Regulatory Restrictions Drags Down ADSS’ 2019 Revenue

ADS Securities London Limited (ADSS), the UK subsidiary of Abu Dhabi-headquartered brokerage ADS Securities, has published its annual financial results for 2019, showing a 44 percent decline in its year-on-year revenue.

The broker has a Financial Conduct Authority (FCA) license and operates in Europe with it. It has cited the regulatory restrictions of ESMA and FCA that impacted its European and UK businesses as the reason behind the massive revenue slump. 

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The European regulator last year brought major changes for the brokers, limiting the offered leverages and tightening promotional measures. Many other major brokerages also pointed out these new limitations behind their business slow down last year.

In the Companies House filing, the UK brokerage detailed that its institutional revenue for the year went down to £1.43 million from £2.02 million, a drop of 29.2 percent. The retail revenue nosedived by 77.5 percent to £182,345.

Combining the transfer pricing revenue of £3.3 million, however, the brokerage’s 2019 business turns out to be highly profitable with total annual revenue of £4.99 million, compared to £4.09 million in the previous year.

The brokerage’s after-tax profit for the year also jumped significantly by 49.9 percent to £729,338. This was the result of more than doubling of the operating profits.

Going with the institutional clients

ADSS highlighted that it will be now focusing on its institutional clients more, a similar trend seen with many other European brokers.

“The company has undertaken an independent strategic review in Q1 2020 and the board remains committed to its strategy of predominantly focusing upon the professional client sector within the UK,” ADS stated.

Earlier this year, the brokerage also on-boarded forex industry veteran Hormoz A Faryar as the head of its institutional sales.

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