Reuters' subsidiary, Instinet Corporation, has been chosen to market the global information, news and technology group's equity retail trading product through Instinet’s wholesale business on a private label basis.
The development of its new platform for direct online retail brokerage has been completed, but it will not now be marketed under the Instinet.com brand, says the company.
Key elements of the service will be combined with existing functionality to address the retail market indirectly via the brands of other financial services and brokerage firms which wish to utilise Instinet’s execution and clearing services.
Current market conditions in the retail online brokerage market, including the high costs of customer acquisition, lower levels of trading activity, slowing rate of new customer growth, and substantial declines in the value of online brokerage businesses, all make the wholesale market a more attractive business model at this time, the company says.
Instinet’s wholesale business offers access to the company's large pool of liquidity in equities, the use of its new retail clearing platform, and the opportunity to hold individual clients’ accounts. The first major wholesale customer relationship was established in October this year and over 30,000 trades a day are now being processed.
Doug Atkin, chief executive officer of Instinet Corporation, says: "We believe that the most prudent way to deliver an Instinet quality service to individual investors and value to Reuters shareholders, in the current circumstances, is by deploying our retail assets on a wholesale basis."