Glossary

The family of scoring rubrics TraderVerdict uses to evaluate financial counterparties. Three frameworks share the same spine: TVSM-PF for prop firms, TVSM-PL for platforms, and TVSM-BR for retail brokerages. Every TVSM score is a 0–100 composite derived from verifiable, primary-source evidence.

The final 0–100 number shown on a firm's page. It is a weighted sum of all dimension scores, after hard caps are applied. A higher composite indicates lower trader exposure, not necessarily a better firm for every trader — it answers the specific question each framework is designed to answer.

A step on a variable's evidence ladder. Each variable has 10 rungs (1 = worst observable outcome, 10 = best). The rung you land on depends on primary-source evidence meeting the specific predicate for that level. Every scored variable has a cited source URL and verbatim extract from that source.

A ceiling on the composite score that overrides the computed result when a specific condition is met. For example, if a brokerage has no negative-balance protection in a qualifying jurisdiction, the D5 ceiling fires. The lowest applicable cap wins. Caps are listed in the methodology and shown on each firm page when triggered.

A thematic grouping of variables. Each dimension has a weight that determines how much it contributes to the composite. For TVSM-BR, there are 6 dimensions: D1 Entity Safety (25%), D2 Investor Protection Schemes (20%), D3 Asset Segregation (20%), D4 Capital Strength (14%), D5 Withdrawal Reliability (13%), D6 Conduct Record (8%).

A string like "TVSM-BR/1.0.1" that identifies exactly which ruleset was used to compute a score. Every score_history row records this version, so you can trace any score change back to the specific methodology that produced it. When the methodology changes, every scored firm in that framework is recomputed.

A regulatory requirement that a broker must absorb losses when a client's account goes below zero — the client owes nothing beyond their deposit. NBP is mandated in the EU (ESMA rules), UK (FCA), and several other jurisdictions, but not in the US or Canada. Absence of NBP in a non-mandating jurisdiction caps the D5 composite ceiling in TVSM-BR.

One of two sub-scores that feed into TVSM-BR Dimension 3 (Asset Segregation). Axis A measures the segregation model (how assets are held) and the rehypothecation policy. It is computed as: (d3_segregation_model × 9 + d3_rehypothecation × 5) ÷ 14. D3 takes the minimum of Axis A and Axis B — whichever is weaker governs.

The second sub-score feeding TVSM-BR D3. Axis B measures the custody tier — who actually holds client assets, at what level of the intermediary chain, and under what regulatory framework. D3 = min(Axis A, Axis B). A strong custody structure cannot overcome a weak rehypothecation policy, and vice versa.

A broker's right to pledge or re-use client securities as collateral for the broker's own borrowing. When a client holds a margin account, the broker may (under certain agreements) lend those securities out. If the broker fails while securities are rehypothecated, clients may be unsecured creditors for that portion. Full prohibition scores highest in TVSM-BR; unlimited permission scores lowest.

A US government-mandated protection fund for brokerage clients. Covers up to $500,000 per customer (including $250,000 cash) if a member broker fails. SIPC does not protect against investment losses — only against broker failure. Because SIPC segregates by category (cash vs. securities), it scores at Rung 8 on the TVSM-BR coverage ladder rather than the top rungs reserved for unlimited or pooled schemes.

Canada's investor protection fund, covering client assets held at CIRO member dealers up to CAD $1,000,000 per account category. Unlike SIPC, CIPF coverage is not capped at a single combined total — separate categories (general, retirement, etc.) each get their own limit. Scores at Rung 8 on the TVSM-BR coverage ladder due to the categorised structure.

Canada's single national self-regulatory organization for investment dealers and mutual fund dealers, formed in 2023 from the merger of IIROC and MFDA. Brokers registered with CIRO are eligible for CIPF coverage. A broker that has resigned or been expelled from CIRO loses CIPF backing — an immediate downgrade on the TVSM-BR D2 protection ladder.

The US self-regulatory organization that oversees broker-dealers. FINRA enforces trading rules, reviews sales practices, and publishes enforcement actions in its BrokerCheck database. TVSM-BR D6 (Conduct Record) uses FINRA enforcement history — specifically AWC (Acceptance, Waiver, and Consent) orders — to evidence supervisory and compliance conduct.

A settlement mechanism in FINRA enforcement. A respondent accepts findings, waives a hearing, and consents to sanctions — without admitting or denying the findings. AWCs are public record in BrokerCheck. Multiple AWCs, or a single AWC involving fraud, customer harm, or anti-money-laundering failures, reduce the D6 enforcement-history rung in TVSM-BR.

A program where a broker lends out fully-paid client securities (not margin collateral) in exchange for a fee shared with the client. Participation is voluntary. The key risk: during the lending period, those securities are rehypothecated, and the "collateral" backing them is only as safe as the broker's counterparty arrangements. TVSM-BR weights this as a custody-tier risk when FPLPs are associated with adverse regulatory findings.

Additional private insurance purchased by a broker to cover amounts above the statutory SIPC or CIPF limits. Scores at the top rungs of the TVSM-BR D2 protection ladder when in place. Absence of excess coverage on top of a strong base scheme is handled by the D2C gap-fix rule introduced in TVSM-BR v1.0.1: the missing excess insurance cannot collapse a strong base scheme score below Rung 7.

The mechanism by which a prop firm tracks and enforces trading losses. Two main types: End-of-Day (EOD) — checks the account balance at market close each day, so intraday dips below the limit are not fatal — and Intraday — terminates the account if the balance touches the limit at any moment during the trading day. EOD is more trader-friendly; Intraday is stricter and more common.

A drawdown limit that moves up with profits but never moves down. As the account balance grows, the maximum drawdown threshold rises to lock in gains — reducing the realised trading range over time and making it progressively harder to stay above the limit. A key variable in TVSM-PF Rule Fairness scoring.

The percentage of trading profits a trader keeps. Advertised splits can differ from effective splits after scaling caps, consistency rules, or payout-cap mechanics are applied. TVSM-PF scores the effective split a standard-account trader receives on their funded payouts, not the headline number.

A per-payout or per-period ceiling on how much a trader can withdraw. Distinguished from scaling programs. Hard caps that materially limit total trader income trigger the Cap 1 ceiling in TVSM-PF, reducing the composite to ≤39.