<SEC-DOCUMENT>0001381197-19-000054.txt : 20190927
<SEC-HEADER>0001381197-19-000054.hdr.sgml : 20190927
<ACCEPTANCE-DATETIME>20190807172521
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001381197-19-000054
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20190807

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Interactive Brokers Group, Inc.
		CENTRAL INDEX KEY:			0001381197
		STANDARD INDUSTRIAL CLASSIFICATION:	SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211]
		IRS NUMBER:				300390693
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		ONE PICKWICK PLAZA
		CITY:			GREENWICH
		STATE:			CT
		ZIP:			06830
		BUSINESS PHONE:		203-618-5800

	MAIL ADDRESS:	
		STREET 1:		ONE PICKWICK PLAZA
		CITY:			GREENWICH
		STATE:			CT
		ZIP:			06830
</SEC-HEADER>
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    <div style="text-align: center; font-weight: bold;">INTERACTIVE BROKERS GROUP, INC.</div>
    <div><br>
    </div>
    <div style="text-align: center; font-weight: bold;">One Pickwick Plaza</div>
    <div style="text-align: center; font-weight: bold;">Greenwich, Connecticut 06830</div>
    <div style="text-align: center; font-weight: bold;">Tel: (203) 618-5800</div>
    <div><br>
    </div>
    <div><br>
    </div>
    <div>August 7, 2019</div>
    <div><br>
    </div>
    <div style="font-weight: bold;"><u>VIA EDGAR</u></div>
    <div><br>
    </div>
    <div>United States Securities and Exchange Commission<br>
      Division of Corporation Finance</div>
    <div>Office of Financial Services<br>
      100 F Street, N.E.<br>
      Washington, DC&#160; 20549<br>
      Attention:&#160; Michelle Miller and Marc Thomas</div>
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              <td style="width: 24pt; vertical-align: top; align: right; font-weight: bold;">Re:</td>
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                <div style="font-weight: bold;">Interactive Brokers Group, Inc.<br>
                  Responses to the Securities and Exchange Commission&#8217;s Comments to<br>
                  Form 10-K for Year Ending December 31, 2018, Filed February 28, 2019 and<br>
                  Form 10-Q for the Period Ending March 31, 2019, Filed May 9, 2019</div>
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    <div style="margin-left: 36pt; font-weight: bold;">&#160;CIK No. 0001381197</div>
    <div><br>
    </div>
    <div>Ladies and Gentlemen:</div>
    <div><br>
    </div>
    <div style="margin-bottom: 12pt;">Interactive Brokers Group, Inc. (the &#8220;<u>Company</u>&#8221;) responds to the additional comments raised by the staff (the &#8220;<u>Staff</u>&#8221;) of the Securities and Exchange Commission (the &#8220;<u>Commission</u>&#8221;) in the letter
      dated July 24, 2019 from the Division of Corporate Finance, Office of Financial Services to Mr. Paul J. Brody, Chief Financial Officer of the Company, regarding the Company&#8217;s Annual Report on Form 10-K for the year ending December 31, 2018 (&#8220;<u>Annual

