XTB, a
global forex (FX) and contracts for difference (CFDs) broker listed on the
Warsaw Stock Exchange (WSE: XTB), has recently announced the expansion of its
existing offering to include fractional shares and exchange-traded funds
(ETFs).
The new
service has already been made available to customers in several European
countries, with plans to roll out in more jurisdictions in the second quarter
of 2022. XTB confirmed to Finance Magnates that customers in Poland and Spain would soon benefit from the service, most likely in May.
XTB Introduces Fractional
Shares in More Countries
According
to information shared by XTB's press office, the offering of the
fractional shares was first implemented on the company's proprietary platform,
xStation, in Romania and this week also in the Czech Republic, Portugal, and
Slovakia. Initially, it includes access to investing in fractions of the US shares and European ETFs, with plans to expand into additional markets over
time.
Fractional
shares allow investors to purchase a portion of a company's stock, or other
instruments, significantly lowering the barrier to entry into the market. For
example, instead of paying $163 for an Apple share or $320 for a Netflix share,
a retail trader can become the owner of a small portion of a single stock and
earn proportional profits.
Omar
Arnaout, the CEO of XTB, said in a conversation with Finance Magnates that further implementations are proceeding according to plan and should be introduced in two more countries, Poland and Spain, in the next few weeks.
"We are
proceeding according to the planned schedule. I can reveal that the
introduction of Fractional Shares to two additional markets – Poland and Spain
– is just a matter of weeks," XTB's CEO exclusively revealed to Finance Magnates.
Arnaout
disclosed that the launch of the service in the Romanian market was an
operational test of the new product, and XTB is pleased with the results so
far. "The first weeks after introducing fractional shares to our offer can be assessed positively. There is a real interest from investors in this product which is why we are working on expanding the offer to additional countries."
In addition, the CEO of
XTB stated that the offering had not been introduced earlier in Poland, one of the broker's largest markets, as the publicly listed company
was waiting until it could supplement the fractional shares offering with local
stocks, including those from the WSE. Therefore, it can be assumed that Warsaw stocks will soon supplement XTB's fractional shares offering.
"Fractional shares are a response to the needs of the market and the continuously growing interest in investing among increasingly diverse customer groups," Arnaout added. "This product is interesting to both aspiring investors and professional investors."
XTB Sees 215% in 2022
Profits
The
Poland-based broker concluded 2022 with a net profit of EUR 163.3 million, which is a
remarkable increase of 214.4 percent. Operating revenues reached a record high
of EUR 308.1 million, surging from the previous year's EUR 136.7 million. On top of that, the
broker reported record-breaking client metrics last year, including both
active clients and trading activities.
These
exceptional figures were achieved despite a lackluster fourth quarter when
revenue fell by nearly 45 percent quarter-over-quarter. Additionally, Q4 profit
experienced a decline, coming in 79 percent lower than the previous quarter and
27.1 percent below the corresponding quarter (Q4) of 2021.
Recently, Finance
Magnates
interviewed the CEO of XTB, who has been leading the broker since March 2017,
to discuss the 2022 financial results, the increase in client metrics, and
other company developments. The full interview can be found here.
"The
fourth quarter of 2022 was an excellent period for XTB from the operational
perspective," Aranout told Finance Magnates. "We managed the
biggest marketing
Marketing
Marketing is defined as the business process of identifying, anticipating and satisfying customers' needs and wants.This is a crucial element of any operation or brokerage in the financial services space. Well-funded marketing campaigns are instrumental to the survival and longevity of these companies in an increasingly competitive industry.Within the forex space, marketers perform a wide range of functions to help procure, secure, or retain clients.In particular, newer forex brokers also have t
Marketing is defined as the business process of identifying, anticipating and satisfying customers' needs and wants.This is a crucial element of any operation or brokerage in the financial services space. Well-funded marketing campaigns are instrumental to the survival and longevity of these companies in an increasingly competitive industry.Within the forex space, marketers perform a wide range of functions to help procure, secure, or retain clients.In particular, newer forex brokers also have t
Read this Term campaign in the history of the company, onboarding over
50,000 new clients and generating the highest quarterly volume in the history
of XTB."
