Higher Sales Costs for FY2020 Pushed AETOS UK into Losses

AETOS Capital Group UK Limited (AETOS UK), the wholly-owned subsidiary of Australian broker AETOS Capital Group, published its annual financials for the year ending on March 31, 2020. The performance of the broker remained dull in terms of volumes, resulting in a net loss.

According to the Companies House filing, the UK entity ended the financial year with a total turnover of £1.89 million. When compared with the previous year’s turnover of £2.08 million, the brokerage’s business went down by more than 9 percent.

“The company’s principal activities during the year continued to be the provision of brokerage services to deal in financial products for retail and wholesale clients,” the filing stated.

However, the dent in the business income was made by the cost of sales, which surged to £709,881 from the previous financial year’s £460,064. After considering the income from other sources, the broker turned a loss of £183,011 from a net profit of £10,563 in FY2019.

“The company has applied to vary its regulatory permissions with the FCA including the removal of permission to hold client monies. Such application was subsequently approved by FCA on 18 June 2020,” the filing added.

Further, the broker-dealer reported that it ended the financial year with net assets of £1.13 million.

Full-Year Impact of ESMA Restrictions

The period of the financials was crucial as it was the first full year exposure of the brokers to the ESMA restrictions on retail Leverage Leverage In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders Read this Term and marketing imposed in mid-2018. Similar to AETOS UK, other brokers operating in Europe and the UK also reported heavy impacts on their business by the regulations.

Licensed by the UK’s Financial Conduct Authority (FCA), AETOS UK offers trading services with instruments in Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term, metals, energy and indices. It is to be noted that the reported revenue and losses are only for the UK-registered entity and not for its key Australian business.