ESMA Restrictions Drag Down ICM Capital
ICM Capital has published its annual financials ending on December 31, 2019. Data showed a significant loss in its revenue and the broker ended up in losses.
Its revenue for the period dropped to £2.56 million from the previous year’s £7.2 million. The year on year revenue of the spot FX and CFDs market maker went down by 64%.
It ended up in a net loss of £383,404 due to the hefty administrative expenses of £5.25M. This was despite a gross profit of £1.73M from the businesses and another £3.02M income from other sources.
From the previous year’s £7.19M, however, the administrative costs declined.
ESMA Restrictions: Harsh for Brokers
ICM Capital highlighted the European Securities and Markets Authority (ESMA) restrictions imposed on the trading businesses in 2018. Apparently, it was one of the key reasons behind the slump of its business.
As a result, the company’s retail business faced negative repercussions, ICM said. It further stated that the ESMA restrictions received confirmed as permanent and retail businesses remain lower as a result.
The fresh rules of the European regulator include restrictions on marketing as well as distribution of CFDs to retail investors. Additionally, other brokers faced these restrictions.
Consequently, ICM Capital is now shifting its focus more towards onboarding institutional clients. Moreover, the company revealed that it will launch new products this year to provide share dealing services.
Furthermore, the FCA-regulated company discussed the the implications of Brexit on its business . It’s not expecting any significant impact from that as its operations are concentrated in the UK, Middle East, and Asia.
