In connection with our currency diversification strategy as of December 31, [removed: 2021,] [added: 2022,] approximately [removed: 26%] [added: 24%] of our equity was denominated in currencies other than the U.S. dollar.

In the current year, our currency diversification strategy decreased our comprehensive earnings by [removed: $134] [added: $211] million (compared to [removed: an increase] [added: a decrease] of [removed: $105] [added: $134] million in the prior year), as the U.S. dollar value of the GLOBAL decreased by approximately [removed: 1.31%,] [added: 1.85%,] compared to its value as of December 31, [removed: 2020.][added: 2021.]

The effects of our currency diversification strategy are reported as (1) a component of other income (loss of [removed: $37] [added: $100] million) in the consolidated statements of comprehensive income and (2) other comprehensive income (“OCI”) (loss of [removed: $97] [added: $111] million) in the consolidated statements of financial condition and the consolidated statements of comprehensive income.

The COVID-19 pandemic [removed: has] precipitated unprecedented market conditions with equally unprecedented social and community challenges.

The impact of the COVID-19 [removed: pandemic] [added: or another public health emergency] going forward will depend on numerous evolving factors that cannot be accurately predicted, including the duration and spread of the pandemic, governmental regulations in response to the pandemic, and the effectiveness of vaccinations and other medical advancements.

| 2018 | | 328,099 | | [removed: 24%] | | 21,880 | | [removed: 47%] | | 18,663 | | [removed: (40%)] | | 368,642 | | [removed: 18%] | | 1,478 |

| 2018 | | 408,406 | | [removed: 3%] | | 151,762 | | [removed: 22%] | | 210,257,186 | | [removed: (5%)] |

| 2018 | | 358,852 | | [removed: 22%] | | 148,485 | | [removed: 25%] | | 198,909,375 | | [removed: (7%)] |

| 2018 | | 313,795 | | [removed: 24%] | | 146,806 | | [removed: 26%] | | 194,012,882 | | [removed: (7%)] |

| 2018 | | 49,554 | | [removed: (51%)] | | 3,277 | | [removed: (42%)] | | 11,347,811 | | [removed: 59%] |

| | | [removed: 2021] [added: 2022] | | | [removed: 2020] [added: 2021] | | | [removed: % Change] [added: 2020] | [added: |]

| Total Accounts (in thousands) | | | [removed: 1,676] [added: 2,091] | | | [removed: 1,073] [added: 1,676] | | [removed: 56%] [added: 25%] |

| Customer Equity (in billions) (1) | | $ | [removed: 373.8] [added: 306.7] | | $ | [removed: 288.6] [added: 373.8] | | [removed: 30%] [added: (18%)] |

In addition, our customers can use our trading platform to trade certain cryptocurrencies through a third-party cryptocurrency service provider that executes, clears and custodies the cryptocurrencies.

Equities markets around the world were predominantly down in 2022, with major equity market indices in the U.S., Europe and Asia falling by double digits.

This declining market backdrop occurred in the face of inflation, rising interest rates worldwide, fears of recession and unpredictable geopolitical uncertainty.

Individual investors, who had helped drive equities markets higher in the prior year, were less engaged with them as economic conditions weakened in 2022.

Volumes rose in financial futures, particularly foreign exchange and equity index futures, as higher inflation, a stronger U.S. dollar and investors looking to benefit from rising volatility drove this increase during the period.

While stock trading volumes remain significantly higher than pre-pandemic levels, in 2022 they were below the unusually high levels of stock trading seen in 2021, a period dominated by trading in “meme” stocks and low-priced stocks generally.

Volatility increased as numerous cross-currents, from inflationary pressures, changing central interest rate policies, unpredictable world economies and geopolitical uncertainty, impacted markets worldwide.

In 2022, higher options and futures volumes in a period of elevated volatility demonstrated the continuing benefit of more participants in the financial markets and their increasing comfort with these exchange-listed derivative products, which can be used to manage risk amid heightened and ongoing geopolitical and interest rate uncertainty.

*Interest Rates.* In 2022, interest rates rose in a steady series of increases from the zero to 0.25% range that had been targeted for two years prior to March 2022.

Over the course of 2022, the U.S. Federal Reserve increased the federal funds rate seven times, ending 2022 with a target range of 4.25% to 4.50%.

By year end, the U.S. Treasury yield curve became inverted, with long-term rates markedly lower than short-term rates.

In nearly every country, interest rates also rose in 2022 as central banks sought to control inflationary pressures.

The environment of uncertainty over future U.S. Federal Reserve rate policy has led us to maintain a short duration investment profile, so that additional rate increases present more opportunities for interest-sensitive assets.

Central banks in many other countries have also increased their interest rates in recent months.

We believe the attractive rates we pay on customer cash are another important feature that draws customers to our platform.

Benchmark interest rates over 50 basis points eliminate this spread compression and lead to higher net interest income.

Higher interest rates contributed to a 45% rise in net interest income over the prior year.

Combined with increases in average interest-earning assets, particularly in segregated cash balances, these higher rates led to a widening of our net interest margin from 1.17% in 2021 to 1.53% in 2022.

Net interest income increased 45% from the prior year to $1,668 million, driven by higher benchmark interest rates and customer credit balances, despite a decline in margin lending balances.

Additionally, although our direct and indirect exposures to Russia and Ukraine are not material, the war in Ukraine and related sanctions have created substantial uncertainty in the global economy and financial markets.

We continue to monitor the war and assess any potential impact to our business, including effects relating to currency control restrictions imposed by the Central Bank of Russia and restrictions by the Moscow Stock Exchange regarding the sale of assets by non-Russian residents.

| 2022 | | 735,619 | | (16%) | | 70,049 | | \-11% | | 32,863 | | 1% | | 838,531 | | (15%) | | 3,347 |

| 2022 | | 908,415 | | 2% | | 207,138 | | 34% | | 330,035,586 | | (57%) |

| 2022 | | 873,914 | | 3% | | 203,933 | | 33% | | 325,368,714 | | (58%) |

| 2022 | | 781,373 | | 1% | | 202,145 | | 33% | | 314,462,672 | | (58%) |

| 2022 | | 34,501 | | (3%) | | 3,205 | | 54% | | 4,666,872 | | (8%) |

| Year over Year | | 2022 | | | 2021 | | | % Change |

| Net income available for common stockholders | | $ | 380 | | $ | 308 | | $ | 195 |

Instead of commission revenue, IBKR LiteSM trades generate payments from market makers and others to whom we route these orders, which are reported in commissions.

Securities lending opportunities maintained a strong pace during the current year, despite fewer opportunities than the prior year.

However, the rise in benchmark interest rates rise has shifted the interest reported as generated by lending securities to interest income on segregated cash (see further explanation below).

Securities lending generates (1) net interest earned on lending a security, which is based on supply and demand for that security, and (2) interest earned on the cash collateral deposited for the loan of that security, which is based on benchmark interest rates.

Generally, as benchmark interest rates rise, an increasing portion of the interest earned on securities lending transactions is classified as net interest income on “Segregated cash and securities, net” instead of net interest income on “Securities borrowed and loaned, net”.

| IBG, Inc. stand-alone income before income taxes | | 4 | | | \- | | | (3) | |

We define adjusted diluted EPS as adjusted net income available for common stockholders divided by the diluted weighted average number of shares outstanding for the period.

| | | 2022 | | | 2021 | | | 2020 | |

| | | 2022 | | | 2021 | | | 2020 | |

| Currency diversification strategy, net | | | 100 | | | 37 | | | 19 |

| Remeasurement of TRA liability | | | (6) | | | (1) | | | 3 |

| | | 2022 | | | 2021 | | | 2020 | |

In 2021, world equities markets ended the year mixed.

While the U.S., the United Kingdom, Europe and Australia saw double-digit gains in their major equity market indexes, Asian markets either experienced small gains or fell.

Despite this varied backdrop, there continues to be worldwide interest in the financial markets.

Growing numbers of individuals, especially those newly attracted to investing, turned to the markets with increased awareness, due to the interconnectedness of investors to each other and to the markets, as they sought to earn higher yields on their assets in zero and negative-interest rate environments.

These increases followed a very active 2020.

Volumes were impacted positively by large numbers of investors, particularly individuals, participating in securities markets throughout the year.

Market volatility decreased moderately over the course of 2021, while average volatility for the year was down substantially from a highly volatile, pandemic-impacted 2020.

Despite lower volatility, higher equities, futures and options volumes demonstrated the continuing impact of more participants in the financial markets and their increasing comfort with taking part in the investment arena.

While last year’s unusual COVID-19 pandemic-induced spike in market volatility to over 30 has moderated, it remains elevated compared to pre-pandemic levels.

Trading was active as investors continued to capitalize on the opportunities to participate in the markets, seeking higher yields on their investments in the zero or negative interest rate environments that existed globally in 2021.

These trends led to an influx of new accounts and increases in trading volume, particularly in equities.

*Interest Rates.* The U.S. Federal Reserve’s target federal funds rate range in the current quarter remained at zero to 0.25%, similar to rates in many other currencies, with the exception of those where rates are negative.

U.S. rates also continued to exhibit a relatively flat yield curve.

Both of these factors present us with fewer investment opportunities for interest-sensitive assets, and can lead to a narrower net interest margin.

As an indirect positive effect, we believe low and negative benchmark world interest rates have been a factor leading to the active trading we have experienced, as investors enter securities markets to achieve higher yields on their investments.

Rising balances and a minimum margin loan interest rate have partially compensated for this reduction in net interest income.

