FinClear 

FinClear Pty Ltd. is a General Clearing and Settlement group that offers third-party clearing and settlement to the participants in the Australian share market. The company is only third-party clearer who has been added to the ASX in the past two years. The company offers the following services:

1. For Institutional Clients: Wholesale clearing, Banking and custody services

2. For Wholesale Clients: Customized solutions to cater to the demand of clients

In 2016, FinClear acquired the Lonsec Stockbroking and renamed it as FinEx. FinEx offers various services for financial advice business.

Recent activities: FinClear agreed to buy the core technology assets of Dion Global’s Australia operations. Under the deal, FinClear would buy two technology products i.e., post-trade processing system and a trading management and platform system for the planners, stockbrokers, and advisers. Further, the management stated that to fund their acquisition program and further growth, the company is keen to debut on ASX next year.

FinClear, as a part of its agreement with Dion, would offer the software and services to two major banks in the country along with the large investment bank, Sequoia Group, and Pershing. As of now, the group has a total of 20 stockbroking customers including the major names such as PAC partners, Providence Wealth, BNP Paribas and Hobson Wealth in New Zealand.

Key Areas of Focus: The company strives to achieve the Economy of Scale in the clearing and settlement of equities, LICs, ETFs, warrants and various other financial instruments. Additionally, they also focus on bringing down the technology and staffing cost for the companies. FinClear offers the latest user interface excluding the cost of development. The company also offers Back and Middle office outsourcing solutions.

Brands:FinClear comprises of three business units and brands that cater to the natural client/service match. With FinClear being the ‘HeadCo’, three integrated business units are:

•    FinClear – Third party clearing
•    FinEx Wealth
•    FinEx Trade – Electronic ‘low touch/low fee’ offering

Mitigating Challenges: Despite the buoyant Australian share market and healthy retail and institutional inflows, the third-party clearing services in Australia are skewed. There are multiple factors such as complex regulations compared to what it was in 1996. Regulations centered around deemed agreements and credit/reputational risks are something that keep other players at bay. FinClear, on the other hand, has the required technological advancement and expertise to meet up the current challenges. While competitive threats prevail, FinClear will be a good watch.  
 

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