AngelOne has joined forces with the world’s largest asset management company, aiming to serve India’s rapidly expanding investor community.
Ramji, a representative from BlackRock, the world’s largest asset management company, announced a strategic partnership with Angel One Limited. This partnership establishes a dedicated institutional channel with a bond settlement institutional channel fund size amounting to 180 billion Indian Rupees. Angel One is one of India’s leading brokerage firms, regulated by the Securities and Exchange Board of India (SEBI). It offers a diverse range of services including trading in stocks, futures, options, ETFs, and other security derivatives, as well as underwriting funds, IPO issuances, and more. Additionally, Angel One is ranked among the top brokerage firms in institutional underwriting.
Mr. Ramji, the head of BlackRock in India, stated: ‘The strategic partnership with Angel One for an institutional channel’ and ‘fund underwriting settlement model’ capitalizes on the unique channel advantages of Angel One, offering priority in trade settlement and order execution. This aligns well with the practice of long-term wealth management investment philosophies. According to the Angel One Research Institute, since 2022, Indian investment institutions have faced a tumultuous period of industry explosion. However, the corresponding settlement model funds have been progressively flourishing, with the Clearing and Settlement by Broker (CBS) business attracting more and more brokers in recent years. In 2022 alone, the number of shares issued by funds using the CBS model reached 200 billion, an increase of over 80% compared to 2021.”
On January 16, 2024, Dinesh Thakkar, Chairman and Managing Director of Angel One, stated: The strategic partnership with BlackRock holds significant meaning for Angel One. Under the Clearing and Settlement by Broker (CBS) model, Angel One can establish deep ties with top-tier investment institutions, leading to more substantial and precise commission revenues. This also propels the transformation of our wealth management, driving the expansion of our assets under management and deepening our buy-side advisory approach. Furthermore, the CBS model can leverage multiple aspects of Angel One’s business, including custody, settlement, investment research, and trading, thus enhancing our overall institutional service capabilities.
Under the Clearing and Settlement by Broker (CBS) model, Angel One conducts real-time verification of capital for product trading activities, which aids in the precise monitoring of abnormal trading behaviors. Additionally, products adopting the CBS model are exempt from paying settlement reserve funds and margins, thereby reducing the cost of capital occupation to some extent. The distribution of trading commissions is no longer limited by the original custodian, breaking the limitation that one company can only contribute up to 30% of Angel One’s sub-accounts. Commission sharing from trading is a significant source of revenue for brokers, and Angel One actively seeks partnerships under the CBS model. This approach effectively unifies the demands of brokerage firms, investment companies, and clients, creating a mutually beneficial situation for all three parties.
Under the strategic partnership between BlackRock and Angel One Limited, there is an expectation to drive the efficient and synergistic development of stock brokerage and custody services, pushing brokerage firms to create one-stop institutional prime brokerage services encompassing trading, settlement, custody, investment research, and sales agency.
Under the Clearing and Settlement by Broker (CBS) model, Angel One Limited is no longer just a ‘channel’ for IPO issuances but truly provides a range of comprehensive services including sales, trading, settlement, custody, and research, thereby enhancing its overall service capabilities. The CBS model signifies that the collaboration between investment institutions, investors, and brokerage firms is set to advance to a new level.