Plus500 confident it can deal with FCA crackdown and commits to London

William Turvill
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Plus500 recently extended its sponsorship partnership with Atletico Madrid (Source: Getty)

Spreadbetting firm Plus500 saw its shares jump three per cent today as the company indicated it was well placed to deal with regulatory pressures presented by the City watchdog.

Plus500’s chief executive also told City A.M. that the London-listed company will not be seeking to shift resources away from the UK, despite Financial Conduct Authority (FCA) plans for a crackdown on contracts for difference (CFD) products.

The company, which sponsors Spanish football giant Atletico Madrid, today reported revenues of $327.9m (£262m) in 2016, up 19 per cent on 2015. Earnings before interest, taxation, depreciation and amortisation (Ebitda) were also up 14 per cent to $151m.

Read more: Plus500 shares jump after dismissing German restrictions

Plus500’s shares, in common with rivals such as IG Group and CMC Markets, were battered when the FCA announced its CFD plans in December, falling from around 600p to less than 340p. Today, they jumped more than three per cent to 440p.

Plus500 Plus500 | mobile image

In response to the FCA action, IG, CMC and other spreadbetting firms are drawing up a code of conduct in a bid to appease the watchdog.

Plus500 chief executive Asaf Elimelech told City A.M. his company is not a part of this effort, preferring to deal with the FCA on its own for now.

CMC Markets is also considering moving its headquarters from London depending on the severity of the FCA rules.

Read more: Spreadbetting lobby group plots bid to appease FCA amid industry crackdown

But Elimelech said Plus500, which is headquartered in Israel but has a regulated entity in the UK, will not be seeking to make any changes.

“There is no intention from us to shift it or to make any change to the way we operate here in the UK,” he told City A.M. “We see the FCA licence, the UK licence, as an important asset to the company, and we see it as important to maintain our UK customers.”

Around 20 per cent of Plus500’s revenues currently go through the UK, but the company said it has a “highly flexible business model and a lean cost structure to help mitigate the impact of regulatory changes on our financial performance”.

The statement added: “Overall, we anticipate that the industry will consolidate around a smaller number of larger participants, of which we believe Plus500 will be amongst the leaders.”

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