Plus500 Supports FCA and ESMA, Eyeing Stronger Revenues in H1

Retail foreign Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term and CFDs trading provider Plus500 has endorsed last week’s announcements from the FCA and ESMA ESMA European Securities and Markets Authority (ESMA) is an independent Authority of the European Union that is responsible for the safety, security, and stability of the European Unions’ financial system and is charged with protecting the public. The European supervisory authority for the securities sector, ESMA was established on 1 January 2011. The European Securities and Markets Authority is an independent EU authority based in Paris. It aims to contribute to the effectiveness and stability of t European Securities and Markets Authority (ESMA) is an independent Authority of the European Union that is responsible for the safety, security, and stability of the European Unions’ financial system and is charged with protecting the public. The European supervisory authority for the securities sector, ESMA was established on 1 January 2011. The European Securities and Markets Authority is an independent EU authority based in Paris. It aims to contribute to the effectiveness and stability of t Read this Term, as well as any future changes the authorities will impose on the trading industry. The group is also portending an upbeat H1 2017 performance across its business despite what has been an up and down year thus far.

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Last week, the FCA and ESMA unveiled a new timetable for upcoming changes in 2018, ending months of speculation that pointed to new regulations in June 2017. In terms of the FCA, a series of new regulations regarding FX and CFDs was postponed until 2018 given concerns surrounding the overall effectiveness of the current regulatory framework and ESMA’s heightened jurisdiction on the issue – beginning in 2018, ESMA will also gain specific product intervention powers.

More specifically, following the implementation of MiFID II in January, ESMA will gain new powers to block certain financial products for a period of up to 12 months, requiring a reassessment at least every three months. This could become extremely relevant to the FX and CFD industry, as the group will maintain acting power to prohibit or restrict the marketing of any financial instrument that it deems unfit.

Plus500 embraces this more coordinated approach by ESMA and the FCA for the betterment of the trading industry and a more unified code of conduct across all European jurisdictions. The group also feels that its business model makes it strategically placed to thrive in a newly revamped playing field, one that will place a greater emphasis on compliant providers.

Smooth sailing

Plus500 has been factoring in a convoluted outlook due to the regulatory headwinds from the FCA. While the group was eyeing stronger revenues, profits, and stable margins in H1 2017, it is clear that the FCA consultation could also potentially affect its H2 business. This is because of the possibly negative impact of the implementation of regulatory changes across a number of countries that Plus500 operates in.

After the announcements last week however, the effects of these new regulations will be deferred to 2018, paving the way for an upbeat fiscal year for Plus500. Plus500 is expected to disclose its H1 2017 financial results on August 7, 2017.

Asaf Elimelech, CEO and Executive Director of Plus500, commented: "We have had a very successful half year, significantly ahead of our expectations. This puts us in a strong position for the remainder of the year. We are confident that our flexible business model will enable us to adapt to the upcoming regulatory changes and gives us a competitive advantage that will enable us to deliver another excellent performance this year."

Last month, Plus500 announced a sizeable share buyback program worth $10 million. The company financed the purchases of its own stock via its net cash balances, which will run over three months, ending on the 31st of August 2017.