BBY Limited

Last updated

BBY Limited
Type Private
Industry Financial services
Founded1987
FounderJ. William Burdett [1]
Defunct2015
Headquarters Sydney, Australia
Key people
Glenn Rosewall
Executive Chairman

Ken Rosewall
Non-Executive Director

David Perkins
Non-Executive Director
ProductsOnline Trading
Financial Services
Investment Banking
Sales & Trading
Research
Asset Management
Wealth Management
Broker Dealer Services
Website www.bby.com.au
www.bby.co.nz

BBY Ltd was an Australian stock broking, corporate advisory and asset management firm. Prior to its voluntary administration on 18 May 2015, it claimed to be the largest independent stockbroker in Australia and New Zealand by market share. [2] The group provided financial and advisory services to emerging companies and their investors including corporate finance, research, sales & trading, asset management and broker dealer services. [3]

Contents

History

Foundation and early years

BBY, formerly known as Burdett Buckeridge Young, was established in 1987 by three former A.C. Goode & Co. brokers, in conjunction with the State Bank of Victoria. The acquisition of State Bank by the Commonwealth Bank in the early 1990s saw the disposal of their interest and subsequently Jefferies & Co acquired an equity stake in the firm.

BBY went on to established institutional broking and capital raising services on the back of its research platform. The company's head office is in Sydney with offices in Adelaide, Auckland, Brisbane, Gold Coast, London, Melbourne, New York City, Perth and Wellington.

In 2005 the Australian Securities & Investments Commission (ASIC) issued a warning against BBY for allegedly failing to manage conflicts of interest for publishing positive research about a corporate client it was advising. ASIC imposed special conditions on BBY's financial services licence. [4]

Expansion and acquisitions

In 2006, the company completed the acquisition of Jaguar Asset Management Ltd. [5] Two years earlier, in 2004, the two companies had entered into a strategic alliance, under which Jaguar managing director Glenn Rosewall was appointed chief executive officer of BBY. [6]

In 2008, the company also won the Best Corporate Deal of the year in The Australian Stockbrokers Foundation Hall of Fame 2008. [7] Soon afterwards, BBY established a partnership with CIMB, Malaysia's second largest financial services provider, and fifth largest in Southeast Asia by total assets.

By 2010, BBY averaged client orders per day greater than $150 million, placing it as Australia's fourth-largest domiciled stockbroker. [8]

In 2011, BBY acquired the private client advisor network from Australian-based StoneBridgeGroup. Combined, BBY and StoneBridge's private client businesses host more than 80 advisers, plus support staff. Services offered include equities and options trading, futures, warrants, over the counter trading, currency, funds management, portfolio administration and reporting. [9] Shortly after completing the StoneBridge acquisition, BBY began self-clearing with GBST's equities clearing and settlement platform, Shares. BBY moved to the fully integrated version of GBST Shares, which includes derivatives, shares, risk, front office and infrastructure hosting and is expected to provide greater scale for the BBY business. [10] BBY continued to rank ninth in the "Best Overall Investment Bank" survey by East Coles. [11]

As of June 2012, BBY was ranked 10th overall in Australia by equity volume. [12] BBY achieved its best rankings to date in the 2013 East Coles Independent Bank Survey, winning Best Investment Firm, Best Equity Capital Markets Firm and Best Equities Research. [2]

In 2013, BBY acquired a majority stake in New Zealand's "Edge Capital" and subsequently opened up its offices in Auckland and Wellington. [13] BBY won the Best Investment Firm, Best Equity Capital Markets Firm and Best Equities Research in the 2013 Coles Independent Investment Bank Survey, while also becoming the first broker to break through the $1 million mark for a single order on Chi-X Australia. As of 2013, BBY has over 110 client advisors and 300 broker dealer advisors. [2]

A year after the acquisition of New Zealand private client advisory firm Edge Capital, BBY launched its China Desk. The BBY China team deals with Chinese expatriates, as well as Mainland Chinese clients. In early 2014, BBY was announced the winner of a bronze Stevie Award for the Best Management Team across the Asia-Pacific region. [14]

Failure

On 11 June 2014, BBY acquired $192 million of Aquila Resources (ASX: AQA) shares on behalf of a client ("AQA Transaction"). [15]

