Regulated Equities Brokerage
Context
The retail-focused equities broker was seeking to expand its product suite, based on demand from clients, to have access to digital assets. This was in the face of competitors already offering both traditional and digital products.
Rather than build their own exchange infrastructure, the client wanted to explore more cost-effective solutions. The solution was to integrate into existing liquidity pools through a central exchange aggregator and offer the option of outsourcing the client support and administration or operating it in-house. A process was run to source the most suitable party and undertake due diligence with recommendations.
Services
Project requirements:
Research & Analysis
Operational Due Diligence
Technical Integration
Blockchain Advisory
“They are good communicators. They have experience of not only the market but were extremely helpful in their network. They were also a pair of hands I could trust”
- COO & Board Member, Regulated Equities Brokerage
Appold Partner Comment:
“The addition of digital asset trading to any company that currently offers traditional securities is complex. There are many factors to consider, examples of this include accessing multiple liquidity venues, the custody of the assets, data provision, the integration of service provider technology into the current broker technology infrastructure, regulation in the jurisdictions of broker clients and rules around marketing and promotion. Retail-focused equity brokerages that do not offer their clients digital assets are under pressure to do so, based on the risk of losing business to competitors. Clients want choice and will naturally migrate to more versatile brokerage houses that can offer a broader range of products, in conjunction with lower fees, a strong platform and high quality of service. All of which is appropriately regulated in the relevant jurisdiction.
On the other side of the spectrum is the noise that has been made in the past by some crypto exchanges to move into more traditional financial services products. In some cases, there are digitally tokenised versions available but this is an area of contention in regards to regulation and litigation. What may become more commonplace is digital asset companies acquiring their way into traditional financial markets on a broader scale in the future. Different jurisdictions will have different regulations and limits on this but clearer rules and full compliance may bring such opportunities.”
- Pete Osborne, Partner
