What does Carrying Broker mean?
A commodities or securities broker who executes transactions on behalf of other brokers. A carrying broker provides back office functions such as clearing, settlement and custodial services to other brokers or members. He gets a fee for these services.
Futures Knowledge Explains Carrying Broker
A carrying broker provides clearing and other services for other members or brokers. As a carrying broker develops specialization and expertise in some functions, other members or brokers outsource some functions to him. Some brokers, known as introducing brokers, who do not have time or adequate skill, avail the services of carrying brokers. The introducing members may concentrate more in their core activities. It is also cost effective method that enables introducing members to providing full service to their clients.