Despite flat benchmark rates in 2021, a 58% increase in our average margin loan balances contributed to a 41% rise in margin loan interest over 2020.

Further, a strong inflow of new accounts drove average customer credit balances up 17% for the year.

Fueled by higher average balances and strong securities lending results, our net interest income grew 32% over 2020, and our overall net interest margin increased from 1.07% to 1.17%.

Net interest income increased $276 million, or 32%, on strong securities lending activity and higher margin loan balances.

| 2017 | | 265,501 | | | | 14,835 | | | | 31,282 | | | | 311,618 | | | | 1,246 |

| | | | | | | | | | | | | |

| 2017 | | 395,885 | | | | 124,123 | | | | 220,247,921 | | |

| 2017 | | 293,860 | | | | 118,427 | | | | 213,108,299 | | |

| 2017 | | 253,304 | | | | 116,858 | | | | 209,435,662 | | |

| 2017 | | 102,025 | | | | 5,696 | | | | 7,139,622 | | |

Removing the effect of trading in low-priced stocks, the stock share volume rose 41%.

Outside the U.S., notably in Europe, despite the proportionately higher growth in foreign currency cash balances, negative benchmark interest rates in some currencies have affected our ability to achieve positive yields on our segregated cash in this region.

resell), customer margin loans, securities borrowed, other interest-earning assets (solely firm assets) and customer cash balances swept into FDIC-insured banks as part of our Insured Bank Deposit Sweep Program.

Adjusted net revenues, adjusted income before income taxes, adjusted net income available for common stockholders, and adjusted EPS are non-GAAP financial measures as defined by SEC Regulation G.

For the year-ended December 31, 2019, unusual bad debt expense reflects losses recognized on margin lending to a small number of our brokerage customers that had taken relatively large positions in a security listed on a major U.S. exchange, which lost a substantial amount of its value in a very short timeframe.

In 2020 Timber Hill Canada Company paid a dividend of $76 million to IBG LLC as a result of its liquidation.

With the enactment of the U.S. Tax Cuts and Jobs

senior notes to be redeemed, plus accrued and unpaid interest.

During the year ended December 31, 2021 IBG LLC issued senior notes of $1,428 million and redeemed senior notes of $1,524 million, respectively.

The senior notes carried a weighted average interest rate of 1%.

As of December 31, 2021 and 2020, IBG LLC had $0 and $96 million of senior notes outstanding, respectively, all of which carried a 1% per annum interest rate, and are included in short-term borrowings in the consolidated statements of financial condition.

pre-tax operating income, the reversal of temporary differences, and the implementation of feasible and prudent tax\-planning strategies.

As a result of our international activities and accumulated earnings in our foreign subsidiaries, our income and [removed: net worth] [added: equity] are exposed to fluctuations in foreign exchange rates.

At the end of each accounting period, IBKRFS’ [removed: net worth] [added: equity] is translated at the then prevailing exchange rate into U.S. dollars and the resulting translation gain or loss is reported as OCI in our consolidated statements of financial condition and consolidated statements of comprehensive income.

In connection with the development of our currency diversification strategy, we determined to base our [removed: net worth] [added: equity] in GLOBALs, a basket of currencies.

The U.S. dollar value of the GLOBAL decreased [removed: 1.31%] [added: 1.85%] as of December 31, [removed: 2021] [added: 2022] compared to December 31, [removed: 2020.][added: 2021.]

As of December 31, [removed: 2021,] [added: 2022,] approximately [removed: 26%] [added: 24%] of our equity was denominated in currencies other than the U.S. dollar.

| USD | | 0.72 | | 1.0000 | | | 0.720 | | [removed: 73.4%] [added: 74.4%] | | $ | [removed: 6,610] [added: 7,605] | | 1.0000 | | | 0.720 | | [removed: 74.4%] [added: 75.8%] | | $ | [removed: 7,605] [added: 8,803] | | [removed: 1.0%] [added: 1.4%] |

| GBP | | 0.02 | | [removed: 1.3666] [added: 1.3527] | | | 0.027 | | 2.8% | | | [removed: 251] [added: 286] | | [removed: 1.3527] [added: 1.2099] | | | [removed: 0.027] [added: 0.024] | | [removed: 2.8%] [added: 2.5%] | | | [removed: 286] [added: 296] | | [removed: 0.0%] [added: \-0.2%] |

| CHF | | 0.02 | | [removed: 1.1298] [added: 1.0963] | | | [removed: 0.023] [added: 0.022] | | 2.3% | | | [removed: 208] [added: 232] | | [removed: 1.0963] [added: 1.0816] | | | 0.022 | | 2.3% | | | [removed: 232] [added: 265] | | 0.0% |

| CNH | | 0.13 | | [removed: 0.1538] [added: 0.1572] | | | 0.020 | | [removed: 2.0%] [added: 2.1%] | | | [removed: 184] [added: 216] | | [removed: 0.1572] [added: 0.1445] | | | [removed: 0.020] [added: 0.019] | | [removed: 2.1%] [added: 2.0%] | | | [removed: 216] [added: 230] | | [removed: 0.1%] [added: \-0.1%] |

| INR | | 1.10 | | [removed: 0.0137] [added: 0.0134] | | | 0.015 | | 1.5% | | | [removed: 138] [added: 156] | | [removed: 0.0134] [added: 0.0121] | | | [removed: 0.015] [added: 0.013] | | [removed: 1.5%] [added: 1.4%] | | | [removed: 156] [added: 163] | | [removed: 0.0%] [added: \-0.1%] |

| CAD | | 0.02 | | [removed: 0.7853] [added: 0.7912] | | | 0.012 | | 1.2% | | | [removed: 108] [added: 125] | | [removed: 0.7912] [added: 0.7385] | | | [removed: 0.012] [added: 0.011] | | 1.2% | | | [removed: 125] [added: 135] | | [removed: 0.0%] [added: \-0.1%] |

| AUD | | 0.02 | | [removed: 0.7693] [added: 0.7266] | | | [removed: 0.012] [added: 0.011] | | [removed: 1.2%] [added: 1.1%] | | | [removed: 106] [added: 115] | | [removed: 0.7266] [added: 0.6816] | | | [removed: 0.011] [added: 0.010] | | 1.1% | | | [removed: 115] [added: 125] | | [removed: \-0.1%] [added: 0.0%] |

| HKD | | 0.04 | | [removed: 0.1290] [added: 0.1283] | | | [removed: 0.005] [added: 0.004] | | 0.5% | | | [removed: 41] [added: 47] | | [removed: 0.1283] [added: 0.1281] | | | 0.004 | | 0.5% | | | [removed: 47] [added: 55] | | 0.0% |

| | | | | | | | [removed: 0.981] [added: 0.968] | | 100.0% | | $ | [removed: 9,003] [added: 10,222] | | | | | [removed: 0.968] [added: 0.950] | | 100.0% | | $ | [removed: 10,222] [added: 11,615] | | 0.0% |

We had no variable\-rate debt outstanding as of December 31, [removed: 2021.][added: 2022.]

Our margin balances are priced to a benchmark rate plus a spread, with a minimum charge of 0.75% in U.S. [removed: dollars.][added: dollars and most foreign currencies.]

At negative or near-zero benchmark rates, our interest sensitivity to rate increases is limited to the extent that a higher benchmark rate [removed: plus a spread may still be below the minimum charge.]

Based on customer balances and investments outstanding as of December 31, [removed: 2021,] [added: 2022,] and assuming reinvestment of maturing instruments in instruments of short-term duration, an unexpected increase of 0.25% over current U.S. dollar interest rate levels would increase our net interest income by approximately [removed: $165] [added: $49] million [removed: both over the first year and] on an annualized basis, assuming the full effect of reinvestment at higher rates.

We also face the potential for reduced net interest income from customer deposits [removed: due] [added: and margin loans if benchmark rates were] to [removed: interest rate spread compression in a low rate environment.][added: fall.]

Based on customer balances and investments outstanding as of December 31, [removed: 2021,] [added: 2022,] and assuming reinvestment of maturing instruments in instruments of short-term duration, an unexpected decrease in U.S. dollar interest rates of 0.25% would decrease our net interest income by approximately [removed: $28 million over the first year and $38] [added: $49] million on an annualized basis, assuming the full effect of reinvestment at lower rates.

The amount of such risk cannot be quantified, however, the [removed: reduction] [added: current low level] of market making positions [removed: has substantially reduced this] [added: does not indicate a material potential] exposure.

As of December 31, [removed: 2021,] [added: 2022,] we had [removed: $54.9] [added: $38.8] billion in margin loans extended to our customers.

For corporate bonds, this stress test is configured to calculate the change in value of each fixed income security in the portfolio over one day in [removed: seven] [added: five] scenarios each of which represents a parallel shift of the U.S. Treasury yield curve.

The scenarios are shifts of [removed: +/−100, +/−200,] [added: +/−100] and [removed: +/−300] [added: +/−200] basis points.