Fractional Shares on the
Rise, but ESMA Sees Risks
Although
fractional share offerings have gained widespread popularity in recent years
and have been introduced by both US brokerage firms and retail brokers,
according to the European Securities and Markets Authority (ESMA
ESMA
European Securities and Markets Authority (ESMA) is an independent Authority of the European Union that is responsible for the safety, security, and stability of the European Unions’ financial system and is charged with protecting the public. The European supervisory authority for the securities sector, ESMA was established on 1 January 2011. The European Securities and Markets Authority is an independent EU authority based in Paris. It aims to contribute to the effectiveness and stability of t
European Securities and Markets Authority (ESMA) is an independent Authority of the European Union that is responsible for the safety, security, and stability of the European Unions’ financial system and is charged with protecting the public. The European supervisory authority for the securities sector, ESMA was established on 1 January 2011. The European Securities and Markets Authority is an independent EU authority based in Paris. It aims to contribute to the effectiveness and stability of t
Read this Term), they are
associated with excessive risk and the possibility of misleading investors.
As early as
the beginning of 2020, Fidelity Investments, a US broker with 23 million
customers at the time, launched fractional shares and ETF offerings. However,
similar offerings had already emerged a few months earlier due to competition
in the US market from companies like Interactive Brokers and Charles Schwab.
The well-known app Robinhood, which initiated the widespread trend of
zero-commission trading, adopted this new industry practice in late 2019.
During the
Covid-19 pandemic, zero-commission trading on fractional shares was introduced
by other brokers, including FXCM. In addition, firms like Skilling and BUX adopted the
trend in the following months.
However, a
month ago, ESMA issued a warning addressing concerns about investor protection
related to fractional shares. The announcement emphasized that
"derivatives on a fraction of shares" are not equivalent to corporate
shares, and as such, companies should not use the term "fractional shares"
when promoting these products. In compliance with the obligation to enable
clients to comprehend the nature and risks of specific financial instruments
reasonably, companies must clarify to investors that they are purchasing a
derivative product.
XTB, a
global forex (FX) and contracts for difference (CFDs) broker listed on the
Warsaw Stock Exchange (WSE: XTB), has recently announced the expansion of its
existing offering to include fractional shares and exchange-traded funds
(ETFs).
The new
service has already been made available to customers in several European
countries, with plans to roll out in more jurisdictions in the second quarter
of 2022. XTB confirmed to Finance Magnates that customers in Poland and Spain would soon benefit from the service, most likely in May.
XTB Introduces Fractional
Shares in More Countries
According
to information shared by XTB's press office, the offering of the
fractional shares was first implemented on the company's proprietary platform,
xStation, in Romania and this week also in the Czech Republic, Portugal, and
Slovakia. Initially, it includes access to investing in fractions of the US shares and European ETFs, with plans to expand into additional markets over
time.
Fractional
shares allow investors to purchase a portion of a company's stock, or other
instruments, significantly lowering the barrier to entry into the market. For
example, instead of paying $163 for an Apple share or $320 for a Netflix share,
a retail trader can become the owner of a small portion of a single stock and
earn proportional profits.
Omar
Arnaout, the CEO of XTB, said in a conversation with Finance Magnates that further implementations are proceeding according to plan and should be introduced in two more countries, Poland and Spain, in the next few weeks.
"We are
proceeding according to the planned schedule. I can reveal that the
introduction of Fractional Shares to two additional markets – Poland and Spain
– is just a matter of weeks," XTB's CEO exclusively revealed to Finance Magnates.
Arnaout
disclosed that the launch of the service in the Romanian market was an
operational test of the new product, and XTB is pleased with the results so
far. "The first weeks after introducing fractional shares to our offer can be assessed positively. There is a real interest from investors in this product which is why we are working on expanding the offer to additional countries."
In addition, the CEO of
XTB stated that the offering had not been introduced earlier in Poland, one of the broker's largest markets, as the publicly listed company
was waiting until it could supplement the fractional shares offering with local
stocks, including those from the WSE. Therefore, it can be assumed that Warsaw stocks will soon supplement XTB's fractional shares offering.
