Publically listed brokers are rare. Only a handful, including IG Group, Plus500, CMC Markets, Interactive Brokers, Swissquote, Admirals, XTB and a few others dominate the space.
The short list of publicly-listed brokers has remained unchanged since 2016 when XTB debuted on the Warsaw Stock Exchange.
But with the huge spike in online trading in the last decade, why are so few brokers publically listed, and could we see a buck in the trend any time soon?
There are many reasons why large players in the FX/CFD industry are choosing not to go public. It's simply not as enticing for them as you may think. One primary factor is the transparency that public companies are required to maintain when going public.
Many brokers prefer to operate privately to avoid the disclosure requirements that public firms face, which include revealing financial performance, business practices, and handling of client trades (e.g. whether they use an A-book or B-book model).
These disclosures can expose proprietary information or operational details that brokers might prefer to keep private.
There are also technical challenges.
According to Andrew Saks, many brokers operate on third-party platforms, which complicates the process of going public. Public companies are often expected to have proprietary infrastructure, as relying on external platforms can signal operational limitations and impact investor confidence.
The FX/CFD market itself has also seen rapid consolidation. Larger players are acquiring smaller firms, and brokers rely more on private financing and mergers than on public listings. This consolidation allows brokers to scale without the rigorous demands of public markets.
For example, over recent years, ThinkMarkets secured $40 million in private funding, while eToro attracted substantial investment to fuel its expansion, providing these firms with growth capital without the pressures of public ownership.
One broker that may disrupt this trend is eToro. CEO Yoni Assia has expressed interest in exploring the public markets, describing it as a matter of “when” rather than “if.” eToro initially planned to go public through a SPAC merger, though that deal ultimately fell through.
Despite this, Assia confirmed that eToro remains open to a public listing, which could potentially make it one of the most notable brokers to join the public markets in recent years.
With over $630 million in revenue reported in 2023 and over $100 million in EBITDA, eToro is in a strong financial position for an IPO. As a multi-asset broker, eToro’s public listing would give it a competitive edge by offering increased visibility and access to institutional investors.
If successful, eToro’s IPO could pave the way for other brokers considering the transition, showing that a public listing is a viable path for growth and expansion.
Pros
For brokers, going public offers a range of benefits, primarily the ability to raise substantial capital rapidly. Public listings can attract high-net-worth retail clients and institutional investors who prefer dealing with a regulated, transparent entity.
Moreover, going public allows original investors and founders to exit partially or fully, freeing up capital for reinvestment. It also enables companies to fund acquisitions, expand product lines, and enhance technology infrastructure.
For traders, trading with a publicly listed broker can offer reassurance, as these companies are subject to stringent regulatory scrutiny, operational transparency, and regular financial audits.
Cons
Public companies face increased costs, including legal, compliance, and reporting expenses, which can reach up to ten times higher than those incurred by private firms.
Senior management also faces added pressure from shareholders and analysts, which can drive short-term decision-making that may not align with the long-term interests of the business or its clients.
The "spotlight" effect of being publicly listed can work against a company if it faces financial struggles or regulatory challenges, as seen in the past with other financial institutions.
For brokers looking to enter and succeed as a public company, they must demonstrate earnings stability, strong governance, and a clear growth plan. Public investors prefer companies with predictable revenues and growth trajectories, which can be difficult in an industry as volatile as FX/CFD trading.
To maintain investor confidence, brokers must be able to manage earnings predictably, keeping financial outcomes less reliant on market fluctuations.
Building a strong team of professionals in risk management, compliance, and sales is equally essential. Public companies are held to high standards of governance, and robust internal structures are necessary to meet these expectations.
Additionally, brokers need a scalable growth plan, with many choosing to diversify by adding new asset classes like equities and cryptocurrencies or expanding into new geographical markets.
For traders, the benefits of trading with a publicly listed broker can be compelling. Public brokers are more likely to adhere to rigorous standards of transparency and client protection, reducing the risk of operational misconduct.
With access to regular financial reports and disclosures, traders can make more informed decisions about the broker they choose to trust with their investments. Additionally, publicly listed brokers are held to higher liquidity and capital requirements, which contributes to a more stable trading environment for clients.
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