The scenarios are shifts of [removed: +/−25] [added: +/−50] basis points.

| | | [removed: |] At December 31, | | | At December 31, | | | Average | | | High | [added: |]

| Market Risk Category | | [added: 2022] | [removed: 2021] | | [added: 2021] | [removed: 2020] | | [added: 2022] | [removed: 2021] | | [added: 2022] | [removed: 2021] |

| Equities and Currencies (2) | | $ | 8 | | $ | [removed: 7] [added: 8] | | $ | [removed: 8] [added: 7] | | $ | [removed: 10] [added: 8] |

| Fixed [removed: Income (3)] [added: Income, Other (3), (4)] | | | [removed: 0] [added: 9] | | | [removed: 0] [added: 14] | | | [removed: 0] [added: 12] | | | [removed: 0] [added: 16] |

| Trading Total | | $ | 8 | | $ | [removed: 7] [added: 8] | | $ | [removed: 8] [added: 7] | | $ | [removed: 10] [added: 8] |

| Equities and Currencies | | $ | [removed: 18] [added: 26] | | $ | [removed: 20] [added: 18] | | $ | 20 | | $ | [removed: 59] [added: 26] |

| Non-Trading Total | | $ | [removed: 25] [added: 35] | | $ | [removed: 22] [added: 32] | | $ | [removed: 23] [added: 32] | | $ | [removed: 66] [added: 42] |

The average and high VaR amounts for equities and currencies are based on end of day calculations performed in [removed: 2021.][added: 2022.]

The fixed income stress amounts are based on the four quarter ending calculations performed in [removed: 2021.][added: 2022.]

[removed: (4)The] [added: (3)The] Non-Trading – Fixed Income, Other category contains primarily U.S. government securities held in segregated safekeeping accounts for the exclusive benefit of our brokerage customers, on which the risk is measured using a stress test analysis.

| | | | | As of 12/31/2021 | | | | | | | | | | As of 12/31/2022 | | | | | | | | | | |

| EUR | | 0.09 | | 1.1372 | | | 0.102 | | 10.6% | | | 1,081 | | 1.0704 | | | 0.096 | | 10.1% | | | 1,178 | | \-0.4% |

| JPY | | 3.91 | | 0.0087 | | | 0.034 | | 3.5% | | | 359 | | 0.0076 | | | 0.030 | | 3.1% | | | 365 | | \-0.4% |

plus a spread may still be below the minimum charge.

A 0.25% increase in all the relevant non-U.S. dollar benchmark rates would increase our net interest income by $25 million on an annualized basis.

A 0.25% decrease in all the relevant non-U.S. dollar benchmark rates would decrease our net interest income by $25 million on an annualized basis.

The amount of such risk cannot be quantified, however, the current low level of market making positions does not indicate a material potential exposure.

(4)As a result of the active rising interest rate environment, in 2022, we changed our methodology for risk computed under a stress test.

Prior period amounts have been updated to conform to the current period presentation.

| | | | | As of 12/31/2020 | | | | | | | | | | As of 12/31/2021 | | | | | | | | | | |

| EUR | | 0.09 | | 1.2216 | | | 0.110 | | 11.2% | | | 1,009 | | 1.1372 | | | 0.102 | | 10.6% | | | 1,081 | | \-0.6% |

| JPY | | 3.91 | | 0.0097 | | | 0.038 | | 3.9% | | | 348 | | 0.0087 | | | 0.034 | | 3.5% | | | 359 | | \-0.3% |

| Fixed Income, Other (4) | | | 7 | | | 2 | | | 3 | | | 7 |

(3)The Trading – Fixed Income category contains primarily foreign government securities held in connection with market making activities.

The risks on these products were managed separately and measured using the stress test analysis.

We specialize in routing orders [removed: while striving to achieve best executions] and [added: executing and] processing trades in stocks, options, futures, foreign exchange instruments (“forex”), bonds, mutual funds, [removed: ETFs, metals] [added: ETFs] and [removed: cryptocurrencies] [added: precious metals] on more than 150 electronic exchanges and market centers [added: in 33 countries and 26 currencies seamlessly] around the world.

Abroad, we conduct our business through offices located in Canada, the United Kingdom, Ireland, [removed: Luxembourg,] Switzerland, Hungary, India, China (Hong Kong and Shanghai), Japan, Singapore and Australia.

As of December 31, [removed: 2021,] [added: 2022,] we had [removed: 2,571] [added: 2,820] employees worldwide.

IBG, Inc. is a holding company whose primary asset is the ownership of approximately [removed: 23.5%] [added: 24.5%] of the membership interests of IBG LLC, the current holding company for our businesses.

When we use the terms “we,” “us,” [removed: and] “our,” [added: and “IBKR,”] we mean IBG, Inc. and its subsidiaries (including IBG LLC).

We [removed: are a successor] [added: trace our roots] to the market making business founded by our Chairman, Mr. Thomas Peterffy, on the floor of the American Stock Exchange in 1977.

The proliferation of electronic exchanges and market centers since the early 1990s has allowed us to integrate our software with an increasing number of trading venues, creating [removed: one] automatically functioning, computerized [removed: platform] [added: platforms] that [removed: requires] [added: require] minimal human intervention.

Over four decades of developing our automated trading platforms and automating many [removed: middle] [added: middle-] and [removed: back office] [added: back-office] functions have allowed us to become one of the lowest cost providers of broker\-dealer services and to significantly increase the volume of trades we handle.

Description automatically [removed: generated](https://www.sec.gov/Archives/edgar/data/1381197/000138119722000010/ibkr-20211231x10kg001.jpg)][added: generated](https://www.sec.gov/Archives/edgar/data/1381197/000138119723000014/ibkr-20221231x10kg001.jpg)]

Our primary assets are our ownership of approximately [removed: 23.5%] [added: 24.5%] of the membership interests of IBG LLC, the current holding company for our businesses, and our controlling interest and related contractual rights as the sole managing member of IBG LLC.

The remaining approximately [removed: 76.5%] [added: 75.5%] of IBG LLC membership interests are held by IBG Holdings LLC (“Holdings”), a holding company that is owned directly and indirectly by our founder and Chairman, Mr. Thomas Peterffy and his affiliates, management and other employees of IBG LLC, and certain other members.

The table below presents the amount of IBG LLC membership interests held by IBG, Inc. and Holdings as of December 31, [removed: 2021.][added: 2022.]

The Exchange Agreement, as amended June 6, 2012, provides that the Company may facilitate the redemption by Holdings of interests held by its members through the issuance of shares of common stock through a public offering [added: or directly to Holdings] in exchange for the interests in IBG LLC being [removed: redeemed] [added: sold] by Holdings.

From 2011 through [removed: 2021,] [added: 2022,] the Company issued [removed: 34,207,307] [added: 37,478,697] shares of common stock (with a fair value of [removed: $1,491 million)] [added: $1.7 billion)] to Holdings in exchange for an equivalent number of shares of member interests in IBG LLC.

Capitalizing on our proprietary technology, our systems provide our customers with the capability to monitor multiple markets around the world simultaneously and to execute trades electronically in these markets at a low cost in multiple products and currencies from a single [removed: trading account.][added: unified platform.]

We offer our customers access to all [added: tradable] classes of [removed: tradable,] primarily exchange\-listed products, including stocks, options, futures, forex, bonds, mutual funds, ETFs, [added: precious] metals and cryptocurrencies traded on more than 150 electronic exchanges and market centers in 33 countries and in [removed: 25] [added: 26] currencies seamlessly around the world.

Since the launching of our electronic brokerage business in 1993, we have grown to approximately [removed: 1.68] [added: 2.1] million institutional and individual brokerage customers.

As a result of our advanced electronic brokerage platform, we [removed: attract] [added: are especially attractive to] sophisticated and active investors.

No single customer represented more than [removed: 1.5%] [added: 1%] of our commissions in [removed: 2021.][added: 2022.]

IBKR ProSM offers the lowest cost access to stocks, options, futures, forex, bonds, mutual funds, ETFs, [added: precious] metals and cryptocurrencies from a single [removed: integrated] [added: unified] platform with no added spreads, ticket charges, account minimums or platform fees.

*IBKR LiteSM* provides unlimited commission-free trades on U.S. exchange-listed stocks and ETFs [removed: as well as] [added: and] low-cost access to global markets without required account minimums or platform fees to participating U.S. customers.

*IBKR [removed: Integrated Investment Account*] [added: Universal accountSM*] – From a single point of entry in [removed: one] [added: their] IBKR [removed: Integrated Investment Account] [added: Universal1 account*SM*,] our customers are able to transact in [removed: 25] [added: 26] currencies, across multiple classes of tradable, primarily exchange\-listed products traded on more than 150 electronic exchanges and market centers in 33 countries around the world seamlessly.

Customers can use their card to make purchases and ATM withdrawals anywhere Debit [removed: Mastercard®1] [added: Mastercard®2] or Prepaid [removed: Mastercard®1is] [added: Mastercard®2 are] accepted around the world.

[removed: 1] [added: 2] Debit Mastercard® and Prepaid Mastercard® are trademarks registered to Mastercard International Incorporated Corporation, Delaware, 2000 Purchase Street, Purchase, New York 10577-2405.

*Mutual Fund Marketplace –* The Mutual Fund Marketplace offers our customers access to more than 45,000 mutual funds worldwide, including more than [removed: 17,000] [added: 18,000] no-transaction-fee funds from [removed: over 480] [added: more than 540] fund families*.*

*Fractional Trading* – Fractional Trading allows customers to buy and sell [added: any eligible U.S. or European stock (or ETF, where available),] using either a specified cash amount or fractional shares, which are stock units that amount to less than one full share.

This functionality allows customers to [removed: purchase as little as $1.00 of almost any U.S. stock,] experiment with trading and investing without committing substantial sums of [removed: money,] [added: money] and learn about building and rebalancing diversified portfolios.

*Cryptocurrency* – Customers, including both individuals and advisors, can trade Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) and Bitcoin Cash (BCH) through Paxos Trust Company, [added: which executes, clears and custodies the cryptocurrencies,] alongside other asset classes on a single [removed: integrated] [added: unified] platform.

*U.S. Spot Gold* – Customers can trade U.S. Spot Gold alongside other asset classes from a single [removed: integrated account.][added: unified platform.]

