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Algoweb and London Capital Group May Strike a Software Licensing Deal

By Alisen Downey, TMCnet Web Editor

In our increasingly digitized world today, finding the right software and provider is essential to running operations smoothly. Companies are constantly seeking new and better solutions to improve workflow and increase efficiency. It’s no surprise, then, that strong relationships between companies and the software developers that license solutions to them are a necessary part of doing business.

Algoweb, which develops technology for use in financial markets, may soon be entering into a software licensing agreement with spread betting and CFD provider London Capital Group (LCG). Algoweb offers a platform with a full FX trading stack for direct access, low-latency aggregation and smart order routing services to liquidity providers. As such, the license agreement would provide LCG with a straight line to liquidity providers’ aggregation and smart order routing features.

Among the many benefits to the proposed agreement, the primary aim would be that LCG would be able to offer better pricing, tighter spreads and a greater depth for execution. The need to improve LCG’s execution capabilities is great, according to the company’s higher-ups, who believe that installing software from Algoweb would be an immediate help to LCG’s issues.

“The independent directors believe that, in line with the company's strategy, the agreement offers access to international wholesale FX markets and presents an opportunity for the company to significantly expand and diversify its customer base,” LCG said in a statement regarding the agreement proposal.

Algoweb would provide software programs including the Smarttrade and Algoweb add-ins, and the deal may also include the licensing of a straight-through processing (STP) trading solution. 

After completing due diligence for the proposed licensing, LCG is now proposing that it will enter into an initial three-year agreement with Algoweb. However, because the founders of Algoweb own a 50 percent share of the company, any Algoweb software licensing agreements must first be approved by the company’s shareholders. 

LCG will reportedly pay Algoweb £780,000 (or approximately $1.3 million) once the agreement has officially taken effect, and £300,000 ($489,612) payable in advance of each financial quarter beginning Oct. 1. The initial term of the deal will expire on Sept. 30, 2017.