March 13, 2018 / 7:35 AM / 10 months ago

TP ICAP says talking to European regulators over Brexit hub requirements

(Reuters) - Interdealer broker TP ICAP Plc (TCAPI.L) said it was talking to financial regulators about requirements for a post-Brexit hub, should the company choose the location for its operations.

TP ICAP pledged to ensure uninterrupted service in 2018 following Britain’s exit from the European Union, but said its efforts had been hampered by political uncertainty, which has persisted into 2018.

“We have now moved from analysis and planning, to decisions and action without a full understanding of the final outcome of the negotiations between the UK government and the EU,” TP ICAP said in a statement.

The company said it had “an extensive Continental European footprint” and services EU clients from Frankfurt, Paris, Amsterdam, Madrid and other locations.

TP ICAP also expects costs in 2018 in relation to making the group “ready for the impact of Brexit”.

The company, which brings together buyers and sellers in financial, energy and commodities markets, said pretax profit rose to 72 million pounds in 2017, from 57 million pounds a year earlier, as interest rate hikes spurred trading volumes in a year of low volatility.

Interdealer brokers had in 2016 benefited from higher volatility following political surprises, such as U.S. President Donald Trump’s victory and Britain’s decision to leave the European Union. This volatility, however, was short-lived.

Despite low levels of volatility there were still “sporadic increases” in trading volumes, TP ICAP said, adding that it saw increased activity in its rates, foreign exchange and money markets units when interest rates were hiked.

Foreign exchange and money markets also benefited from the uncertainty around the Brexit negotiations.

“So far in 2018 we have seen an encouraging start to the year, with a pick-up in volatility and interest rates,” CEO John Phizackerley said.

Reporting by Noor Zainab Hussain in Bengaluru; Editing by Gopakumar Warrier and Sunil Nair

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