*No Transaction Fee Program for Exchange*\-*Traded Funds* – We offer a [removed: "fee waived"] no transaction fee program for ETFs that reimburses IBKR ProSM customers and eligible non-U.S. customers for commissions paid on ETF shares held for at least 30 days.

We [removed: also] offer Transaction Cost Analysis reporting to allow customers to track execution performance using multiple criteria.

Our customers are alerted to approaching margin violations and if a customer’s equity falls below what is required to support that customer’s margin, we attempt to automatically liquidate positions [removed: on a real\-time basis] to bring the customer’s account into margin compliance.

When away from their main workstations, customers can [added: conveniently] access their accounts through our IBKR Mobile [removed: platforms for a seamless experience.][added: platforms.]

[removed: Our] [added: In addition, our] Stock Yield Enhancement Program allows our customers to lend their fully\-paid stock shares to us in exchange for cash or U.S. Treasury securities collateral.

IBKR Campus offers self-directed courses at the Traders’ [removed: Academy,] [added: Academy;] live and recorded [removed: webinars,] [added: webinars;] our Traders’ Insight market commentary [removed: blog,] [added: blog; IBKR Podcasts, a new podcast series that interviews thought leaders from across] the [added: financial industry; the] IBKR Quant [removed: Blog,] [added: Blog;] and our Student Trading Lab, [added: in] which [removed: lets] educators bring real-world trading experiences to their classroom.

The relative value of global stocks by region, country, industry or individually can be compared, and metrics displayed in one of [removed: 27] [added: 26] currencies.

The system [removed: can identify] [added: is capable of identifying] overexposure to risk by starting at the portfolio level and drilling down into successively greater detail within multiple report views.

*Socially Responsible Investing (SRI) Portfolios* – Interactive Advisors offers [removed: to] customers a selection of [removed: thirteen] value portfolios grouped into Better Planet, Social Justice and Responsible Management categories.

Customers can also customize any of their portfolios to exclude companies whose business practices [removed: concerns] [added: concern] them.

We also provide a real\-time option analytics window [removed: which] [added: that] displays values [removed: that reflect] [added: reflecting] the rate of change of an option’s price with respect to a unit change in each of several risk dimensions.

In addition, our customers can use our trading platform to trade certain cryptocurrencies through a third-party cryptocurrency service provider that executes, clears and custodies the cryptocurrencies.

| | Ownership % | 24.5% | | 75.5% | | 100.0% |

| | Membership interests | 102,927,703 | | 316,609,102 | | 419,536,805 |

The common stock received from the Company is either distributed by Holdings to certain members in redemption of their Holdings interests or sold on behalf of such members in open market transactions, with the proceeds of such sales distributed by Holdings to certain members in redemption of their Holdings interests.

Our customers can access IBKR’s premier technology through the following trading platforms:

*Trader WorkstationSM* *(TWS)* – The TWS is our flagship desktop trading platform, designed for active traders and investors who trade multiple products and require power and flexibility.

The TWS Mosaic interface provides intuitive out-of-the-box usability with quick and easy access to comprehensive trading, order management, chart, watchlist and portfolio tools all in a single, customizable workspace.

*IBKR Mobile* – The IBKR Mobile app provides powerful trading tools and the same market-moving information as our desktop TWS trading platform.

Our mobile app provides the functionality needed to trade and manage accounts from anywhere.

*Client Portal* – Client Portal is a streamlined web-based platform.

It gives the customer access to every resource they need to trade, monitor and manage their account.

*IBKR GlobalTrader* *–* IBKR GlobalTrader is a simple mobile trading app to trade stocks and options worldwide.

Customers can deposit in their local currency and trade stocks at 90+ exchanges and options at 30+ market centers around the world.

Customers can also trade select U.S. ETFs around the clock, plus cryptocurrencies like Bitcoin, Bitcoin Cash, Ethereum and Litecoin – all from their mobile device.

*IBKR APIs* – For our more sophisticated customers, IBKR APIs allows them to build custom trading applications and automate any part of the trading process to their specifications.

We offer APIs for every experience level from our easy-to-use Excel API to our institutional grade FIX API.

1 U.S. regulations require securities and commodities activities to be conducted in separate accounts.

Universal account refers to the consolidation of these accounts for display purposes only, enabling clients the ability to use a single platform to conduct trading activity and view consolidated activity and position information for all products and services offered.

With fractional shares, there is no minimum for European shares and customers can invest in U.S. shares with as little as $1.00.

*Event Contracts* – IBKR EventTraderSM is our web-based platform for trading event contracts on select CME futures markets.

IBKR EventTraderSM allows customers to trade their opinion about a specific question with a "yes" or "no" outcome.

*Overnight Trading Hours* – Customers can trade select U.S. ETFs 23½ hours a day, five days a week, enabling them to react immediately to market-moving news and conveniently trade at almost any time.

It also provides customers in Asia with access to the U.S. Equity markets during their trading day.

In addition, customers earn interest on their uninvested cash balances above $10,000 (or the equivalent in foreign currency).

*Carbon Offsets –* Using the IMPACT App, U.S. customers can offset their carbon emissions by purchasing carbon offsets and can use the Carbon Offsets tool to select from either greenhouse-gas emitting activities related to household, transportation and food, or enter a specific amount of carbon to offset.

We source and retire the carbon credits at the appropriate registries enabling customers to fully or partially offset their carbon footprints.

In addition, our risk management staff uses these displays to monitor the

We manage the operational risk inherent in our business and limit potential exposure to operational incidents by maintaining robust and comprehensive controls.

Our control environment is designed to ensure that services and controls are resilient during periods of operational stress (e.g., extreme market volatility) and business disruptions.

These controls are periodically assessed for both design appropriateness and operating effectiveness by our Enterprise Risk Management and Internal Audit functions.

In addition, an Independent Service Auditor annually examines our brokerage operations system and the suitability of the design and operating effectiveness of the related controls (System and Organizational Controls 1 Report).

Our customers primarily fall into two groups based on services provided, both of which take advantage of our low commissions as well as our best price execution.

Non-cleared customers use our trade execution services while choosing to clear with another prime broker or a custodian bank.

We offer competitive compensation and comprehensive benefit programs that aim to meet the needs of our employees.

In response to the residual effects of the pandemic, we piloted new programs to support the well-being of our staff.

These programs include a mental health program operated by an external specialist and a new communication and engagement platform with digital communities to support the external activities of interest to our staff.

In 2022, we rolled out a global mentorship program and more than 120 mentors joined to provide peer-to-peer career support.

We continue to solicit employee feedback on our programs through engagement surveys that help us refine our program initiatives.

We continue to partner with Fidelity’s Workplace Giving platform to allow our employees to support the local causes and community efforts that are most important to them.

We have donated funds globally to support community efforts in alleviating poverty, disaster relief, education and medical research, among other causes.

| | Ownership % | 23.5% | | 76.5% | | 100.0% |

| | Membership interests | 98,230,127 | | 319,880,492 | | 418,110,619 |

Periodically since June 2011, with the consent of Holdings and the Company (on its own behalf and acting as the sole managing member of IBG LLC), IBG LLC has agreed to redeem certain membership interests from Holdings through the sale of common stock and to distribute the proceeds of such sale to the beneficial owners of such membership interests.

To highlight the quality of our price executions, we publish on our website independent measurements performed by a third-party provider of transaction analysis to illustrate our net price improvement for commissionable trades versus the industry.

Interactive Advisors also offers an additional four portfolios grouped under the Smart Beta ESG category.

Our customers primarily fall into two groups based on services provided: cleared customers which are the majority of our customers and non-cleared customers, the latter also known as trade execution customers.

Our cleared customers include institutional and individual traders and investors, hedge funds, financial advisors and introducing brokers.

Trade Execution Customers: We offer trade execution for customers who choose to clear with another prime broker or a custodian bank; these customers take advantage of our low commissions for trade execution as well as our best price execution.

Our non\-cleared customers include online brokers and the customer trading units of commercial banks.

These customers are attracted by our IB SmartRoutingSM technology as well as our direct access to stock, options, futures, forex, bond, mutual fund and ETF markets worldwide.

We offer a comprehensive benefits program, including stock incentives, to all of our employees and design our compensation programs to attract, retain and motivate employees.

We believe that our relations with our employees are good.

Our employees are not covered by any collective bargaining agreements.

We take pride in our technology\-focused company culture and embrace it as one of our fundamental strengths.

We continually improve our technology and we minimize corporate hierarchy to facilitate efficient communication among employees.

We have assembled what we believe is a highly talented team and we expect to continue to provide significant rewards for our employees who provide substantial value to us and the world’s financial markets.

The Company’s Environmental, Social and Governance (“ESG”) Committee, established in early 2020, is responsible for advising on the Company’s ESG strategy, including recommendations on the development of new products and services for our customers, tracking ESG initiatives throughout the Company, and providing training to the Company’s Board of Directors and employees on ESG topics.

Using these offerings, our customers can view their investments not just through a financial lens, but also through ESG and “impact” lenses.

We have also been enhancing benefits related to childbearing and adoption for all employees.

For example, we donated more than $5 million to assist efforts to provide food and support for people affected by the coronavirus as well as to advance medical solutions.

D&I is an integral part of our ESG initiatives.

Our recruiting process is an essential part of our D&I initiatives.

We broadened the use of specialty recruitment platforms that include female, veteran, and minority-focused candidate pools.

We also redesigned our job postings with a view to promoting and attracting a more diverse workforce.

