Fidelity to Take Over Clearing in Canada for Penson
October 1, 2012
Fidelity Clearing Canada said Monday it will handle accounts and assets belonging to Penson Canada’s introducing brokers and portfolio managers.
The agreement involves “referral” clients, with the handover occurring in the last quarter of this year.
Penson Canada is owned by Penson Worldwide, the Dallas provider of clearing services and technology which has been selling off assets in the face of badly deteriorating financial results.
Fidelity Clearing Canada provides services to Canadian institutional, retail and investment management firms.
“This referral agreement allows us to leverage our strengths and scale, grow our organization and provide services to a broader base of clients,” said Todd Roadman, Chief Executive Officer, Fidelity Clearing Canada, said in a statement announcing the agreement.
Fidelity entered the clearing business in Canada three years ago and now serves 20 brokers.
The business is part of Fidelity Investments’s U.S.-based clearing organization, National Financial.
As of June 30, National Financial served nearly 270 broker-dealers representing nearly $410 billion in assets under administration.
Last week, Penson said it would voluntarily delist and deregister its common stock.
The delisting on the NASDAQ Stock Market is expected to take place October 8. After that, the company will move to deregister its stock, with the Securities and Exchange Commission.
Penson has been fighting a huge tailoff in its business since early 2011, when disclosed it possessed $97.4 million of "nonaccruable receivables.”
In the first half of last year, it lost $31.4 million on revenue of $46.5 million. In the first half of this year, it lost $133.6 million on revenue of $22.3 million, according to its second quarter filing with the SEC.