ABN AMRO launches fractional investing infrastrucutre, BUX is first broker client
“The launch of fractional investing marks an important new chapter in the normalization of investing in Europe.”
ABN AMRO Clearing has built a new infrastructure for brokers to allow fractional investing by their end clients as this novel method – investing in part of a share, instead of needing to buy a full share – gains prominence within the trading industry.
Dutch neobroker BUX, which has announced the addition of fractional trading capabilities on its platform earlier this month, is ABN AMRO Clearing’s first client to start using this new feature.
Normalization of investing in Europe
The new infrastructure has been an immediate hit, and BUX’s clients have already made over ten thousand fractional investments during the first nine days of the new feature being available on BUX Zero, according to the official statement.
Rutger Schellens, Chief Executive Officer of ABN AMRO Clearing, said: Smart and reliable technologies are creating more and more opportunities for customized investor services. We are active in the business-to-business segment and offer services to retail brokers such as BUX. These innovations help us to retain clients and further boost our impact and income.”
Yorick Naeff, Chief Executive Officer at BUX, added: “The launch of fractional investing marks an important new chapter in the normalization of investing in Europe. As the first Dutch broker to offer fractional investing in individual stocks to retail investors, BUX continues to lead the evolution of neobrokerage in Europe.
Fractional investing has its roots in the United States
Fractional investing is hugely popular in the United States, the jurisdiction that saw the rise of this novel method with DriveWealth being probably the largest provider of this infrastructure.
A few European brokers have already joined the phenomenon and selected a US-based vendor in order to add the technology, but the legal and supervisory hurdles that this involves has led ABN AMRO Clearing to develop its own infrastructure to offer in Europe.
ABN AMRO Clearing’s fractional investing offering covers US equities for now, but the new service will soon make fractional trade possible in European shares too.
BUX has also partnered with ABN AMRO Clearing for its banking as a service product, so the broker’s clients can handle their investments from a bank account.
The addition of fractional investing has expanded its banking as a service to allow investors to use their accounts to buy and sell both full shares and fractional shares.
Each fractional purchase made by an investor is meticulously tracked by a cloud-based administration system, without ABN AMRO needing to buy more than one additional full share per fund.