Brokerage group CMC Markets announced on Wednesday that it has launched a new product, which allows traders to access no leverage spread bets.
Called ‘Spectre’, the new product lets professional traders use spread bets without margin.
Consequently a trader could hold a long term position in a spread bet on a stock, index, or other underlying financial instrument, without having to pay stamp duty or capital gains tax.
Traders holding positions in a Spectre account do not have to pay swaps or other costs associated with margin financing.
Instead they pay a set of flat account fees and an FX conversion fee.
| Account maintenance fee | 0.70% annually |
| Position maintenance fee | 0.50% annually |
| FX conversion fee | 0.70% |
The account is only available to professional traders. Whether that could also include wealth managers is unclear to us.
However, the product is a clever move by the London-listed broker. Aside from coming out with something different, the account could prove extremely attractive to higher net worth clients in the UK.
There are tax-efficient accounts in the UK, but there are annual caps on them, which a high earner could easily max out very quickly.
If you were to, for example, hold a large position in an ETF with this product, you could get long-term passive exposure and pay no capital gains tax on it.
With more tax hikes in the news as well, it’s plausible the launch will create some hype that could help the broker see more in flows.