        Report</u>&#8221;) and Quarterly Report on Form 10-Q for the period ending March 31, 2019 (&#8220;<u>Quarterly Report</u>&#8221;).&#160; For your convenience, the Staff&#8217;s comments are included in this letter and are followed by the applicable response.</div>
    <div style="font-weight: bold;"><u>Form 10-Q for the period ending March 31, 2019</u></div>
    <div><br>
    </div>
    <div style="font-weight: bold;"><u>Management's Discussion and Analysis of Financial Condition and Results of Operations</u></div>
    <div style="font-weight: bold;"><u>Financial Overview, page 40</u></div>
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              <div style="margin-left: 18pt;">1.</div>
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              <div>We note your response to comment 2. Disclose, in future filings, how the customer accounts related to the margin loan loss were "well margined" considering you only recovered $5 million from the liquidation of collateral.</div>
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    <div style="margin-bottom: 12pt; font-weight: bold;">Response:</div>
    <div style="margin-bottom: 12pt;">The Company notes the Staff&#8217;s comments. The company believes that its current disclosures adequately describe its process related to margin loan risk as described on page 11 of its Annual Report in Part I, Item 1
      &#8220;Business &#8211; Risk Management Activities &#8211; Electronic Brokerage&#8221; and on page 61 of its Quarterly Report in Part 1, Item 3 &#8220;Quantitative and Qualitative Disclosures about Market Risk &#8211; Margin Loans&#8221;.</div>
    <div style="margin-bottom: 12pt;">In addition, the Company&#8217;s disclosure on page 40 states that the customer accounts were well margined at December 31, 2018 and that the Company had not incurred any losses since none of its customer accounts had fallen
      in deficit at December 31, 2018. This statement is accurate as to that date: at December 31, 2018 these customer accounts had aggregate positive equity of $86 million based on the stock&#8217;s price of $3.96 per share. As a result, the Company believes
      the disclosure was adequate because the accounts were well margined at December 31, 2018.</div>
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    <div style="margin-bottom: 12pt;">The losses the Company incurred resulted from significant declines in the share price of the stock collateralizing margin loans following an analyst report which alleged that &#8220;at least 77% of the [issuer&#8217;s] assets are
      fabricated.&#8221; The report also alleged that the issuer&#8217;s only operating entity has been declared insolvent in China and is involved in multiple legal proceedings which it has failed to disclose in its filings with the Commission. As a result of the
      analyst report and the allegations of fraud therein, the stock&#8217;s price fell significantly in a short period of time.</div>
    <div style="margin-bottom: 12pt;">During the first quarter of 2019, the stock&#8217;s share price continued to fall significantly (e.g., to $0.41 per share at February 28, 2019) resulting in aggregate gross deficits in the affected customer accounts of $47
      million. Despite the Company&#8217;s efforts to liquidate the customers&#8217; positions, given the low liquidity in the market there were limited opportunities to do so without realizing losses. As a result, as of March 31, 2019, the Company was able to recover
      $5 million through these efforts, thereby reducing the total loss to a net of $42 million. In addition, the Company&#8217;s <font style="font-family: 'Times New Roman',Times,serif;">foreclosure on the remaining shares (that had previously been held as
        collateral) began a six-month holding period under Rule 144(d)(1)</font>, and the Company will continue to record mark-to-market gains/losses until such time as it is able to liquidate this position.</div>
    <div style="margin-bottom: 12pt; font-weight: bold;"><u>Item 3. Quantitative and Qualitative Disclosures about Market Risk</u></div>
    <div style="font-weight: bold;"><u>Margin Loans, page 59</u></div>
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              <div style="margin-left: 18pt;">2.</div>
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              <div>We note your response to comment 2. Given that margin loans represent a significant portion of total assets, the differing risk levels associated with these types of loans as well as the events and circumstances which lead to the gross
                losses and minimal recoveries recognized, please address the following in order to provide investors with an enhanced understanding of the Company's exposures as it relates to the margin loans:</div>
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              <div style="margin-left: 54pt; font-family: Symbol, serif;">&#8226;</div>
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              <div>Disaggregate your margin loans by type, amount and underlying strategy; and</div>
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    <div><br>
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      <table cellspacing="0" cellpadding="0" id="z1102e2f486764d83b40759514f3475a8" class="DSPFListTable" style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; width: 100%; text-align: left; color: #000000;">

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              <div style="margin-left: 54pt; font-family: Symbol, serif;">&#8226;</div>
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              <div>Disclose if you revised or enhanced your policies for margin loans in response to the loss incurred.</div>
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    <div><br>
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    <div style="margin-bottom: 12pt; font-weight: bold;">Response:</div>
    <div style="margin-bottom: 12pt;">The Company notes the Staff&#8217;s comments. In response to the first bullet point, the Company has considered how disaggregation can be accomplished and does not believe that margin loans can be disaggregated as requested.
      Margin loans represent a type of loan extended to brokerage customers that is collateralized by marketable securities in the customers&#8217; accounts in accordance with regulatory requirements and internal policies. This is the only type of loan the
      Company extends to its customers. Because the margin requirements placed on a customer account depend on the many combinations of positions that may be held in an account (e.g., stock and options positions may reduce price risk and, therefore, margin
      requirements), margin loans cannot be disaggregated by security type or underlying strategy. As such, the Company believes that its disclosures with respect to its margin loans are in compliance with the requirements of Commission&#8217;s Regulations and
      U.S. GAAP.</div>
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    <div style="margin-bottom: 12pt;">In response to the second bullet point, the Company continuously enhances its policies for margin loans, including for the events leading to the loss, as disclosed on page 41 of the Company&#8217;s Form 10-K for the period
      ending December 31, 2018:</div>
    <div style="margin-left: 36pt; margin-bottom: 12pt;">&#8220;Our Risk Management Committee continuously monitors and evaluates our risk management policies, including the implementation of policies and procedures to enhance the detection and prevention of
      these types of events.&#8221;</div>
    <div style="margin-bottom: 12pt;">The Company will include similar disclosures, as appropriate, in its future filings with the Commission:</div>
    <div style="margin-bottom: 12pt;">If you have any questions, please feel free to contact the undersigned by telephone at 203.618.5800.</div>
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            <div>Sincerely,</div>
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          <td style="width: 100%; vertical-align: top;" colspan="2">&#160;</td>
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          <td style="width: 100%; vertical-align: top;" colspan="2">&#160;</td>
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            <div>/s/ Paul J. Brody<br>
            </div>
          </td>
          <td style="width: 68.06%; vertical-align: top;">&#160;</td>
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            <div>Paul J. Brody</div>
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            <div>Chief Financial Officer, Treasurer and Secretary</div>
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