BMO Financial Group has entered into a definitive agreement to acquire Clearpool Group, a New York-based provider of electronic trading solutions and an independent agency broker-dealer operating in the US and Canada.
The transaction is subject to receipt of required regulatory approvals and other customary conditions and is currently expected to close in the second quarter of the year.
Terms were not disclosed.
The transaction delivers new capabilities to BMO’s electronic trading platform. As the nature of equity trading shifts to increased emphasis on electronic trading, the acquisition of Clearpool demonstrates BMO’s commitment to delivering leading edge trading technology to its global client base.
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“The acquisition of Clearpool is consistent with these priorities as it gives us access to leading next-gen trading technology and a broker-dealer client base,” says Dan Barclay, CEO, BMO Capital Markets.
On closing, Clearpool will be a separate broker-dealer with information barriers to secure clients’ confidential information.
“Clearpool’s business was built on providing transparency and control to all market participants,” says Aine O’Flynn, managing director and head of global equity products, BMO Capital Markets. “We are committed to maintaining those principles.”
“The acquisition positions us well to accelerate the next step in our platform development and provide the infrastructure to become a global, multi-asset class electronic trading solution. None of this would be possible without our employees, clients, and advocates who continue to shape our vision of transparency and collaborative trading solutions,” says Joseph Wald, CEO and Co-Founder, Clearpool.
Electronic trading is a rapidly growing portion of the global equity secondary commission/fee pool. A 2018 report by Greenwich Associates estimates that 73% of global equity flows are executed electronically and for more liquid developed markets, the rate is likely over 90%.
Founded in 2014, Clearpool has approximately 60 employees and over 100 clients, primarily US broker dealers who utilise the company’s trading technology and execution services. Its Algorithmic Management System (AMS) provides a fully customisable suite of algorithmic trading tools designed to service the best execution needs of institutional clients