Brokerage infrastructure is the chain of regulated firms and systems behind an investing app that opens the account, routes the order, settles the trade and holds the shares. Most apps that let people buy stocks do not do all of this themselves: they rent it from a licensed broker-dealer through an API, an arrangement sold as brokerage as a service. The app owns the screen and the customer relationship, while the firms underneath hold the licences, keep custody of the assets and carry most of the operational risk.

How it works: the layers behind an investing app

When a customer taps “buy”, the order passes through several layers. The first is the app, which handles sign-up, design and marketing. Behind it sits an introducing broker, the regulated firm that takes the customer on and accepts orders, a licence the app company may hold itself or borrow from a partner.

The introducing broker passes much of the work to a clearing and carrying broker. In the US, FINRA Rule 4311 on carrying agreements lists the jobs that must be divided between the two firms, including opening and approving accounts, executing orders, extending credit, receiving and delivering money and securities, sending confirmations and keeping books and records. Under a fully disclosed agreement, the carrying firm must safeguard customer cash and securities under SEC Rule 15c3-3 and send account statements, unless FINRA approves another split.

The order is then executed on an exchange or with a market maker, a wholesale firm that trades against retail orders. After execution comes clearing and settlement. In US equities that runs through DTCC: its National Securities Clearing Corporation nets millions of trades into fewer obligations (DTCC says netting cuts payment obligations by an average of 98%), and its Depository Trust Company moves the securities and cash that finalise each trade. Since 28 May 2024, SEC rules adopted in February 2023 have required most broker-dealer trades to settle one business day after the trade date, known as T+1, rather than two.

Fully disclosed versus omnibus

FINRA’s rule names two ways a carrying firm can hold an introducing firm’s customers. In a fully disclosed arrangement, each end customer is known to the carrying firm, has an account on its books and receives statements from it. In an omnibus arrangement, the introducing firm holds one pooled account at the carrying firm and keeps the individual customer records itself, so the carrying firm sees a single client. Omnibus set-ups suit a foreign bank or app that wants to aggregate its customers into one account at a US broker. In that structure the customer relies on the local firm’s records to show what they own.

Fractional shares

Fractional investing lets someone put $10 into a share priced at $500. The customer’s slice is recorded on the broker’s books rather than as a separate whole share. FINRA notes that some firms execute fractional orders in real time while others batch them into whole-share trades, which can affect the price. Fractional positions often cannot be moved to another broker without being sold first, and their holders may not get voting rights.

Brokerage as a service: who provides the plumbing

A handful of firms sell this stack to apps, banks, wallets and wealth managers. Alpaca offers a Broker API that partners use to build investing products, and in 2024 it became self-clearing at DTCC, taking clearing and settlement in-house. Partners include Thndr in Egypt. Alpaca raised $150 million in a Series D led by Drive Capital at a $1.15 billion valuation in January 2026 (our report), and in July 2026 it added German equities through a direct connection to Deutsche Börse Xetra (our report).

DriveWealth, LLC is a FINRA member broker-dealer and SIPC member whose API covers onboarding, account funding, trading, statements and tax reporting, and which says it works with more than 150 fintechs, brokers and advisers. Its partner TrueMoney now offers US stock investing in Thailand from 30 baht (our report), and it is working with Ripple to accept RLUSD stablecoin settlement for brokerage funding, starting in Europe (our report). Apex Fintech Solutions provides clearing, custody and equity execution; in February 2026 it said it powers US stock and ETF trading for Coinbase customers. In Europe, Berlin-based Upvest sells an investment API used by Revolut, N26, bunq and others to offer fractional stocks and ETFs, and it has FCA authorisation to operate in the UK.

Payment for order flow and investor protection

Payment for order flow means a market maker pays a broker to send it customers’ orders. The payment helps fund commission-free trading, but critics say it tempts brokers to route orders to whoever pays most rather than whoever gives the best price. In the US it is permitted, but brokers must describe these arrangements in their public Rule 606 order-routing reports. In the UK, the then regulator, the Financial Services Authority, effectively ruled it out in 2012. In the EU, Article 39a of MiFIR has banned it since 28 March 2024; Germany used a transition period for domestic business that ended on 30 June 2026, so the ban now applies across the bloc.

Investor protection follows the regulated firm that holds the assets, not the app brand. In the US, SIPC protects customers of a failed member firm up to $500,000, including a $250,000 limit for cash, when assets are missing. It does not cover market losses, and unregistered digital assets are not covered even when held at a member. In the UK, the FSCS covers investments up to £85,000 per person, per firm, for firms that failed after 1 April 2019, where a provider fails and money or assets it held are short. For a customer in Thailand or Egypt buying US shares through a local app, the entity holding the account decides which scheme, if any, applies.

The new edges of the stack

Interactive Brokers has launched Ethereum staking for eligible clients, provided by zerohash (our report). Alpaca and Kalshi agreed to add CFTC-regulated prediction market event contracts to Alpaca’s API, with Alpaca Derivatives LLC handling custody and account management (our report).

Tokenised stocks are another layer. On 30 June 2025 Robinhood launched stock tokens giving eligible EU customers exposure to more than 200 US stocks and ETFs, issued on the Arbitrum blockchain. Here the customer holds a token, so what they own and what they can claim depend on the issuer’s terms. Then there are AI agents: on 28 July 2026 Interactive Brokers said clients can connect their accounts to nearly any AI tool built on the Model Context Protocol (our report).

Questions about brokerage infrastructure

What is brokerage as a service?

Brokerage as a service is when a licensed broker-dealer lets another company offer investing under its own brand. The provider handles account opening, trading, clearing, custody and reporting, and the partner builds the customer experience.

What is a brokerage API?

A brokerage API is the set of programming interfaces a provider exposes so a partner’s app can open accounts, move money, place orders and pull statements by code.

How do investing apps work if trading is commission-free?

Apps that charge no commission typically earn money in other ways, such as payment for order flow where it is legal, currency conversion fees on cross-border trades, subscription tiers and interest on uninvested cash.

Are my shares safe if an investing app goes bust?

Customer assets should be held by the regulated custodian or carrying broker, separate from the app company’s own money. If that regulated firm fails, schemes such as SIPC in the US or the FSCS in the UK can cover missing assets up to their limits. Neither covers falling share prices.

Can people outside the US buy US stocks through a local app?

Yes, in many countries. Local banks, wallets and apps connect to US broker-dealers through brokerage APIs, so customers can buy US shares in small amounts in their own currency. Examples include Thndr in Egypt on Alpaca and TrueMoney in Thailand on DriveWealth.