Major forex broker FxPro said on Wednesday that it had cancelled its plans to list on the London Stock Exchange, as the UK financial watchdog threatened to apply stricter rules for retail forex and CFD trading, sources close to the matter told online media Sky News.
According to the sources, Credit Suisse and Morgan Stanley had been lined up to monitor the initial public offering (IPO) of the company. FxPro, however, has informed several prospective non-executive directors that their appointments will no longer take place, as the broker abandons planned listing on the LSE and will for now remain in private hands.
Richard Kilsby, a former director of the LSE, became a chairman of FxPro last year, and will continue in the role "for the foreseeable future", the source added.
As FxPro is one of the largest brokerages in UK, it is not surprising that it intended to follow the example of CMC Markets (LON:CMCX), which floated on 5 February 2016 for nearly $1 billion. CMC Markets, however, saw its stock price drop by more than 50% after the Financial Conduct Authority (FCA) announced its decision to cap leverage to 1:50 and ban any form of trading bonuses on December the 6th. Its shares traded for GBX 184.40 apiece on December 5, and after the announcement the prices hit a 52-week low to GBX 90.95. As a result, it became clear that CMC considers moving its headquarters as well as their London-based operations out of the UK.
In fact, after the FCA’s decision was announced, more than £1bn was wiped off the value of the London stock market's main players – CMC Markets, IG Group (LON:IGG) and Plus500 (LON:PLUS). The stock prices of these companies have not recovered ever since.
FxPro is a leading online brokerage, regulated jointly by Cyprus’ Securities and Exchange Commission (CySEC) and UK’s FCA. The broker operates as a Hybrid Agency Model broker, offering Negative Balance Protection and enabling clients to access top-tier liquidity. It offers complete services for all retail forex market segments, as well as trading in futures, indices, metals, shares, and CFDs on a selection of trading platforms.