Citypoint Trading, an established FX and CFD firm based in the City of London has been fully acquired by Allen Market Limited, a UK based holding company owned by Chinese investor Zhijian Wang.
The acquisition has been confirmed by Salam Alaswad, co-founder and CEO of Citypoint, “This acquisition reflects the strength of the strategic position Citypoint has built in the industry over many years. We will now be in an even stronger position to provide enhanced services for our global portfolio of clients.”
Wang echoed these sentiments and has confirmed that significant resources will be made available for Citypoint to thrive as a global leader in the sector competing with the established CFD brokers.
The consideration of the deal has not been disclosed to the public. The company is increasing its share capital to meet expansion plans which include but are not limited to enhance client’s experience through implementation of advanced technologies and effective support for B2B business. Other senior executives at the firm are Nick Lewis who is as Risk & Commercial director and Samer Shah who is the broker’s Finance director.
As the retail forex and CFDs market is changing, brokers are looking to adapt to the new regulatory environment. Firms are split into two groups: those that choose to close down their operations and look for an exit from the market and those that commit to raising additional capital to remain competitive despite the new rules which the ESMA mandated earlier this spring.
Having an FCA license remains lucrative for brokers that are not only willing to target clients within the EU, but are also focused on building a global brand. Higher leverage requirements and a shifting marketing environment are making the business more capital intensive and demanding.
During the past couple of months, the M&A market in Europe has been well and alive. With too many brokerage licenses on sale, however, it’s a buyers market. Interest is mainly on the part of companies that are currently operating outside of the EU and do not have another European license.
The consolidation of the market has been the theme after the implementation of ESMA’s new rules. Some brokers from the industry are already working on developing alternative products that could mitigate the impact from the new EU-wide framework.