Plus500 Grew Its Revenue Despite a Hard Year in 2015
Regardless of difficult year in 2015, Plus500 was able to book an increase in total revenue. The company scored $275.6 million revenue. Previously, a failed merger with Playtech Plc in November 2015 and the increase of its compliance cost have disturbed Plus500 operation.
Plus500 was founded in 2008 by Gal Haber, Alon Gonen, Elad Ben-Izhak, Shlomi Weizmann, Omer Elazari and Shimon Sofer as an online trading platform. The Israeli-based company is headquartered in London with regulated entities located in United Kingdom, Cyprus and Australia.
On Wednesday, the company announced its annual performance and booked a 20% increase in revenue from $228.9 million in 2014 to $275.6 million as Reuters reported. However, due to the hardship in the year 2015, the company's profit decline to $96.6 million, from $102.5 million in 2014.
UK Financial Conduct Authority, the British financial regulator in May asked Plus500 to review its client process and fixing its anti-money laundering checking process. According to Business Insider, the issue is only resolved in January this year. While in November, the aborted acquisition plan from Playtech has also put more pressure on company's operation.
CEO Gal Haber told Finance Magnate regarding the result, "We made significant progress enhancing our regulatory compliance and onboarding processes. We were pleased that Plus500UK began accepting new UK customers again in January 2016 and we are not subject to any regulatory restrictions in each of our regulated entities."
In the Wednesday announcement, Plus500 also reshuffled its top management by promoting Asaf Elimelech to become the new CEO. While Gal Haber is appointed as a Managing Director.
Founded with initial invesment of $400,000, Plus500 soon became the popular trading platform in the financial derivatives market or known as CFD (contract for difference). The firm is not operated in the U.S., because under the Dodd-Frank Act 2010, derivatives trading are not permitted to operate in the U.S.
Dodd-Frank Act was an act issued to reform Wall Street and stock market, and specifically forbid the trading of derivatives. It is because financial derivatives are usually traded over the counter, which means conducted as a private trading.
Current U.S. administration believes that in order to prevent another market collapse, all transaction in the public market must be transparent. Therefore financial derivatives trading, including its trading platform such as Plus500 are not permitted because of its privately trade nature.
Although facing a difficult year, but Plus500 managed to book a 20% increase in total revenue to $275.6 million. Since January, the firm has managed to fully comply to UK regulator policy.