Penson Sells Its Futures Division to Knight

Discussion in 'Index Futures' started by rmorse, May 29, 2012.

  1. rmorse

    rmorse Sponsor

    Penson Sells Its Futures Division to Knight

    DALLAS--(BUSINESS WIRE)--May. 29, 2012-- Penson Worldwide, Inc. (NASDAQ: PNSN) today announced that it has agreed to sell certain assets and liabilities of the futures division of its U.S. broker-dealer subsidiary, Penson Financial Services, Inc. (PFSI), to Knight Capital Group, Inc. (NYSE Euronext: KCG). The transaction, which is subject to customary closing conditions and regulatory approvals, is expected to be completed in the second quarter of 2012. PFSI’s futures division services more than 60 introducing brokers, high-frequency traders, hedgers, non-clearing FCMs, professional traders and exchange members.

    As consideration for the transfer of certain assets and liabilities of the futures division, Penson will receive $5 million at closing, a portion of which is subject to the transfer of certain exchange seats or memberships. In addition, Penson is entitled to receive earn-out payments over the next three years based on the performance of the futures division. Penson management currently estimates that the total amount of consideration to be received will result in a small gain on the sale.

    Customer futures positions and segregated funds and collateral, and foreign exchange positions and margin will be transferred to Knight. Access to positions and accounts by customers will not change and the transfer of the business will not require any technology conversions. Current management of Penson’s futures division will remain in place and Penson will continue to service its introducing brokers and customers through a transition services agreement with Knight. The parties expect that the majority of futures division employees will move to Knight. Additional details will be provided in subsequent Penson filings with the Securities and Exchange Commission.

    “Knight provides accounts with a stable, well-capitalized, independent platform and it will be ‘business as usual’ for futures customers,” said Philip A. Pendergraft, CEO of Penson Worldwide. “This transaction represents an ideal solution for our futures introducing brokers, customers, and related counterparties, as well as for our other stakeholders. As previously announced, we continue to work on other strategic transactions in both the US and Canadian markets.”

    “We’re pleased to expand Knight’s capabilities in futures,” says Thomas M. Joyce, Chairman and Chief Executive Officer, Knight Capital Group. “We’ll continue Penson’s work to enhance the client experience through advanced trading technologies and superior service.”

    Knight separately today issued its own news release on this transaction.
  2. high99


    So, call me stupid, but I would suppose that would include MB Trading, who I use for futures. However MBT would continue to use Penson for stock, FOREX, and options? Does this sound right? Or are we/I getting ahead of ourselves and wait for more info? Stupid minds want to know.
  3. rmorse

    rmorse Sponsor

    AFTER the close of the transaction. All Futures, options on futures and FX trading will belong to Knight Capital. All "equity" accounts, Reg-T and CPM will remain at Penson Financial. If your broker is a correspondent at the FCM Penson Futures, I assume they will move their business to Knight. They might choose to move elsewhere. You will have to ask them.

    If you had an account at Penson or a correspondent with a futures/fx account and a Reg-T/CPM or JBO agreement, you might not have an account that enables moving assets back and forth to meet margin requirements. We will see what happens.
  4. MB does not go through Penson for FX - stocks/options/futures etc. do, but not FX.
  5. zdreg


    you said by certain measurements penson was superior to IB.
    deal with shlack you will end up in mud.
  6. trilogic


    Hi, side note, do you have any information relative to setting up as an IB or GIB fir fut's and other over the counter products- are you a FCM ? THNX