Blackwell Global, a retail broker, announced on Thursday that it has upgraded its license with the UK regulator, the Financial Conduct Authority. According to the broker’s statement, the firm is now a Full-Scope IFPRU €730k firm.
Full-scope IFPRU €730k firm status is given to firms with their own base funds of €730,000 ($845,700). They must also adhere to both the European Securities and Markets Authority’s (ESMA ) Markets in Financial Instruments Directive and any other local regulations.
The most notable benefit of gaining such a license is that it enables brokers to trade with clients as principal. Prior to this, firms are usually confined to performing matched limitation trades.
In the wake of ESMA’s recent regulation, a number of firms have upgraded their licenses with the FCA. In the past few weeks, Valutrades, Divisa Capital, and ATFX have all received theirs.
Cash injection
Given the regulatory requirements, one has to meet in order to get a full-scope license, obtaining one generally requires an injection of cash. This seems to have been the case for Blackwell Global.
The firm’s statement today noted that it had received a “significant capital injection” from its parent company, Blackwell Global Group. The broker did not say how much exactly but it would have to be enough to ensure that, at an absolute minimum, the firm has base funds of €730,000 ($845,700).
Blackwell Global Group itself is a fairly new company. It was founded in 2010 and currently operates brokers with licensing, outside of the UK, in Hong Kong and Cambodia.
Patrick Latchford, Blackwell Global UK CEO, commented on his firm’s new license, saying: “Given the imposition of the new ESMA regulations, especially in relation to Negative Balance protection, the timing was right to gain the full licence and continue to grow the business. Blackwell Global supports the FCA’s efforts to properly account for market risk and its encouragement of brokers to move away from the matched principal model.”
