London Capital Group
(LCG) is making the transition from being a spread betting and
contracts for difference (CFDs) provider to becoming an
introducing broker. As part of the deal, the LCG has tapped its UK-based rival, IG Group, as its first third-party trading platform provider,
the company confirmed to Finance Magnates
on Tuesday.
Under the new
arrangement, LCG said it will focus on providing its clients with ‘boutique’ and
relationship management services while IG Group and other
‘leading third party platforms’ that will be onboarded in the future will
provide the platform, pricing and execution services.
However, the transition plans have been underway for months. In January, the company as part of ‘major changes’ to its business committed its operations to a new team headed by Dave Worsfold, Matt Basi and Stuart Dorward as Chief Executive
Officer, Managing Director and Head of Sales and Trading, respectively. In the following month, LCG announced that it has signed a new partnership with IG
Group to leverage its technology. It also said it
will engage
other “industry leading providers”
as part of “the new evolution of LCG.”
“By partnering with IG
for the technology, pricing, execution, on-boarding and holding of client
money, we are free to re-shape the business to focus on service and
relationships,” Basi told Finance Magnates. “We’ve re-staffed the business
accordingly and are really excited about the team we’re building, all of whom
have deep experience and we’ve worked with before.”
LCG Says
Trading Industry Is ‘Overcrowded’
The switch in business
model comes as LCG UK, which is owned by Charles Henri Sabet who controls Swiss firm Flowbank, suffered an 86% decline in revenue during fiscal year 20221, owing in part to the
UK’s exit from the European Union (EU). The company was
previously a part of the London Capital Group Holdings until its acquisition by
Sabet who separated it from the holdings company that went into liquidation.
Following Brexit, LCG lost its passporting rights for operations in the
EU region and focused solely on the UK client base. However, its
sister entity LCG Capital Markets Limited is
based in Bahamas and operates globally with authorization from the offshore
regulator.
“Our view of the sector
is that [the trading industry] is over-crowded with firms competing to be
counterparty to client trades and [to] risk manage their flow,” Basi explained. “We feel that for
clients to get the best outcomes, firms should focus on the value they can add
to the client trading experience.”
LGC Gives Deadline for
Account Closure
Meanwhile, LCG has said
its clients can open and close their trades, make deposits
and withdrawals until June 30, 2023, after which the
depositing of
funds and the opening of
new
positions will be blocked. In a message sent out
to clients, the spread betting and CFDs provider noted that clients will be
given another four-week grace after the deadline, to close out any existing
positions on their LCG accounts.
Confirming the message to Finance Magnates,
Basi noted that the step is to help give its clients “appropriate time/notice
to make the transition and to handle the business change in an orderly,
professional way.” He added that “the next tranche of clients [will be
contacted] in due course.”
AvaTrade’s New Sales and Retention Head; Torstone’s CFO; read today’s news nuggets.
London Capital Group
(LCG) is making the transition from being a spread betting and
contracts for difference (CFDs) provider to becoming an
introducing broker. As part of the deal, the LCG has tapped its UK-based rival, IG Group, as its first third-party trading platform provider,
the company confirmed to Finance Magnates
on Tuesday.
Under the new
arrangement, LCG said it will focus on providing its clients with ‘boutique’ and
relationship management services while IG Group and other
‘leading third party platforms’ that will be onboarded in the future will
provide the platform, pricing and execution services.
However, the transition plans have been underway for months. In January, the company as part of ‘major changes’ to its business committed its operations to a new team headed by Dave Worsfold, Matt Basi and Stuart Dorward as Chief Executive
Officer, Managing Director and Head of Sales and Trading, respectively. In the following month, LCG announced that it has signed a new partnership with IG
Group to leverage its technology. It also said it
will engage
other “industry leading providers”
as part of “the new evolution of LCG.”
“By partnering with IG
for the technology, pricing, execution, on-boarding and holding of client
money, we are free to re-shape the business to focus on service and
relationships,” Basi told Finance Magnates. “We’ve re-staffed the business
accordingly and are really excited about the team we’re building, all of whom
have deep experience and we’ve worked with before.”
LCG Says
Trading Industry Is ‘Overcrowded’
The switch in business
model comes as LCG UK, which is owned by Charles Henri Sabet who controls Swiss firm Flowbank, suffered an 86% decline in revenue during fiscal year 20221, owing in part to the
UK’s exit from the European Union (EU). The company was
previously a part of the London Capital Group Holdings until its acquisition by
Sabet who separated it from the holdings company that went into liquidation.
Following Brexit, LCG lost its passporting rights for operations in the
EU region and focused solely on the UK client base. However, its
sister entity LCG Capital Markets Limited is
based in Bahamas and operates globally with authorization from the offshore
regulator.
“Our view of the sector
is that [the trading industry] is over-crowded with firms competing to be
counterparty to client trades and [to] risk manage their flow,” Basi explained. “We feel that for
clients to get the best outcomes, firms should focus on the value they can add
to the client trading experience.”
LGC Gives Deadline for
Account Closure
Meanwhile, LCG has said
its clients can open and close their trades, make deposits
and withdrawals until June 30, 2023, after which the
depositing of
funds and the opening of
new
positions will be blocked. In a message sent out
to clients, the spread betting and CFDs provider noted that clients will be
given another four-week grace after the deadline, to close out any existing
positions on their LCG accounts.
Confirming the message to Finance Magnates,
Basi noted that the step is to help give its clients “appropriate time/notice
to make the transition and to handle the business change in an orderly,
professional way.” He added that “the next tranche of clients [will be
contacted] in due course.”
AvaTrade’s New Sales and Retention Head; Torstone’s CFO; read today’s news nuggets.
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- Source: https://www.financemagnates.com//forex/lcg-uk-is-now-only-an-introducing-broker/
