Key Insights
- London Capital Group resumes normal operations and client onboarding after temporary halt due to parent company FlowBank’s bankruptcy.
- LCG demonstrates solvency to FCA, lifts license restrictions, and reports record £3bn turnover in June under new Introducing Broker model.
LONDON (MarketsXplora) – London Capital Group Ltd (LCG), a London-based retail FX and CFDs broker, has resumed normal operations after a temporary halt in new client onboarding last month, the company announced on Thursday.
The interruption in LCG’s operations, along with restrictions on its Financial Conduct Authority (FCA) license, came in the wake of the forced bankruptcy of its parent company, FlowBank, in Switzerland on June 13.
LCG Managing Director Matt Basi told Reuters that on the day FlowBank entered administration, LCG’s management team, including himself and Dave Worsfold, immediately engaged with the FCA. The regulator requested that LCG demonstrate its solvency position in light of the events at its parent company.
“We proactively requested temporary restrictions on our license while we engaged third-party experts to confirm our financial position,” Basi said.
Following a thorough review and with the FCA satisfied that LCG operates as a standalone, solvent business, the company’s management requested the lifting of all restrictions on July 8. The FCA granted this request, allowing LCG to return to business as usual under its new Introducing Broker (IB) business model.
Basi emphasized the success of LCG’s strategic pivot, stating,
“Dave and I consider the past month proof of concept for the decision we made in 2023 to pivot away from the dealing in principal model, to become an IB. We’ve reduced the company’s cost base by 80%+ and recently turned cashflow positive for the first time in LCG’s recent history.”
Despite the challenges, LCG reported strong performance, with Basi revealing,
“We had a record turnover month in June, turning over in excess of £3bn in notional trade volume. We’re on track to exceed that in July.”
The company clarified that the UK-based, FCA-regulated LCG business is unrelated to the offshore, Bahamas-based LCG business, despite the common ownership by FlowBank. The Bahamas entity, which also used the lcg.com website URL outside the UK, has ceased operations as it was directly managed by FlowBank under the brand FlowBroker.
Looking ahead, Basi hinted at future developments for LCG, saying,
“We have ambitious plans for the future of LCG. I can’t talk at this stage about the specifics of those plans or any prospective change in control – any purchase of the equity from the administrators would require the prior approval of the FCA.”
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