FOA InfoNet
OTC Derivatives Reform 25 January 2013
The FCM Business: Time for a new pricing model?
Barely had the ink dried on Tabb Group’s assessment of the FCM business at the end of November, than the findings contained in the report were validated by the announcement of a major restructuring by Newedge. While Tabb’s report focused on the US FCM business, the key issues it uncovers apply equally to firms operating in Europe, or on a global basis. According to Tabb’s research, declining revenues (due to historically low interest rates impacting net interest income and lower volumes in 2012) and increased compliance costs resulting from implementation of new regulations are leading to substantial business restructuring, with Tabb predicting a fall in the number of FCMs in the US of 20 per cent by the end of 2014.
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