JP Morgan reduces holdings in Plus500 to just under 5%

LeapRate has learned from regulatory filings with the London Stock Exchange that investment house JP Morgan has reduced its holdings in CFD broker Plus500 (PLUS.L) to just under 5% of the company’s outstanding shares.

As of December 9, JPM’s holdings in Plus500 were reduced to 5,738,332 shares (worth about £31.7 million), down from 6,710,399 shares held previously.

We’d note that this doesn’t mean that JP Morgan actually sold any shares. Most of these shares are being held for JP Morgan clients. As some clients prefer to not actually own actual stock (for tax purposes mainly) in certain cases, investment houses such as JP Morgan will buy the shares themselves, and then issue a corresponding CFD to the client. The client will thereby have an effective economic interest in the shares – they’ll make money if they go up, lose money if they go down – while JP Morgan is in fact neutral, earning a fixed fee for buying the shares and issuing the CFD.

The reduction in shares held by JP Morgan might have been share sales, matching any Plus500 CFD sales made by clients. Or, as we’ve seen in the past, it might just be clients already holding CFDs deciding to exchange those CFDs for the real Plus500 shares.

The full regulatory filing can be seen here.

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