We added diversity to our Board of Directors by appointing a director who is not only the Board’s first female director but also its first Asian member.

We have plans underway to continue broadening the composition and perspective of our Board of Directors.

We have taken steps to reduce our global carbon footprint and implement sustainable practices that protect the climate, such as transitioning office materials and supplies to focus on products that can be disposed of sustainably and to reduce waste management.

Many of our office locations have adopted recycling programs, which we promote through recycling campaigns with mindful tips for our employees to reduce waste and consumption of water and electricity.

We also collect direct and indirect carbon production data for our offices around the world to measure our carbon footprint.

We have begun our carbon offsetting initiatives through the purchase of Renewable Energy Certificates (“REC”) and making investments in renewable energy projects.

All our data centers worldwide use green power provided directly through the local utility or maintain RECs to ensure a carbon-neutral footprint.

| IB LLC | | $ | 5,581 | | $ | 1,001 | | $ | 4,580 |

| IBKRFS | | | 598 | | | 12 | | | 586 |

| IBHK | | | 860 | | | 278 | | | 582 |

| | | $ | 8,592 | | $ | 1,567 | | $ | 7,025 |

Our anti\-money laundering screening is conducted using a mix of automated and

| John M. Damgard | 82 | | Director |

*John M.

Damgard –* Mr. Damgard has been a director since December 2018.

Mr. Damgard served as President of the Futures Industry Association (“FIA”) from 1982 to 2013 and was a founder, past president and a member of the board of the Institute for Financial Markets.

Most of our companies are regulated under some or all of the following: state securities laws, U.S. and foreign securities, commodities and financial services laws and the rules of the more than [removed: 120] [added: 150] exchanges, market centers and self\-regulatory organizations of which one or more of our companies may be members.

For the year ended December 31, [removed: 2021][added: 2022]

The aggregate market value of the voting and non\-voting common equity stock held by non\-affiliates of the registrant was approximately [removed: $5,475,738,797] [added: $5,264,574,692] computed by reference to the [removed: $65.73] [added: $55.01] closing sale price of the common stock on the Nasdaq Global Select Market, on June 30, [removed: 2021,] [added: 2022,] the last business day of the registrant’s most recently completed second fiscal quarter.

As of February [removed: 22, 2022,] [added: 21, 2023,] there were [removed: 98,227,883] [added: 102,996,853] shares of the issuer’s Class A common stock, par value $0.01 per share, outstanding and 100 shares of the issuer’s Class B common stock, par value $0.01 per share, outstanding.

Documents Incorporated by Reference: Portions of Registrant’s definitive proxy statement for its [removed: 2022] [added: 2023] annual meeting of shareholders are incorporated by reference in Part III of this Form 10\-K.

ANNUAL REPORT ON FORM 10\-K FOR THE YEAR ENDED DECEMBER 31, [removed: 2021][added: 2022]

| ITEM 1A | | [Risk Factors](#RiskFactors) | [removed: 18] [added: 19] |

| ITEM 1B | | [Unresolved Staff Comments](#UnresolvedStaffComments) | [removed: 27] [added: 29] |

| ITEM 2 | | [Properties](#Properties) | [removed: 28] [added: 30] |

| ITEM 3 | | [Legal Proceedings and Regulatory Matters](#LegalProceedings) | [removed: 29] [added: 31] |

| ITEM 4 | | [Mine Safety Disclosures](#MineSafety) | [removed: 29] [added: 31] |

| ITEM 5 | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](#MarketForCommonEquity) | [removed: 30] [added: 32] |

| ITEM 7 | | [Management’s Discussion and Analysis of Financial Condition and Results of Operations](#MDA) | [removed: 32] [added: 34] |

| ITEM 7A | | [Quantitative and Qualitative Disclosures about Market Risk](#MarketRisk) | [removed: 52] [added: 54] |

| ITEM 8 | | [Financial Statements and Supplementary Data](#FinancialStatements) | [removed: 57] [added: 59] |

| ITEM 9 | | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](#ChangesAndDisagreements) | [removed: 97] [added: 100] |

| ITEM 9A | | [Controls and Procedures](#ControlsAndProcedures) | [removed: 97] [added: 100] |

| ITEM 9B | | [Other Information](#Other_Information) | [removed: 99] [added: 102] |

| ITEM 10 | | [Directors, Executive Officers and Corporate Governance](#DirectorsOfficers) | [removed: 99] [added: 102] |

| ITEM 11 | | [Executive Compensation](#ExecutiveCompensation) | [removed: 99] [added: 102] |

| ITEM 12 | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](#BeneficialOwners) | [removed: 99] [added: 102] |

| ITEM 13 | | [Transactions with Related Persons, Promoters and Certain Control Persons](#TransactionsRelatedPersons) | [removed: 99] [added: 102] |

| ITEM 14 | | [Principal Accountant Fees and Services](#AccountantFees) | [removed: 99] [added: 102] |

| ITEM 15 | | [Exhibits and Financial Statement Schedules](#Exhibits) | [removed: 101] [added: 104] |

| ITEMS 15 (a)(1) and 15 (a)(2) | | [Index to Financial Statements and Financial Statement Schedule](#Index) | [removed: 102] [added: 105] |

| ITEM 16 | | [10-K Summary](#Summary_10K) | [removed: 102] [added: 105] |

the impact of the Coronavirus Disease 2019 (“COVID-19”) pandemic [removed: and the measures implemented to contain the spread of the virus;] [added: or another public health emergency;] and

We lease office and data center facilities in [removed: 24] [added: 27] cities throughout the world where we conduct our operations as set forth below.

The table below presents certain information with respect to our leased facilities as of December 31, [removed: 2021.][added: 2022.]

| | Chicago, IL | [removed: 61,061] [added: 100,871] | | Office space and data center | | |

| | Other (9 locations) | [removed: 45,602] [added: 39,262] | | Office space and data center | | |

| | Zug, Switzerland | [removed: 25,009] [added: 39,240] | | Office space and data center | | |

| | Budapest, Hungary | [removed: 22,402] [added: 36,202] | | Office space | | |

| | Other [removed: (3] [added: (2] locations) | [removed: 14,595] [added: 10,610] | | Office space | | |

| | Hong Kong | [removed: 21,776] [added: 26,020] | | Office space and data center | | |

| | Other [removed: (4] [added: (6] locations) | [removed: 18,969] [added: 18,974] | | Office space | | |

| | New York, NY | 16,940 | | Office space | | |

| | Dublin, Ireland | 17,982 | | Office space | | |

As of February [removed: 18, 2022,] [added: 16, 2023,] there were [removed: 24] [added: 26] holders of record, which does not reflect those shares held beneficially or those shares held in “street” name.

The graph below compares cumulative total stockholder return on our common stock, the S&P 500 Index and the Nasdaq Financial\-100 Index from December 31, [removed: 2016] [added: 2017] to December 31, [removed: 2021.][added: 2022.]

The comparison assumes $100 was invested on December 31, [removed: 2015] [added: 2017] in our common stock and each of the foregoing indices and assumes reinvestment of dividends before consideration of income taxes.

Description automatically [removed: generated](https://www.sec.gov/Archives/edgar/data/1381197/000138119722000010/ibkr-20211231x10kg002.jpg)][added: generated](https://www.sec.gov/Archives/edgar/data/1381197/000138119723000014/ibkr-20221231x10kg002.jpg)]

From 2019 through [removed: 2021,] [added: 2022,] the Company issued [removed: 170,000] [added: 320,000] shares to IBG LLC for distribution to eligible customers of certain of its subsidiaries.

On [removed: July 30, 2021,] [added: August 1, 2022,] the Company filed a Prospectus Supplement on Form 424B5 [added: (File Number 333-240121)] with the SEC to issue [removed: 6,079,542] [added: 3,271,390] shares of common stock (with a fair value of [removed: $376] [added: $192] million) in exchange for an equivalent number of shares of member interests in IBG LLC.

As a consequence of these redemption transactions, and distribution of shares to employees, IBG, Inc.’s interest in IBG LLC has increased to approximately [removed: 23.5%,] [added: 24.5%,] with Holdings owning the remaining [removed: 76.5%] [added: 75.5%] as of December 31, [removed: 2021.][added: 2022.]

The redemptions also resulted in an increase in the Holdings interest held by Mr. Thomas Peterffy and his affiliates from approximately 84.6% at the IPO to approximately 90.5% as of December 31, [removed: 2021.][added: 2022.]

