OpenMarkets launches as new online broker.

The Australian Securities Exchange has welcomed its first new online broker since 2007 following the launch of OpenMarkets.

An independently-owned stockbroker specialising in low-cost online trading solutions, OpenMarkets is a full market participant of the Australian Securities Exchange, National Stock Exchange of Australia, and SIM VSE.  It acquired the licence through its purchase of Sydney-based firm Cameron Stockbroking Ltd in May.

With its own clearing and settlement memberships, OpenMarkets focuses on end-to-end online trading solutions for the retail and wholesale market.   Additionally, OpenMarkets will build its client base through partnerships with third party financial services firms.

“We are a truly independent, low cost brokerage firm,” said OpenMarkets’ Chief Executive Officer, Rick Klink. “While individual and wholesale investors can use the service directly, we also intend to develop and grow the business through an open partnership approach. This will see us build relationships and integrate our services with third parties, such as research providers, for the benefit of our mutual clients.”

OpenMarkets is already live with a select group of clients, and will officially launch its retail services soon.

Michael Cox, Chairman of the National Stock Exchange, said: “The launch of online trading by OpenMarkets is an historic moment for NSX. It gives investors and traders a service they’ve been asking for.  NSX has enjoyed the addition of a record eight new brokers this year and the connection of our ninth being our first online broker is excellent news and further evidences the rapidly growing interest in NSX.”

The launch of OpenMarkets comes at a time when the stockbroking industry is undergoing significant consolidation and upheaval. Changes in the regulation of the financial services industry, more stringent compliance requirements from ASIC and ASX, coupled with the impacts of the GFC, have all made it harder for the smaller full service brokers to survive.

More importantly, FOFA reforms have forced the unbundling of execution and advice which has seen financial advisers seeking the lowest cost execution in response to increased pressure from their clients.

“Our focus on execution will make us extremely attractive to financial service providers wanting to offer their clients an online trading service that does not try to sell  financial products that are in direct competition with their services” said Chief Operating Officer, Andrea Marani.

Commenting on the launch of the business, the Australian Securities Exchange’s General Manager of Trading Services, David Raper, said “ASX is pleased to welcome OpenMarkets as a new market participant. The market structure and the needs of users have undergone significant change in recent years and ASX is pleased that OpenMarkets has identified the competitive advantage of hosting its market data and trading infrastructure in the ASX Australian Liquidity Centre.”

OpenMarkets resources and infrastructure are provided through a partnership with Paritech, a leading provider of front and middle office software trading technologies to the finance industry.   Through this partnership OpenMarkets also has access to an initial client base of high net worth investors through subsidiary company, Paritrade.

Mr Klink said the infrastructure for the trading platform was designed to be highly scalable and user friendly.

“OpenMarkets is the first Australian stockbroking business to fully embrace the power of cloud computing through our partnership with global giant Amazon’s Australian-based datacentre infrastructure.

“The use of cloud computing has significantly reduced our capital expenditure and risks, while still maintaining the security and ability to handle high trading volumes at any time.   This also means we are not reliant on legacy third party incumbents,” said Mr Klink. “This will allow us to introduce new developments faster and more efficiently as our broking business continues to grow.

“We are also offering a powerful set of trading web services that we believe will transform online trading in Australia.  These services will allow third parties, such as wealth management companies and research providers, to quickly and cost effectively deliver fully integrated trading applications via their own websites or mobile apps.”

OpenMarkets’ retail services include a simple ‘no-frills’ web trading platform together with an advanced trading platform. OpenMarkets’ transaction cost is $13.95 or 0.07% per transaction which is lower and simpler than the fee schedules of its bank competitors.

“Our focus is very much on providing a low cost, personalised, online, independent broking service,” said Mr Marani.

The post Australian online broker set to open new doors for finance industry participants appeared first on AdviserVoice.