On 12 June 2014, as a consequence of the AQA Transaction and its other open positions, BBY was due to be called approximately $40m of margins by ASX Clear, consisting of approximately $18 million of Initial Margin, $7m of Variation Margin and a $15m CBPL additional margin payment. [15]

That day, the ASX advised BBY that to prevent it from committing an event of default and suffering a possible insolvency event, it would delay making the full CBPL call of $15m but would be making an additional CBPL call for only $5m, which represented the full balance of funds available to BBY at that time. [15]

The ASX oversees compliance with its own operating rules and is legally obliged under the Corporations Act to notify ASIC of various matters, including the suspected contravention of ASX operating rules or the Corporations Act, and any matter that may adversely affect the ability of a market participant to meet its obligations as a financial services licensee. [15]

The ASX did not inform ASIC that BBY would fail to meet the additional CBPL payment required under ASX operating rules. [15]

The ASX did not inform ASIC that it pro-actively offered to waive BBY's compliance with this rule to prevent BBY from committing an event of default and suffering a possible insolvency event. [15]

On 18 May 2015, the BBY companies were placed into voluntary administration, [16] [17] with certain of them placed into liquidation on 21 June. [18]

On 12 June 2015, BBY administrator KPMG made a preliminary finding that "BBY, and others of the BBY Companies as a result, became insolvent on or around 11 or 12 June 2014 when BBY executed the AQA trade". [15]

Related Research Articles

<span class="mw-page-title-main">Leveraged buyout</span> Acquired control over a company by the purchase of its shares with borrowed money

A leveraged buyout (LBO) is one company's acquisition of another company using a significant amount of borrowed money (leverage) to meet the cost of acquisition. The assets of the company being acquired are often used as collateral for the loans, along with the assets of the acquiring company. The use of debt, which normally has a lower cost of capital than equity, serves to reduce the overall cost of financing the acquisition.

<span class="mw-page-title-main">Investment banking</span> Type of financial services company

Investment banking pertains to certain activities of a financial services company or a corporate division that consist in advisory-based financial transactions on behalf of individuals, corporations, and governments. Traditionally associated with corporate finance, such a bank might assist in raising financial capital by underwriting or acting as the client's agent in the issuance of debt or equity securities. An investment bank may also assist companies involved in mergers and acquisitions (M&A) and provide ancillary services such as market making, trading of derivatives and equity securities, FICC services or research. Most investment banks maintain prime brokerage and asset management departments in conjunction with their investment research businesses. As an industry, it is broken up into the Bulge Bracket, Middle Market, and boutique market.

<span class="mw-page-title-main">Australian Securities Exchange</span> Australian share market operator

Australian Securities Exchange Ltd (ASX) is an Australian public company that operates Australia's primary securities exchange, the Australian Securities Exchange. The ASX was formed on 1 April 1987, through incorporation under legislation of the Australian Parliament as an amalgamation of the six state securities exchanges, and merged with the Sydney Futures Exchange in 2006.

<span class="mw-page-title-main">Financial services</span> Economic service provided by the finance industry

Financial services are economic services tied to finance provided by financial institutions. Financial services encompass a broad range of service sector activities, especially as concerns financial management and consumer finance.

In finance, a contract for difference (CFD) is a legally binding agreement that creates, defines, and governs mutual rights and obligations between two parties, typically described as "buyer" and "seller", stipulating that the buyer will pay to the seller the difference between the current value of an asset and its value at contract time. If the closing trade price is higher than the opening price, then the seller will pay the buyer the difference, and that will be the buyer's profit. The opposite is also true. That is, if the current asset price is lower at the exit price than the value at the contract's opening, then the seller, rather than the buyer, will benefit from the difference.

Prime brokerage is the generic term for a bundled package of services offered by investment banks, wealth management firms, and securities dealers to hedge funds which need the ability to borrow securities and cash in order to be able to invest on a netted basis and achieve an absolute return. The prime broker provides a centralized securities clearing facility for the hedge fund so the hedge fund's collateral requirements are netted across all deals handled by the prime broker. These two features are advantageous to their clients.