The table below presents information about shares of common stock available for future awards under all the Company’s equity compensation plans as of December 31, [removed: 2021.][added: 2022.]

| approved by security holders | N/A | | N/A | | [removed: 2,488,700] [added: 1,235,009] |

| Total | — | | — | | 1,235,009 |

The Company intends to submit for shareholder approval to authorize additional restricted stock units in the future as needed to maintain its equity compensation plans.

| Total | — | | — | | 2,488,700 |

| [Report of Independent Registered Public Accounting Firm (PCAOB ID No.](#Audit_Opinion) 34) | [removed: 58] [added: 60] |

| [Consolidated Statements of Financial Condition as of December 31, [removed: 2021] [added: 2022] and [removed: 2020](#BalanceSheet)] [added: 2021](#BalanceSheet)] | [removed: 60] [added: 62] |

| [Consolidated Statements of Comprehensive Income for the years ended December 31, [added: 2022,] 2021, [removed: 2020,] and [removed: 20](#IS)19] [added: 2020](#IS)] | [removed: 61] [added: 63] |

| [Consolidated Statements of Cash Flows for the years ended December 31, [added: 2022,] 2021, [removed: 2020,] and [removed: 2019](#StatementOfCashFlows)] [added: 2020](#StatementOfCashFlows)] | [removed: 62] [added: 64] |

| [Consolidated Statements of Change in Equity for the years ended December 31, [added: 2022,] 2021, [removed: 2020,] and [removed: 201](#SSE)9] [added: 2020](#SSE)] | [removed: 63] [added: 65] |

| [Notes to Consolidated Financial Statements](#FinancialStatementNotes) | [removed: 64] [added: 66] |

We have audited the accompanying consolidated statements of financial condition of Interactive Brokers Group, Inc. and subsidiaries (the "Company") as of December 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] the related consolidated statements of comprehensive income, [added: cash flows and] changes in equity, [removed: and cash flows,] for each of the three years in the period ended December 31, [removed: 2021,] [added: 2022,] and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2021,] [added: 2022,] in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, [removed: 2021,] [added: 2022,] based on criteria established in *Internal Control — Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February [removed: 25, 2022,] [added: 24, 2023,] expressed an unqualified opinion on the Company's internal control over financial reporting.

| (in millions, except share [added: or per share] amounts) | | [added: 2022 | | |] 2021 | | | 2020 | |

| Cash and cash equivalents | | [removed: $] | [added: 3,436 | | |] 2,395 | | [removed: $] | 4,292 |

| Cash [removed: -] segregated for regulatory purposes | | | [added: 25,167 | | |] 22,888 | | | 15,903 |

| Securities - segregated for regulatory purposes | | | [removed: 15,121] [added: 31,781] | | | [removed: 27,821] [added: 15,121] |

| Securities borrowed | | | [removed: 3,912] [added: 4,749] | | | [removed: 4,956] [added: 3,912] |

| Securities purchased under agreements to resell | | | [removed: 4,380] [added: 6,029] | | | [removed: 792] [added: 4,380] |

| Financial instruments owned | | | [removed: 559] [added: 396] | | | [removed: 544] [added: 559] |

| Financial instruments owned and pledged as collateral | | | [removed: 114] [added: 89] | | | [removed: 86] [added: 114] |

| Total financial instruments owned, at fair value | | | [removed: 673] [added: 485] | | | [removed: 630] [added: 673] |

| Customers, less allowance for credit losses of [removed: $8] [added: $10] and [removed: $17] [added: $8] as of December 31, [removed: 2021] [added: 2022] and [removed: 2020] [added: 2021] | | | [removed: 54,935] [added: 38,760] | | | [removed: 39,333] [added: 54,935] |

| Brokers, dealers and clearing organizations | | | [removed: 3,771] [added: 3,469] | | | [removed: 1,254] [added: 3,771] |

| Interest | | | [removed: 127] [added: 341] | | | [removed: 104] [added: 127] |

| Total receivables | | | [removed: 58,833] [added: 42,570] | | | [removed: 40,691] [added: 58,833] |

| Other assets | | | [removed: 911] [added: 926] | | | [removed: 594] [added: 911] |

| Total assets | | $ | [removed: 109,113] [added: 115,143] | | $ | [removed: 95,679] [added: 109,113] |

| Short-term borrowings | | $ | [removed: 27] [added: 18] | | $ | [removed: 118] [added: 27] |

| Securities loaned | | | [removed: 11,769] [added: 8,940] | | | [removed: 9,838] [added: 11,769] |

| Financial instruments sold, but not yet purchased, at fair value | | | [removed: 182] [added: 146] | | | [removed: 153] [added: 182] |

| Customers | | | [removed: 85,634] [added: 93,195] | | | [removed: 75,882] [added: 85,634] |

| Brokers, dealers and clearing organizations | | | [removed: 557] [added: 291] | | | [removed: 182] [added: 557] |

| Affiliate | | | [removed: 222] [added: 214] | | | [removed: 199] [added: 222] |

| Accounts payable, accrued expenses and other liabilities | | | [removed: 492] [added: 531] | | | [removed: 298] [added: 492] |

| Interest | | | [removed: 8] [added: 193] | | | [removed: 6] [added: 8] |

| Total payables | | | [removed: 86,913] [added: 94,424] | | | [removed: 76,567] [added: 86,913] |

| Total liabilities | | | [removed: 98,891] [added: 103,528] | | | [removed: 86,676] [added: 98,891] |

| Class A – Authorized - 1,000,000,000, Issued - [removed: 98,359,572] [added: 103,057,148] and [removed: 90,909,889] [added: 98,359,572] shares, Outstanding – [removed: 98,204,658] [added: 102,887,728] and [removed: 90,773,105] [added: 98,204,658] shares as of December 31, [removed: 2021] [added: 2022] and [removed: 2020] [added: 2021] | | | 1 | | | 1 |

| Class B – Authorized, Issued and Outstanding – 100 shares as of December 31, [removed: 2021] [added: 2022] and [removed: 2020] [added: 2021] | | | — | | | — |

| Additional paid-in capital | | | [removed: 1,442] [added: 1,581] | | | [removed: 1,244] [added: 1,442] |

| Retained earnings | | | [removed: 953] [added: 1,294] | | | [removed: 683] [added: 953] |

| Accumulated other comprehensive income, net of income taxes of $0 and $0 as of December 31, [removed: 2021] [added: 2022] and [removed: 2020] [added: 2021] | | | [removed: 4] [added: (22)] | | | [removed: 26] [added: 4] |

| Treasury stock, at cost, [removed: 154,914] [added: 169,420] and [removed: 136,784] [added: 154,914] shares as of December 31, [removed: 2021] [added: 2022] and [removed: 2020] [added: 2021] | | | [removed: (5)] [added: (6)] | | | [removed: (3)] [added: (5)] |

February 24, 2023

| Net income available for common stockholders | | $ | 380 | | $ | 308 | | $ | 195 |

| Cash, cash equivalents and restricted cash at end of period | | $ | 28,603 | | $ | 25,283 | | $ | 20,195 |

| Net distribution of common stock - IBKR Promotion | | | | | | | | | | | 9 | | | | | | | | | 9 | | | | | | 9 |

| Deferred tax benefit retained - follow-on offering | | | | | | | | 3 | | | | | | | | | | | | 3 | | | | | | 3 |

| Comprehensive income | | | | | | | | | | | | | | 380 | | | (26) | | | 354 | | | 1,377 | | | 1,731 |

| Balance, December 31, 2022 | | 103,057,148 | | $ | 1 | | $ | 1,581 | | $ | (6) | | $ | 1,294 | | $ | (22) | | $ | 2,848 | | $ | 8,767 | | $ | 11,615 |

In addition, our customers can use our trading platform to trade certain cryptocurrencies through a third-party cryptocurrency service provider that executes, clears and custodies the cryptocurrencies.

| U.S. and foreign government securities | | $ | 4,641 | | $ | 4,729 |

| Municipal securities | | | 82 | | | \- |

| | | $ | 31,781 | | $ | 15,121 |

transactions, are not reported in the consolidated statements of financial condition.

| | | 2022 | | | 2021 | |

| | | $ | 173 | | $ | 192 |

(2)These investments do not qualify for the equity method of accounting.

Crypto-assets safeguarding liability and corresponding safeguarding asset

In March 2022, the SEC published Staff Accounting Bulletin No. 121 (“SAB 121”), which provides interpretive accounting and disclosure guidance to entities that have obligations to safeguard crypto-assets held for their platform users, whether directly or through an agent or another third party acting on its behalf.

SAB 121 requires an entity to recognize a liability to reflect its obligation to safeguard the crypto-assets held for its platform users and a corresponding safeguarding asset on its balance sheet, even when the Company does not control the crypto-assets.

Both the crypto-asset safeguarding liability and the corresponding safeguarding asset shall be measured at the fair value of the crypto-assets held for the platform users with the measurement of the safeguarding asset taking into account any potential loss events.

SAB 121 is effective for interim or annual periods ending after June 15, 2022, with retrospective application as of the beginning of the fiscal year.

The Company adopted SAB 121 as of June 30, 2022, with retrospective application as of January 1, 2022.

The Company operates a trading platform that allows its customers to access a digital asset exchange and custody services provided by a third-party Cryptocurrency Service Provider (“CSP”) to buy, sell and hold crypto-assets in an account in the customer’s name at the CSP.

The Company does not provide execution, custody or safeguarding services for the customers’ crypto-assets and does not maintain (or have access to) the cryptographic key information and wallets necessary to access the crypto-assets, nor does the Company have any legal title or claim to those crypto-assets.

The CSP is responsible for securing the customers’ crypto-assets and protecting them from loss or theft.

The agreement the customer signs with IB LLC before the customer is permitted to access the CSP’s services through IB LLC’s platform provides that:

\[Customer\] acknowledges and agrees that \[IB LLC\] is not responsible for any trading or other losses (including, without limitation, losses due to theft, fraud, cybersecurity breach, loss of control of private keys, or any other loss arising from trading or holding digital assets with \[the CSP\]) resulting directly or indirectly from or in connection with \[Customer’s\] relationship with \[the CSP\] and/or \[Customer’s\] trading or holding of digital assets, including activity or holdings in the \[CSP\] Account.

Even though the Company is not responsible for the custody or safeguarding of crypto-assets, the Company is deemed to be in scope of SAB 121.

As of December 31, 2022, the fair value of the crypto-assets held in the customers’ names at the CSP that the Company recognized on its balance sheet for both the crypto-asset safeguarding liability and the corresponding safeguarding asset, which are included in “accounts payable, accrued expenses and other liabilities” and “other assets,” respectively, in the consolidated statements of financial condition, was $80 million ($134 million as of January 1, 2022), which consisted of $44 million of Bitcoin, $34 million of Ethereum and $2 million of other crypto-assets.

