Derivatives Market Weighed Down by Brexit, Acuiti Report Finds

UK respondents to the survey had the most depressed revenues compared to other regions.

Brexit uncertainty continues to hang over the United Kingdom’s derivatives market, the inaugural Acuiti Derivatives Insight Report found, despite solid revenue performance in the sector during the month of March.

Acuiti is a new business intelligence platform for the global derivatives market. The first report from the platform, which is based on submissions from over 140 senior derivatives professionals, found that revenues for the derivatives sector had either risen or remained constant in March of 2019 on both a monthly and yearly comparison.

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Specifically, out of the total respondents, 38 percent reported an uptick in revenues month-on-month, and 33 percent achieved an increase in revenues on a year-on-year comparison. Seventeen percent of total respondents, however, experienced lower revenues month-on-month.

During the month of March, non-bank futures commission merchants (FCMs) and inter-dealer brokers reported the most positive trading conditions, the report found. However, banks reported challenging market conditions.

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Acuiti: UK and Europe Drag Down Segment Performance

The Acuiti report also found that, although the segment as a whole achieved stable results, there was a marked difference in the performance across continents. Specifically, South America, the Asia Pacific region and the Middle East all drove revenue growth. However, European and UK participants faced a more difficult market.

UK respondents to the survey had the most depressed revenues combined with the fastest rising cost bases. The majority of the survey participants based in Britain cited Brexit as a primary obstacle to achieving growing revenues.

Will Mitting of Acuiti
Will Mitting
Source: LinkedIn

Commenting on the results, Will Mitting, managing director of Acuiti, said: “The overall performance and outlook for the derivatives market is positive but the ongoing uncertainty over Brexit is having a major impact on market participants in both the UK and Europe.”

“Despite a strong month for volumes in March and a positive performance outside Europe, Brexit is causing a cloud over revenue growth and leading to sharp rises in cost bases in both the UK and the other EU countries.”

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