"Fractional shares are a response to the needs of the market and the continuously growing interest in investing among increasingly diverse customer groups," Arnaout added. "This product is interesting to both aspiring investors and professional investors."
XTB Sees 215% in 2022
Profits
The
Poland-based broker concluded 2022 with a net profit of EUR 163.3 million, which is a
remarkable increase of 214.4 percent. Operating revenues reached a record high
of EUR 308.1 million, surging from the previous year's EUR 136.7 million. On top of that, the
broker reported record-breaking client metrics last year, including both
active clients and trading activities.
These
exceptional figures were achieved despite a lackluster fourth quarter when
revenue fell by nearly 45 percent quarter-over-quarter. Additionally, Q4 profit
experienced a decline, coming in 79 percent lower than the previous quarter and
27.1 percent below the corresponding quarter (Q4) of 2021.
Recently, Finance
Magnates
interviewed the CEO of XTB, who has been leading the broker since March 2017,
to discuss the 2022 financial results, the increase in client metrics, and
other company developments. The full interview can be found here.
"The
fourth quarter of 2022 was an excellent period for XTB from the operational
perspective," Aranout told Finance Magnates. "We managed the
biggest marketing
Marketing
Marketing is defined as the business process of identifying, anticipating and satisfying customers' needs and wants.This is a crucial element of any operation or brokerage in the financial services space. Well-funded marketing campaigns are instrumental to the survival and longevity of these companies in an increasingly competitive industry.Within the forex space, marketers perform a wide range of functions to help procure, secure, or retain clients.In particular, newer forex brokers also have t
Marketing is defined as the business process of identifying, anticipating and satisfying customers' needs and wants.This is a crucial element of any operation or brokerage in the financial services space. Well-funded marketing campaigns are instrumental to the survival and longevity of these companies in an increasingly competitive industry.Within the forex space, marketers perform a wide range of functions to help procure, secure, or retain clients.In particular, newer forex brokers also have t
Read this Term campaign in the history of the company, onboarding over
50,000 new clients and generating the highest quarterly volume in the history
of XTB."
Fractional Shares on the
Rise, but ESMA Sees Risks
Although
fractional share offerings have gained widespread popularity in recent years
and have been introduced by both US brokerage firms and retail brokers,
according to the European Securities and Markets Authority (ESMA
ESMA
European Securities and Markets Authority (ESMA) is an independent Authority of the European Union that is responsible for the safety, security, and stability of the European Unions’ financial system and is charged with protecting the public. The European supervisory authority for the securities sector, ESMA was established on 1 January 2011. The European Securities and Markets Authority is an independent EU authority based in Paris. It aims to contribute to the effectiveness and stability of t
European Securities and Markets Authority (ESMA) is an independent Authority of the European Union that is responsible for the safety, security, and stability of the European Unions’ financial system and is charged with protecting the public. The European supervisory authority for the securities sector, ESMA was established on 1 January 2011. The European Securities and Markets Authority is an independent EU authority based in Paris. It aims to contribute to the effectiveness and stability of t
Read this Term), they are
associated with excessive risk and the possibility of misleading investors.
As early as
the beginning of 2020, Fidelity Investments, a US broker with 23 million
customers at the time, launched fractional shares and ETF offerings. However,
similar offerings had already emerged a few months earlier due to competition
in the US market from companies like Interactive Brokers and Charles Schwab.
The well-known app Robinhood, which initiated the widespread trend of
zero-commission trading, adopted this new industry practice in late 2019.
During the
Covid-19 pandemic, zero-commission trading on fractional shares was introduced
by other brokers, including FXCM. In addition, firms like Skilling and BUX adopted the
trend in the following months.
However, a
month ago, ESMA issued a warning addressing concerns about investor protection
related to fractional shares. The announcement emphasized that
"derivatives on a fraction of shares" are not equivalent to corporate
shares, and as such, companies should not use the term "fractional shares"
when promoting these products. In compliance with the obligation to enable
clients to comprehend the nature and risks of specific financial instruments
reasonably, companies must clarify to investors that they are purchasing a
derivative product.