London-listed brokerage group Plus500 announced on Monday that it has acquired a new license in the United Arab Emirates.
In a year-end trading update, the company said that it acquired a license in January from the Securities and Commodities Authority (SCA).
Until now the company has been operating under a ‘Category 4’ license from the Dubai Financial Services Authority.
This is something akin to an introducer or appointed representative license, as it allows the holder to market services and introduce clients to entities regulated outside of the UAE.
The new license is an improvement because, aside from positive branding, it will allow Plus500 to offer higher leverage. Currently the firm is introducing clients to its Cypriot entity via the Category 4 license.
Cyprus has capped leveraged due to European regulations. However, entities operating with an SCA license can offer, for example, 500:1 leverage of FX pairs – much higher than the 30:1 limit in Europe.
ICE membership
Plus500 also noted in its update that its US-regulated entity has become a clearing member of ICE Clear US.
The main benefits of acquiring this appear to be lower costs and a broader set of products.
ICE Clear is the clearing house for trading on ICE Futures US, a major US futures exchange. This means that ICE Clear is the central counterparty for trading on the exchange.
Significantly, only an ICE Clear member can be a counterparty to trades with ICE Clear.
Aside from Plus500 being able to fill that role, being closer to the end product in this way means that they can also pass on lower costs to their end clients. It will also make it easier for them to offer the securities listed on ICE to their clients.
