PhillipCapital shuts London-based futures arm

PhillipCapital, the Singapore-based broker, has closed its London-based futures and options business less than two years after launch citing challenges linked to the Covid pandemic.

PhillipCapital UK, which offers execution and clearing services across foreign exchange, futures and options, started the process of closing the derivatives arm in recent weeks.

Jon Regan, the chief executive of PhillipCapital UK who joined the firm in April 2019 after 11 years at Macquarie, said the decision was taken because the business had failed to build sufficient momentum since launch.

Regan said: “We built a strong futures and options team but unfortunately we launched a week before the Covid pandemic hit and, consequently, we have struggled to onboard clients who have shown themselves reluctant to switch broker in the past 18 months. The inability to build sales traction due to Covid means we have regrettably taken the decision to close the UK futures and options business.”

Regan said the closure will affect eight staff including a small number of brokers. The chief executive also said PhillipCapital UK will continue to operate in London, offering foreign exchange and contracts-for-difference execution and clearing to retail clients and a growing book of institutional firms.

PhillipCapital also maintains a presence in London through its holdings in King & Shaxson, the UK investment firm, and Walker Crips, the LSE-listed asset manager and stockbroker. 

The past 18 months or so have been tough on brokers and their trading clients. Some incurred losses from the extreme volatility that followed the escalation of the Covid pandemic in March while others on the right side of that event profited handsomely and left the industry.

ABN Amro said in March last year it lost around $200 million (£146m) after it was forced to liquidate a US client’s positions amid market volatility caused by the Covid-19 pandemic.

British broker Marex cancelled in June this year its planned listing on the London Stock Exchange citing “challenging IPO market conditions”.

More recently, traders have been on watch supply chain constraints have led to volatility in the global commodities markets, post-Covid inflationary pressures have prompted heavy trading in rates and US equity indices are at or near record highs.