Partner Federation Glossary — last updated September 2026
Negative Balance Protection (NBP) guarantees a retail trading account can’t go below zero, even after extreme volatility blows through a client’s margin — the broker absorbs the shortfall and resets the balance to zero instead of the client owing money. In the EU and UK it’s a regulatory requirement for retail clients under ESMA’s 2018 product intervention measures; in many other jurisdictions it’s a voluntary guarantee some brokers offer and others don’t.
Why It Matters for Partners
NBP is a real cost the broker absorbs during volatile market events, and it can shape how a partnership program is structured — some programs explicitly exclude NBP write-offs from revenue share calculations, treating them as a broker cost rather than trading revenue, rather than assuming it’s automatically included. It’s also worth knowing which regulatory regime a program’s clients fall under, since NBP protection (or the lack of it) is one of the clearer signals of how regulated an offering actually is.