LMAX, a Betfair-backed online trading platform for retail contracts for difference (CFD) and foreign exchange investors, has launched.
Betfair acts as a middle man, connecting customers for a commission who then bet - or trade - against each other on sporting events. The firm has now established multi-lateral trading facility LMAX to bring a similar model to the financial markets.
The platform is initially allowing customers to trade rolling spot FX contracts and CFDs in equity indices, commodities, bonds and interest rates, with other asset classes to be added. CFD trades are cleared via LCH.Clearnet.
The firm claims LMAX provides retail CFD and FX investors with a sophisticated but easy-to-use neutral platform, offering traders a "fairer and more transparent" alternative. It is based on Betfair's original matching engine but has applied and refined the model for financial trading, alongside in-house technology.
Fintech vendor Cinnober is providing its market surveillance and monitoring technology Scila.
Robin Osmond, chief executive, LMAX, says: "The current broker-led model for online trading of CFDs and FX is outdated and doesn't work to directly benefit the customer as the interests of parties are not aligned. We are bringing transparency and fairness to the market by providing an exchange platform and a business model that clearly wants its retail traders to be as successful as possible."
Betfair owns 72.5% of the platform, Goldman Sachs 12.5% and management the rest.