Interdealer broker Icap has disclosed plans to establish an exchange-based business in Europe and says it has applied to the UK's Financial Services Authority (FSA) for the status of a regulated market under the EU's new Markets in Financial Instruments Directive (MiFID).
In its first half results statement, Icap says it believes there are opportunities in several markets to offer trading on an "Icap Exchange" and it intends to apply to the FSA for regulated market status under MiFiD so that it can launch new products in markets such as emissions, energy and transport.
Mifid will also allow Icap to operate multilateral trading facilities (MTFs) throughout the European Union.
Icap has in the past been linked as a potential partner for the London Stock Exchange.
Icap chief executive Michael Spencer told reporters that it could take several more months to get the greenlight from the FSA. He says there was was no intention to change any of Icap's over-the-counter products, but he wanted the option to launch new products either OTC or on an exchange.
The announcement comes as Icap reported that pre-tax profit rose 36% to £141.1 million for the six months to the end of September, boosted by the volatility in the global markets. Revenues rose 15% to £626.2m, driven by a 46% increase in electronic trading.
Spencer says Icap delivered "outstanding results" in busy markets during most of the first half to the year "despite significantly adverse exchange rates".
The business benefited from higher volatility in the interest rate, foreign exchange, energy, emerging and credit markets, he adds.
The IDB recently moved into the post-trade services space with the acquisition of FX settlement platform Traiana.
In the results statement, Spencer notes: "Post-trade services are an area where technology innovation is creating exciting new business opportunities for Icap and the acquisition of Traiana will help us to capitalise on the significant growth in this area."