Changes in the fair value of crypto-assets, held by our customers at the CSP, do not impact our consolidated statements of comprehensive income unless a loss event is identified.

As of December 31, 2022, the CSP did not identify any loss events.

| Accounting for the Obligations to Safeguard Crypto-assets (SAB 121) ‎ ‎*Issued March 2022* | | Requires companies that have obligations to safeguard crypto-assets held for their platform users to recognize a liability to reflect such obligation and a corresponding asset in the balance sheet, both measured at the fair value of the crypto-assets. | |  Effective date: Effective for interim or annual periods ending after June 15, 2022, with retrospective application as of the beginning of the fiscal year. The Company adopted SAB 121 as of June 30, 2022, which resulted in the recognition a crypto-asset safeguarding liability and the corresponding safeguarding asset on its consolidated statements of financial condition. |

| | Ownership % | 24.5% | | 75.5% | | 100.0% |

| | Membership interests | 102,927,703 | | 316,609,102 | | 419,536,805 |

| Net income available for common stockholders | | $ | 380 | | $ | 308 | | $ | 195 |

| Net income available for common stockholders | | $ | 380 | | $ | 308 | | $ | 195 |

| Comprehensive income available for common stockholders | | $ | 354 | | $ | 286 | | $ | 221 |

| Basic | | | 100,460,016 | | | 94,167,572 | | | 79,939,289 |

| Diluted | | | 101,299,609 | | | 95,009,880 | | | 80,638,908 |

| U.S. and foreign government securities | | $ | 4,641 | | | — | | | — | | | 4,641 |

| Municipal securities | | | — | | | 82 | | | — | | | 82 |

February 25, 2022

| Balance, December 31, 2018 | | 75,230,400 | | $ | 1 | | $ | 898 | | $ | (3) | | $ | 390 | | $ | (4) | | $ | 1,282 | | $ | 5,874 | | $ | 7,156 |

| Comprehensive income | | | | | | | | | | | | | | 161 | | | 4 | | | 165 | | | 948 | | | 1,113 |

| | | $ | 15,121 | | $ | 27,821 |

Amounts receivable from customers that are

| | | $ | 192 | | $ | 104 |

| Income Taxes (Topic 740) ‎ ‎*Issued December 2019* | | Simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. | | Adopted January 1, 2021. The adoption of the changes did not ‎have a material impact on the Company’s consolidated financial statements. |

| | Ownership % | 23.5% | | 76.5% | | 100.0% |

| | Membership interests | 98,230,127 | | 319,880,492 | | 418,110,619 |

platform, increase assets held with the Company’s brokerage business and enhance customer loyalty.

| Stocks | | | 558 | | | — | | | 1 | | | 559 |

The Company’s Level 3 financial assets are comprised of delisted and illiquid securities reported within financial instruments owned, at fair value in the consolidated statements of financial condition.

As of December 31, 2020, Level 3 financial assets included $1 million in corporate bonds and $1 million in stocks, which were not traded in active markets and were valued by the Company based on internal estimates.

| | | (in millions) | | | | | | | | | | | | | | | |

| | | December 31, 2020 | | | | | | | | | | | | | | | |

| Securities borrowed | | | 4,956 | | | | — | | | | 4,956 | | | (4,716) | | | 240 |

| Total | | $ | 28,856 | | | $ | — | | | $ | 28,856 | | $ | (28,604) | | $ | 252 |

| Securities loaned | | $ | 9,838 | | | $ | — | | | $ | 9,838 | | $ | (9,246) | | $ | 592 |

| Total | | $ | 9,871 | | | $ | — | | | $ | 9,871 | | $ | (9,271) | | $ | 600 |

| Stocks | | $ | 9,811 | | $ | — | | $ | — | | $ | — | | $ | 9,811 |

| Corporate bonds | | | 27 | | | — | | | — | | | — | | | 27 |

| | | $ | 150,196 | | $ | 36,084 | | $ | 135,904 | | $ | 42,873 |

| | | $ | (2) | | $ | 59 | | $ | 7 |

| December 31, 2019 | | 1,374,217 | | | 65 |

| December 31, 2021 | | 1,077,048 | | | 83 |

| | | 29,324,335 | | $ | 841 |

| Balance, December 31, 2018 | | 5,472,706 | | | |

| Granted | | 1,374,217 | | | |

| Canceled | | (91,443) | | | |

| Distributed | | (1,627,565) | | $ | 91 |

| Granted | | 1,229,177 | 2 | | |

| Granted | | 1,077,048 | | | |

The Company expects to settle approximately $12 million of such uncertain tax position within the next twelve months.

Trading Technologies’ Bill of Costs motion is still pending.

markets and many other circumstances surrounding the liquidation of any particular customer’s margin-deficient account.

*“Short Squeeze” Antitrust Litigation*

Beginning in late January 2021, more than three dozen federal class-action lawsuits were filed in different jurisdictions against various brokers and other market participants claiming that the defendants acted improperly in restricting trading in the shares of and options on GameStop Corp. and other companies that were subject to unusual trading in January 2021 in what has been referred to as the “Reddit-related short-squeeze”.

Most of these cases assert federal antitrust claims, including alleging an illegal antitrust conspiracy among the defendants, as well as various state and federal securities-related claims.

IB LLC and its affiliates have been named as defendants in several of these class action lawsuits.

The cases were consolidated into a multidistrict litigation (“MDL”) and were transferred to the Southern District of Florida on April 1, 2021 for pre-trial proceedings.

[removed: In 2012, the Company’s management created the] [added: Our] Accounting Policy Committee (the “APC”) [removed: to provide] [added: provides] a robust framework for the design and implementation of all relevant controls.

Management, including our CEO and our CFO, assessed the effectiveness of IBG, Inc.’s internal control over financial reporting as of December 31, [removed: 2021.][added: 2022.]

Based on management’s assessment and those criteria, management concluded that IBG, Inc. maintained effective internal control over financial reporting as of December 31, [removed: 2021.][added: 2022.]

The effectiveness of the Company’s internal control over financial reporting as of December 31, [removed: 2021,] [added: 2022,] has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report, which appears herein.

No changes to our internal control over financial reporting for the year ended December 31, [removed: 2021] [added: 2022] have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

We have audited the internal control over financial reporting of Interactive Brokers Group, Inc. and subsidiaries (the “Company”) as of December 31, [removed: 2021,] [added: 2022,] based on criteria established in *Internal Control — Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2021,] [added: 2022,] based on criteria established in *Internal Control — Integrated Framework (2013)* issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statements [removed: of financial condition] as of [removed: December 31, 2021] and [removed: 2020 and the related consolidated statements of comprehensive income, cash flows, and changes in equity] for [removed: each of] the [removed: three years in the period] [added: year] ended December 31, [removed: 2021,] [added: 2022,] of the Company and our report dated February [removed: 25, 2022,] [added: 24, 2023,] expressed an unqualified opinion on those financial statements.

February 24, 2023

February 25, 2022

The consolidated financial statements required to be filed in the Annual Report on Form 10\-K are listed on page [removed: F\-1] [added: 59] hereof and in Part II, Item 8 hereof.

| 4.1 | [Description of the Registrant’s [removed: Securities.](https://www.sec.gov/Archives/edgar/data/1381197/000138119722000010/ibkr-20211231xex4_1.htm)] [added: Securities](https://www.sec.gov/Archives/edgar/data/1381197/000138119723000014/ibkr-20221231xex4_1.htm)] |

| 10.5 | [Amended Interactive Brokers Group, Inc. 2007 Stock Incentive [removed: Plan.] [added: Plan] (filed as Exhibit [removed: 10.5] [added: 10.9] to Form [removed: 10-K] [added: 10-Q] for the [removed: Year] [added: Quarterly Period] Ended [removed: December 31, 2014] [added: June 30, 2018] filed by the Company on [removed: March 2, 2015)](http://www.sec.gov/Archives/edgar/data/1381197/000104746915001520/a2223202zex-10_5.htm)+] [added: August 8, 2018)](http://www.sec.gov/Archives/edgar/data/1381197/000138119718000040/ibkr-20180630xex10_9.htm)+] |

| 21.1 | [Subsidiaries of the [removed: registrant.](https://www.sec.gov/Archives/edgar/data/1381197/000138119722000010/ibkr-20211231xex21_1.htm)] [added: registrant.](https://www.sec.gov/Archives/edgar/data/1381197/000138119723000014/ibkr-20221231xex21_1.htm)] |

| 23.1 | [Consent of Independent Registered Public Accounting [removed: Firm.](https://www.sec.gov/Archives/edgar/data/1381197/000138119722000010/ibkr-20211231xex23_1.htm)] [added: Firm.](https://www.sec.gov/Archives/edgar/data/1381197/000138119723000014/ibkr-20221231xex23_1.htm)] |

| 31.1 | [Certification of Chief Executive Officer, pursuant to Section 302 of the Sarbanes\-Oxley Act of [removed: 2002.](https://www.sec.gov/Archives/edgar/data/1381197/000138119722000010/ibkr-20211231xex31_1.htm)] [added: 2002.](https://www.sec.gov/Archives/edgar/data/1381197/000138119723000014/ibkr-20221231xex31_1.htm)] |

| 31.2 | [Certification of Chief Financial Officer, pursuant to Section 302 of the Sarbanes\-Oxley Act of [removed: 2002.](https://www.sec.gov/Archives/edgar/data/1381197/000138119722000010/ibkr-20211231xex31_2.htm)] [added: 2002.](https://www.sec.gov/Archives/edgar/data/1381197/000138119723000014/ibkr-20221231xex31_2.htm)] |

| 32.1 | [Certification of Chief Executive Officer, pursuant to Section 906 of the Sarbanes\-Oxley Act of [removed: 2002.](https://www.sec.gov/Archives/edgar/data/1381197/000138119722000010/ibkr-20211231xex32_1.htm)] [added: 2002.](https://www.sec.gov/Archives/edgar/data/1381197/000138119723000014/ibkr-20221231xex32_1.htm)] |

| 32.2 | [Certification of Chief Financial Officer, pursuant to Section 906 of the Sarbanes\-Oxley Act of [removed: 2002.](https://www.sec.gov/Archives/edgar/data/1381197/000138119722000010/ibkr-20211231xex32_2.htm)] [added: 2002.](https://www.sec.gov/Archives/edgar/data/1381197/000138119723000014/ibkr-20221231xex32_2.htm)] |