<span class="mw-page-title-main">Saxo Bank</span> Danish investment bank

Saxo Bank is a Danish investment bank specializing in online trading and investment. It was founded as a brokerage firm in 1992, under the name Midas Fondsmæglerselskab, by Lars Seier Christensen, Kim Fournais, and Marc Hauschildt. The name was changed to Saxo when the company obtained a banking license in 2001. Saxo offers trading through its online platforms in Forex, stocks, CFDs, futures, funds, bonds, and futures spreads. The company functions as an online broker with a bank license, without offering traditional banking products. According to Saxo, roughly half of its activities are derived from partnerships with institutional trading partners. More than 100 financial institutions globally service their end clients with Saxo Bank's platforms on a white-label basis

<span class="mw-page-title-main">Stifel</span> American investment bank

Stifel Financial Corp. is an American multinational independent investment bank and financial services company created under the Stifel name in July 1983 and listed on the New York Stock Exchange on November 24, 1986. Its predecessor company was founded in 1890 as the Altheimer and Rawlings Investment Company and is headquartered in downtown St. Louis, Missouri.

<span class="mw-page-title-main">Baird (investment bank)</span> American investment firm

Robert W. Baird & Co. is an American multinational independent investment firm and financial services company. It is the principal U.S. operating subsidiary of Baird, an international, employee-owned financial services firm providing investment banking, capital markets, private equity, wealth management, and asset management services to individuals, corporations, institutional investors, and municipalities.

<span class="mw-page-title-main">Macquarie Group</span> Australian investment bank and financial services company

Macquarie Group Limited is an Australian global financial services group. Headquartered and listed in Australia, Macquarie employs more than 20,000 staff in 34 markets, is the world's largest infrastructure asset manager and Australia's top ranked mergers and acquisitions adviser, with more than A$871 billion in assets under management.

<span class="mw-page-title-main">Canaccord Genuity</span> Canadian financial company

Canaccord Genuity Group Inc. is a global, full-service investment banking and financial services company that specializes in wealth management and brokerage in capital markets. It is the largest independent investment dealer in Canada. The firm focuses on growth companies, with operations in 10 countries worldwide and the ability to list companies on 10 stock exchanges. Canaccord Genuity, the international capital markets division, is based in Canada, with offices in the US, the UK, France, Germany, Ireland, Hong Kong, China, Singapore, Dubai, Australia, and Barbados.

<span class="mw-page-title-main">Oppenheimer Holdings</span> American multinational independent investment bank

Oppenheimer Holdings Inc. is an American multinational independent investment bank and financial services company offering investment banking, financial advisory services, capital markets services, asset management, wealth management, and related products and services worldwide. The company, which once occupied the One World Financial Center building in Manhattan, now bases its operations at 85 Broad Street in New York City.

<span class="mw-page-title-main">DBFX</span> Deutsche Bank foreign exchange trading platform

dbFX was Deutsche Bank’s online margin foreign exchange trading platform and service for individual and institutional investors including financial institutions, hedge funds, corporations, asset managers, money managers, commodity trading advisors, broker-dealers, brokerage firms, high net worth individuals, and sophisticated and professional traders, which operated from 2006-2011.

<span class="mw-page-title-main">UBS</span> Multinational investment bank headquartered in Switzerland

UBS Group AG is a multinational investment bank and financial services company founded and based in Switzerland. Co-headquartered in the cities of Zürich and Basel, it maintains a presence in all major financial centres as the largest Swiss banking institution and the largest private bank in the world. UBS client services are known for their strict bank–client confidentiality and culture of banking secrecy. Because of the bank's large positions in the Americas, EMEA, and Asia Pacific markets, the Financial Stability Board considers it a global systemically important bank.

IIFL Finance Limited d/b/a IIFL and India Infoline Finance Limited, is an Indian diversified financial services company headquartered in Mumbai. The organisation was founded by Nirmal Jain. IIFL and its group companies are backed by Canadian investor Prem Watsa, private equity firm General Atlantic and CDC Group, the UK Government's private equity arm. IIFL is ranked among the top seven financial conglomerates in India and as the top independent financial services firm in India in terms of market capitalisation. Nirmal Jain is the chairman of the group, while R Venkataraman is the group managing director and co-promoter.

Betashares is a leading Australian provider of exchange-traded funds (ETFs). The company manages the broadest range of ETFs in Australia across major assets classes. Betashares is based in Sydney, Australia with offices in Melbourne, Brisbane and Perth.

