Knight Adds FCM with Acquisition of Penson Futures

Electronic execution services provider Knight Capital Group, based in Jersey City, NJ, has announced the acquisition of Penson Futures, a futures commission merchant (FCM) and division of Penson Financial Services, for $5 million in cash, about half of which will cover its equipment and exchange memberships, and future earn-outs based on results over the next three years.

Besides operating its own electronic futures trading platform, Penson Futures provides execution, clearing, and custoday services for brokers, institutions and non-clearing FCMs on futures and options exchanges in the US and Europe, as well as risk management and consultation services.

Following regulatory approval, the FCM will operate as a division of Knight Execution and Clearing Services, and will be a member of the Chicago Board of Trade, the Chicago Mercantile Exchange, the Kansas City Board of Trade, NYSE Euronext Liffe, the Minneapolis Grain Exchange, Nymex, Comex, ICE Futures US, ICE Clear Europe, NYSE Liffe, One Chicago and LCH.Clearnet.

"Futures trading is increasingly moving toward an electronic, exchange-based model. With the acquisition of Penson Futures, Knight fills a strategic gap in the client offering with a top 30 FCM in the U.S.," says Tom Joyce, chairman and CEO at Knight Capital Group.