Beyond Brexit: How London’s FX Powerhouses Are Shaping Their Future
UK’s EU Referendum: Impact on the FX Industry
A huge European shadow hangs over British Prime Minister David Cameron’s shoulders as he engages in further discussions with the powers that be in Brussels and EU member states.
Whether voluntarily or due to pressure within Europe, Mr Cameron has recommended that the UK remain in the EU, but business leaders across the UK and a large part of the population are very eager to restore the UK’s sovereign independence and let the UK prosper again. Become a self-sufficient nation and take control of its own commercial, financial, social and political destiny.
Some analysts believe that not joining the EU will save the UK 550,000 pounds a day, and British companies will be able to get rid of European instructions on how to run their businesses, handing power back to domestic companies in the UK, and retaining the business-oriented nature of London’s business economy. This will also allow the UK to break away from low-tech socialist Europe and be able to establish trading relations with every independent country on earth, including very important areas in the Far East such as Hong Kong (home to many British electronic trading entities), Singapore (Asia’s largest bank foreign exchange center) and mainland China (a country willing to do business with the UK).
Views from within the FX industry are certainly of interest and FinanceFeeds today spoke to executives with a keen interest in the subject.
Jean-Raphael Nahas, head of sales at Blackwell Global, explained to FinanceFeeds: “Probably the biggest uncertainty about Brexit is that this is unprecedented and no country has successfully left the EU, so any prediction is very difficult. If the UK leaves the EU, the risks of other European countries in deep debt crises may follow suit, which could lead to the collapse of the European bloc.”
“This will certainly have an impact on FX operations in London as London is a key player in the FX market. We could see a significant amount of business moving to Asia as UK FX firms will not be subject to European financial policies and can operate independently working with Asian companies,” concluded Mr. Nahas.
In London, Peter Cruddas, chief executive of UK spread betting and CFD firm CMC Markets, recently donated money to the Brexit campaign, declaring his desire for British independence. Mr Cruddas, the former Tory treasurer, donated £10,000 to the pro-Brexit Leave campaign and predicted that executives from other major UK companies would also support cutting ties with Brussels.
Today, David Mercer, CEO of LMAX, the world’s only foreign exchange multilateral trading institution, said in an interview with FinanceFeeds: “As far as I’m concerned, I don’t think exiting will have much impact on London’s position as the world’s leading foreign exchange center. London is home to all the leading FX players and venues, it will remain so for decades to come due to time zones, technical proficiency and capital markets expertise.”
Mr Mercer further explained to FinanceFeeds: “Regulations are becoming increasingly standardized around the world and the scope for regulatory arbitrage will shrink in the coming years. As the referendum date approaches, London will retain its number one position, whether it is in or out of the EU, transaction volume may increase!”