<span class="mw-page-title-main">La Trobe Financial</span>

La Trobe Financial is an Australian credit asset management firm specialising in asset management and credit. It offers real estate credit, investment account offerings and private wealth management. The CEO is Mr. Chris Andrews. La Trobe Financial's head office is located in Melbourne, with corporate offices in Sydney, Shanghai and Hong Kong.

<span class="mw-page-title-main">Securities market participants (United States)</span>

Securities market participants in the United States include corporations and governments issuing securities, persons and corporations buying and selling a security, the broker-dealers and exchanges which facilitate such trading, banks which safe keep assets, and regulators who monitor the markets' activities. Investors buy and sell through broker-dealers and have their assets retained by either their executing broker-dealer, a custodian bank or a prime broker. These transactions take place in the environment of equity and equity options exchanges, regulated by the U.S. Securities and Exchange Commission (SEC), or derivative exchanges, regulated by the Commodity Futures Trading Commission (CFTC). For transactions involving stocks and bonds, transfer agents assure that the ownership in each transaction is properly assigned to and held on behalf of each investor.

<span class="mw-page-title-main">CI Financial</span> Largest investment management firm by assets under management in Canada

CI Financial is the largest investment management firm by assets under management in Canada. Based in Toronto, Ontario, it offers investment management and wealth management services targeted to high net worth retail investors, as well as brokerage and trading services to portfolio managers and institutional investors. It is considered one of the Big Three investment management companies in Canada, along with Mackenzie Investments and Fiera Capital.

Kepler Cheuvreux is an independent European financial services company specializing in research, execution, advisory, and asset management services. Kepler Cheuvreux has 12 offices in Europe, 2 offices in the United States, and 600 employees worldwide.

References

  1. ↑ J. William Burdett Profile Archived 11 March 2012 at the Wayback Machine . Forbes
  2. 1 2 3 "* Australia's Leading Stock Broker Firm - BBY Stock Brokers". Archived from the original on 30 April 2013. Retrieved 26 April 2013.
  3. ↑ BusinessWeek BBY Limited Company Overview
  4. ↑ Chinese wall fails: ASIC intervenes at broking house Sydney Morning Herald 22 September 2005
  5. ↑ "Jaguar Funds About Us". Archived from the original on 4 December 2008. Retrieved 15 January 2009.
  6. ↑ Rosewall takes BBY post in Jaguar deal. Sydney Morning Herald, 18 September 2004
  7. ↑ Archived 20 October 2009 at the Wayback Machine
  8. ↑ http://www.bby.com.au/Portals/0/BBY/PDF/News/Resource%20Stocks%20Magazine%2027jul10.pdf Archived 28 February 2011 at the Wayback Machine , Client Relationships The Highest Order - Resourcestocks Magazine
  9. ↑ "BBY expands with Stonebridge acquisition". Financial Standard. 14 June 2011. Retrieved 15 June 2012.
  10. ↑ "Broker BBY Limited Begins Self-Clearing with GBST Platform - GC Australia". Australia.globalcustodian.com. 6 June 2012. Archived from the original on 24 January 2013. Retrieved 15 June 2012.
  11. ↑ "Archived copy" (PDF). Archived from the original (PDF) on 20 March 2012. Retrieved 14 June 2012.{{cite web}}: CS1 maint: archived copy as title (link)
  12. ↑ IRESS
  13. ↑ BBY snaps up NZ Edge Capital Australian Financial Review
  14. ↑ "BBY Wins a Stevie® Award for Management Team of the Year". Archived from the original on 26 June 2014. Retrieved 4 August 2014.
  15. 1 2 3 4 5 6 7 "BBY Ltd (in administration) Administrators' Report to Creditors 12 June 2015" (PDF). KPMG. 9 August 2021.
  16. ↑ "Clients of stockbroker BBY scramble to save positions". 18 May 2015.
  17. ↑ Elysse Morgan, Michael Janda and Ian Verrender (19 May 2015). "BBY administration leaves brokers, investors and staff in limbo". ABC News .
  18. ↑ Joyce Moullakis (22 June 2015). "BBY liquidator seeks funds to pursue directors". The Sydney Morning Herald.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.