TradeInformer understands that ICM Capital is planning on shuttering its UK operations, with plans to hand back its license to the Financial Conduct Authority (FCA). The company has already applied to the regulator to cancel its license.
TradeInformer understands this is primarily a ‘cost-benefit’ based decision, with the increasingly expensive and operationally burdensome UK license not worth having.
ICM Capital still has several regulatory licences, including in Switzerland, the UAE, and South Africa. The broker appears to be focusing primarily on emerging markets and Japan, with the bulk of its traffic in the last month coming from South Africa and Colombia, according to SimilarWeb data.
ICM Capital has been active in the UK for 15 years but switched to only accepting professional clients after regulatory restrictions on CFDs were introduced by the FCA in 2018.
Some firms have struggled to operate since those restrictions were introduced. Partly that’s due to the restrictions themselves, but it’s also the result of other regulations introduced since 2018.
Partly this is cost based. The FCA is phasing out matched-principal licenses, which had a lower capital requirement of £125k. This means brokers will soon only be able to operate using a £75k introducing broker license or a £750k full scope license.
Another factor is increasing oversight of the retail investment space, most notably with the introduction of Consumer Duty regulations in the last couple of years. These requirements make it even tougher to offer CFDs to retail clients and have also added a whole new layer of costs if a firm wants to do so.