# Is a Prop Firm a Broker? The Difference That Matters

> An evaluation prop firm is not a broker. A broker holds client money and executes client orders in a market; a prop firm sells a simulated evaluation and pays rewards from its own revenue. Firms state this on their sites, for example FTMO: "do not act as a broker and do not accept any deposits". Some large prop firms now own brokers, which is a separate, regulated business.

- Source: https://pipvalley.com/guides/is-a-prop-firm-a-broker
- Publisher: PipValley - web design studio for prop trading firms
- Updated: 2026-10-12

**Short answer:** An evaluation prop firm is not a broker. A broker holds client money and executes client orders in a market; a prop firm sells a simulated evaluation and pays rewards from its own revenue. Firms state this on their sites, for example FTMO: "do not act as a broker and do not accept any deposits". Some large prop firms now own brokers, which is a separate, regulated business.

The broker question decides more than a founder expects: which licences may apply, which processors will onboard you, which words your website may use and what your affiliates may say. Getting the distinction right in your own head is the first step to getting it right in your terms.

## How do they differ?

**Broker vs evaluation prop firm (general model)**

| Factor | Broker | Evaluation prop firm |
|---|---|---|
| Client money | Holds deposits for trading | Takes a fee; no trading deposit |
| Orders | Executed in a market or internalized against clients | Simulated; never reach a market |
| Revenue | Spreads, commissions, client losses on B-book | Fees, resets and add-ons |
| Main liability | Client balances | Payouts awarded under its rules |
| Licensing | Usually required | Depends on structure and market; ask a lawyer |

## How do firms say it?

Most evaluation firms carry a "not a broker" line in their footer or terms. FTMO says it does "not act as a broker and do not accept any deposits". MyFundedFutures says it is "not a broker-dealer, investment adviser, introducing broker, futures commission merchant (FCM), or money manager". These statements describe the firms' own structures; they are not wording you can copy without your own legal review.

## Why are prop firms buying brokers?

Because a broker lets a firm offer its best traders a live route, earn brokerage revenue and build a regulated relationship with customers. FTMO completed its acquisition of OANDA on December 1, 2025. Topstep launched an introducing broker, an NFA member cleared by Plus500, in January 2026. Several large CFD firms now show a broker cross-sell page on their sites.

For a new firm, a broker relationship usually starts smaller: a partner broker for A-booking selected traders, or a referral arrangement. Each adds contracts and legal questions, and your website has to keep the simulated evaluation and the live broker clearly apart.

> This page explains how things generally work and what we've seen running prop firms. It isn't legal, tax or financial advice. Rules differ by country and change often, so ask a lawyer or adviser in your jurisdiction before you act.

## Questions

### Do prop firms hold my money?

An evaluation firm takes a fee for the challenge, not a deposit for trading. It pays rewards from its own revenue. If a firm asks you to deposit trading funds, it is operating a different model.

### Can a prop firm also be a broker?

A group can own both, as FTMO does with OANDA, but they are separate businesses with separate rules. The evaluation stays simulated unless the firm states otherwise.

### What is the difference between a B-book broker and a prop firm?

A B-book broker takes the other side of real client trades funded by client deposits. A prop firm's trades are simulated and the trader risks only the fee; its exposure is the payouts it awards.

## Sources

- [FTMO: homepage and simulated-account disclosure](https://ftmo.com/en/)
- [MyFundedFutures: homepage and disclosures](https://myfundedfutures.com/)
- [Finance Magnates: FTMO closes OANDA acquisition deal after ten months](https://www.financemagnates.com/forex/prop-firm-ftmo-closes-oanda-acquisition-deal-after-ten-months/)
- [TradeInformer: Topstep launches introducing broker through Plus500 partnership](https://tradeinformer.com/broker-news/topstep-launches-introducing-broker-through-plus500-partnership)