The deal between RBS and CMC – which I called a white-label solution but which a reader pointed out to me is actually an introducing broker agreement – has been gossiped about for months. Clearly, RBS has decided on a soft launch. In fact, it’s been so soft that when I rang up RBS Spread Trader this week the young man on the end of the phone answered: “CMC Markets.”
“Do what?” I replied. “I thought that was RBS?” At this point he started to flap. But he’ll get the hang of it as volumes pick up, which I’m sure they will do.
For readers not familiar with the UK retail market, the spread betters, such as CMC Markets, have done a fantastic job at repackaging sometime complex or inaccessible products and taking them to a wider audience. They spotted a gap in the market, filled it successfully and now it is no surprise that the big banks are trying to get in on the act.
“I believe this to be a significant liaison. With HBOS trading CFDs through an existing spread-betting bookmaker and Barclays already engaged in spread betting, this deal is an acknowledgement that spread betting no longer has a social stigma. It is a serious financial derivative and is here to stay,” says David Buik, head of PR at Cantor Index.
FX is very much a mainstream product of the spread betters. In the UK, there is an arcane rule that anyone can bet; trading requires more knowledge. It’s a bit daft, as you can do your cods in both. Anyway, once experience has been gained betting, then you can move on to trading. It’s a slightly anachronistic approach that does hamper to some extent other, mainly foreign, companies who don’t provide betting. However, the UK has not seen anywhere near the same number of scandals as the US, for instance, perhaps vindicating the existing rules and regulations.
Anyway, next week will see the launch in the UK of ABN Amro’s marketindex product, which it has white-labelled from Oanda (see Euromoney July 2006). There are also at least two big white labels in the offering that I expect to report on soon – apparently I just have to wait for the ink to dry.
