Interactive Brokers LLC (NASDAQ:IBKR) will use Singapore-based fintech company Smartkarma to provide third-party Asian equity research to its professional investors, the company said in a statement.
The collaboration is a first between Smartkarma – which operates a digital marketplace and provides investment insight into Asian markets – and a US brokerage house. Specifically, Interactive Brokers joins other big brokers that effectively outsource research provision to independent third parties, which signals how trading services providers rethink their research franchises.
Through this collaboration with Smartkarma, Interactive Brokers’ clients will be able to communicate with analysts, monitor sentiment, compare industry performance, which will enhance their understanding and accessibility to over 3,600 companies globally.
Interactive Brokers said the tie-up would focus on price, speed, diversity of global products, and providing advanced trading tools.
Smartkarma capitalizes on new research regulations
Smartkarma, which distributes research from about 400 analysts over an online platform, wants to capitalize on new rules requiring investors and money managers to pay for research separately from broking services.
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The company is expanding to offer analysis on US and European financial markets and has been encouraged by the positive response to its Asian product since the firm started a few years ago.
In 2018, Smartkarma partnered with Singapore Exchange (SGX) to create a C-Suite pilot program. The company has also signed big investment banks including Societe Generale which tapped into Smartkarma product to provide Asian equity research to its clients.
Smartkarma pays its analysts fees based on the popularity of their research among its subscribers, while charges an annual flat fee of nearly $7,000 per user.
Commenting on the news, Warren Yeh, Head of Smartkarma US, said, “Working together with Interactive Brokers, we can offer a compelling solution for their clients looking for differentiated, independent Insight on Asian markets. Our expert, in-country Insight Providers and our service offerings, from published research to calls and bespoke projects and modelling, can all support Interactive Brokers’ client base and their research needs.”
Yochai Korn, Global Head of Market Data and Research at Interactive Brokers, added “We are delighted to work with Smartkarma and offer our clients the independent, minute-by-minute Insight and analysis available on the Smartkarma platform. Our focus on price, speed, diversity of global products, and providing advanced trading tools aligns strongly with Smartkarma’s innovative digital platform and direct access to Insight Providers, helping our clients to make informed trading decisions.”