Penson Worldwide has entered into an expanded master services agreement (MSA) with Broadridge Financial Solutions.
The amendment to the MSA, among other things, expands the scope of business processing services that Penson will outsource to Broadridge and permits the MSA Schedule applicable to Penson’s United Kingdom subsidiary to be terminated without penalty.
Broadridge made a payment to Penson of $7 million to cover costs incurred by Penson and its affiliates in connection with the conversions to the Broadridge platform connection, and in connection with the signing of the amendment agreement to the MSA and the expansion of various services subject to the MSA.
“Our MSA with Broadridge strengthens the relationship between the two companies, provides immediate benefits to Penson, the opportunity for additional long-term cost savings and continues our progress with the strategic initiatives we announced in August, which are intended to reduce costs and debt, increase profitability and capital, and better position the company for growth,” said Philip Pendergraft, chief executive officer of Penson.
In September, Penson completed the combination of its US broker-dealer and US futures businesses into a single entity to facilitate more efficient use of capital and infrastructure. Penson’s Canadian subsidiary also successfully completed the conversion of Penson’s Canadian correspondents to the Broadridge technology platform earlier this year.
(JDC)