* Attached as Exhibit 101 to this Annual Report on Form 10\-K for the annual period ended December 31, [removed: 2021,] [added: 2022,] are the following materials formatted in iXBRL (Inline eXtensible Business Reporting Language) (i) the Consolidated Statements of Financial Condition, (ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated Statements of Cash Flows, (iv) the Consolidated Statements of Changes in Stockholders’ Equity and (v) Notes to the Consolidated Financial Statements tagged in detail levels 1\-4.

| [Condensed Statements of Financial Condition as of December 31, [removed: 2021] [added: 2022] and [removed: 2020](#PC_Balance_Sheet)] [added: 2021](#PC_Balance_Sheet)] | F - 2 |

| [Condensed Statements of Comprehensive Income for the Years ended December 31, [added: 2022,] 2021, [removed: 2020,] and [removed: 2019](#PC_Income_Statement)] [added: 2020](#PC_Income_Statement)] | F - 3 |

| [Condensed Statements of Cash Flow for the Years ended December 31, [added: 2022,] 2021, [removed: 2020,] and [removed: 2019](#PC_Cash_Flows)] [added: 2020](#PC_Cash_Flows)] | F - 4 |

We have audited the consolidated financial statements of Interactive Brokers Group, Inc. and subsidiaries (the “Company”) as of December 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] and for each of the three years in the period ended December 31, [removed: 2021,] [added: 2022,] and the Company’s internal control over financial reporting as of December 31, [removed: 2021,] [added: 2022,] and have issued our reports thereon dated February [removed: 25, 2022;] [added: 24, 2023;] such consolidated financial statements and reports are included elsewhere in this Form 10-K.

| (in millions, except share amounts) | | [removed: 2021] [added: 2022] | | | [removed: 2020] [added: 2021] | |

| Cash and cash equivalents | | $ | [removed: —] [added: 1] | | $ | [removed: 4] [added: —] |

| Investments in subsidiaries, equity basis | | | [removed: 2,400] [added: 2,845] | | | [removed: 1,962] [added: 2,400] |

| Other assets | | | [removed: 236] [added: 231] | | | [removed: 205] [added: 236] |

| Total assets | | $ | [removed: 2,636] [added: 3,077] | | $ | [removed: 2,171] [added: 2,636] |

| Payable to affiliates | | $ | [removed: 222] [added: 214] | | $ | [removed: 199] [added: 222] |

| Accrued expenses and other liabilities | | | [removed: 19] [added: 15] | | | [removed: 21] [added: 19] |

| Class A – Authorized - 1,000,000,000, Issued - [removed: 98,359,572] [added: 103,057,148] and [removed: 90,909,889] [added: 98,359,572] shares, Outstanding – [removed: 98,204,658] [added: 102,887,728] and [removed: 90,773,105] [added: 98,204,658] shares as of December 31, [removed: 2021] [added: 2022] and [removed: 2020] [added: 2021] | | | 1 | | | 1 |

| Class B – Authorized, Issued and Outstanding – 100 shares as of December 31, [removed: 2021] [added: 2022] and [removed: 2020] [added: 2021] | | | — | | | — |

| Additional paid-in capital | | | [removed: 1,442] [added: 1,581] | | | [removed: 1,244] [added: 1,442] |

| Retained earnings | | | [removed: 953] [added: 1,294] | | | [removed: 683] [added: 953] |

| Accumulated other comprehensive income, net of income taxes of $0 and $0 as of December 31, [removed: 2021] [added: 2022] and [removed: 2020] [added: 2021] | | | [removed: 4] [added: (22)] | | | [removed: 26] [added: 4] |

| Treasury stock, at cost, [removed: 154,914] [added: 169,420] and [removed: 136,784] [added: 154,914] shares as of December 31, [removed: 2021] [added: 2022] and [removed: 2020] [added: 2021] | | | [removed: (5)] [added: (6)] | | | [removed: (3)] [added: (5)] |

| Total equity | | | [removed: 2,395] [added: 2,848] | | | [removed: 1,951] [added: 2,395] |

| Total liabilities and equity | | $ | [removed: 2,636] [added: 3,077] | | $ | [removed: 2,171] [added: 2,636] |

| (in millions) | | [removed: 2021] [added: 2022] | | | [removed: 2020] [added: 2021] | | | [removed: 2019] [added: 2020] | |

| Income (loss) before income from subsidiaries | | $ | [removed: —] [added: 4] | | $ | [removed: (3)] [added: —] | | $ | [removed: (2)] [added: (3)] |

| Undistributed gains of subsidiaries, net | | | [removed: 383] [added: 463] | | | [removed: 237] [added: 383] | | | [removed: 208] [added: 237] |

| Income tax expense | | | [removed: 75] [added: 87] | | | [removed: 39] [added: 75] | | | [removed: 45] [added: 39] |

| Net income | | $ | [removed: 308] [added: 380] | | $ | [removed: 195] [added: 308] | | $ | [removed: 161] [added: 195] |

| Net income available for common stockholders | | $ | [removed: 308] [added: 380] | | $ | [removed: 195] [added: 308] | | $ | [removed: 161] [added: 195] |

| Cumulative translation adjustment, net of tax | | | [removed: (22)] [added: (26)] | | | [removed: 26] [added: (22)] | | | [removed: 4] [added: 26] |

| Comprehensive income available for common stockholders | | $ | [removed: 286] [added: 354] | | $ | [removed: 221] [added: 286] | | $ | [removed: 165] [added: 221] |

| Undistributed gains of subsidiaries, net | | | [removed: (383)] [added: (463)] | | | [removed: (237)] [added: (383)] | | | [removed: (208)] [added: (237)] |

| Deferred income taxes | | | [removed: 18] [added: 28] | | | [removed: 15] [added: 18] | | | [removed: 23] [added: 15] |

| (Gain) loss on remeasurement of Tax Receivable Agreement liability | | | [removed: (1)] [added: (6)] | | | [removed: 3] [added: (1)] | | | [removed: —] [added: 3] |

| Changes in operating assets and liabilities | | | [removed: 21] [added: 20] | | | [removed: (17)] [added: 21] | | | [removed: (1)] [added: (17)] |

| Net cash used in operating activities | | | [removed: (37)] [added: (41)] | | | [removed: (41)] [added: (37)] | | | [removed: (25)] [added: (41)] |

| Cash flows provided by investing activities | | | [removed: 111] [added: 127] | | | [removed: 67] [added: 111] | | | [removed: 81] [added: 67] |

| Cash flows used in financing activities | | | [removed: (56)] [added: (59)] | | | [removed: (49)] [added: (56)] | | | [removed: (60)] [added: (49)] |

| Effect of exchange rate changes on cash and cash equivalents | | | [removed: (22)] [added: (26)] | | | [removed: 26] [added: (22)] | | | [removed: 4] [added: 26] |

| Net increase in cash and cash equivalents | | | [removed: (4)] [added: 1] | | | [removed: 3] [added: (4)] | | | [removed: —] [added: 3] |

| Cash and cash equivalents at beginning of period | | | [removed: 4] [added: —] | | | [removed: 1] [added: 4] | | | 1 |

| Cash and cash equivalents at end of period | | $ | [removed: —] [added: 1] | | $ | [removed: 4] [added: —] | | $ | [removed: 1] [added: 4] |

| Cash paid for interest | | $ | 1 | | $ | [removed: —] [added: 1] | | $ | [removed: 2] [added: —] |

| Cash paid for taxes, net | | $ | [removed: 57] [added: 67] | | $ | [removed: 16] [added: 57] | | $ | [removed: 20] [added: 16] |

| Non-cash distributions from subsidiaries | | $ | 1 | | $ | 1 | | $ | [removed: —] [added: 1] |

IBG, Inc.’s primary asset is its ownership interest in IBG LLC, an automated global electronic broker specializing in executing and clearing trades in stocks, options, futures, foreign exchange instruments, bonds, mutual [removed: funds and] [added: funds,] exchange-traded funds (“ETFs”) [added: and precious metals] on more than 150 electronic exchanges and market centers around the world and offering custody, prime brokerage, securities and margin lending services to customers.

As of December 31, [removed: 2021,] [added: 2022,] receivables from affiliates was immaterial and as of December 31, [removed: 2020,] [added: 2021,] there were no receivables from affiliates.

February 24, 2023

| | | | 229 | | | 241 |

| (in millions) | | 2022 | | | 2021 | | | 2020 | |

| Net income | | $ | 380 | | $ | 308 | | $ | 195 |

February 25, 2022

| | | | | | | |

| | | | 241 | | | 220 |

| | | | | | | | | | |