IG Group, a spread betting and CFD trading provider based in London has agreed to acquire the futures exchange Small Exchange from Foris DAX Markets, the parent company of Crypto.com. The deal follows IG Group’s sale of its 39% stake in the Chicago-based exchange a year ago and its subsequent sale of the subsidiary North American Derivatives Exchange (NADEX) in December 2021.
IG Group CEO, June Felix, had previously noted that the sale of Small Exchange and NADEX would enable the company to focus on expanding its US options and future business through its tastytrade and tastyworks franchises. However, IG Group has now announced its plans to reintegrate Small Exchange into its network, stating that the acquisition will allow the company to expand its range of products and services for retail investors and traders in the US, as well as leverage Small Exchange’s advanced trading technology.
Small Exchange was launched in 2019 and is known for its world-class trading system, risk-monitoring system, and matching engine. IG Group’s acquisition of the platform will provide the company with additional capabilities to serve its US customer base and support its growth strategy. With this move, IG Group is expected to further solidify its position as a leading provider of financial services and trading technology in the US market.
IG Group, despite being headquartered in the UK, has established a strong presence in the United States through its various subsidiaries and platforms. The company runs tastylive, a Chicago-based financial content network catering to traders and investors, as well as tastytrade, an online platform for trading in options, futures, and stocks. Additionally, the group operates IG North America, IG US, and tasty software solutions.
The Market State
IG Group’s recent acquisition of Small Exchange, a futures exchange platform, is expected to support the company’s growth strategy and enable it to expand its range of products and services for retail investors and traders in the US. Small Exchange, which is registered as a Designated Contract Market with the US Commodity Futures Trading Commission, is known for its advanced trading technology and risk-monitoring system.
Tom Sosnoff, the Founder of tastylive, expressed confidence in the future of market structure in the US, stating that the company can build an exchange that will scale and become a market leader over the next decade.
Meanwhile, IG Group has initiated the third tranche of its share buyback program, which aims to reduce the company’s share capital. This follows the £150 million program announced in July 2022 and the £50 million extension in January 2023.
The US Securities and Exchange Commission recently highlighted that DailyFX, a trading news portal owned by IG Group, is not allowed to solicit investments from investors. However, IG Group clarified that the portal is designated for European and Asian traders.