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Forex and contracts for difference (CFDs) broker CMC Markets (LSE:CMCX) said on Wednesday it entered into a partnership with ANZ Share Investing, one of the leading banks in Australia and New Zealand, under which it will service the bank’s entire stockbroking client base. The deal will result in CMC Markets becoming the second-largest stockbroker in Australia by both number of clients and trades executed.
The client transfer is expected to be finalized by September 2018, following a transition period. ANZ will decommission its current trading platform after the customer migration.The transaction is not subject to any regulatory or shareholder approval.
“For now it’s business as usual for our customers who will access the same share trading platform they have always used and we will continue to manage their deposits once they transfer to the new system,” said ANZ Managing Director Pensions and Investments Peter Mullin.
More than 500,000 of the bank’s clients will gain access to CMC Markets’ in-house share trading platform under the ANZ Share Investing brand. The broker will provide technology, customer service and execution via the stockbroking platform. Traders will be using the ANZ-branded platform, but will be entering into contracts with CMC Markets. The broker will charge them a fixed price per trade executed.
“I am delighted to announce a significant transaction for the CMC Group which will result in our Australian stockbroking business becoming the clear number two online broker in Australia,” Peter Cruddas, CMC Markets CEO, said. “ANZ is a high-quality partner with whom we have an excellent relationship and this transaction demonstrates their confidence in CMC’s technology capability, the quality of our people and our commitment to Australia,” he added.
As a result of the agreement, CMC Markets expects to see its gross revenue generated from stockbroking operations by approximately AUS 40 million. The additional trading revenue increase will significantly surpass the forecast cost increase, mainly due to the scalability of CMC’s platform.
“This is an important transaction for CMC and represents an opportunity to expand its presence in Australia. The increase in volume anticipated from the transaction means that staff numbers are expected to increase in Sydney with the majority of these roles being filled by existing ANZSI staff,” the broker said in a filing with the London Stock Exchange.
ANZ stands for Australia and New Zealand Banking Group Ltd. It is the second largest stockbroking service provider in Australia with more than 500,000 clients.
CMC Markets holds a license from the UK’s Financial Conduct Authority (FCA). It is also registered across several countries in the EU, including with France’s Autorite des Marches Financiers (AMF). The brokerage serves retail and institutional clients and has offices in 14 countries with a focus on the markets in the UK, Australia, Germany and Singapore. It offers trading in forex, CFDs, commodities, indices, shares, etc. It got listed on the London Stock Exchange (LSE) in February 2016, raising about £218 million.