LMAX Limited, the parent company of FCA regulated multilateral trading facility (MTF) for FX trading LMAX Exchange, has reported its 2016 results indicating healthy continued growth in the business.
LMAX reported revenues of £27.7 million (USD $36 million) for the year, up more than 20% over 2015’s £23.0 million. LMAX reported a profit of £2.2 million for the year, versus a £1.4 million loss in 2015.
Volumes at LMAX averaged $175 billion per month, a 13% increase over 2015. LMAX’s fastest growing region was Asia-Pacific, which saw FX volume growth of 55% during the year. That included Tokyo exchange, which contributed about 10% of second-half 2016 professional trading volumes.
LMAX had over 5,000 active clients in 2016. Client funds held grew to $150 million by year-end.
David Mercer, CEO of LMAX Exchange commented on the company’s results:
2016 was a good year for LMAX Exchange. We were able to build on our technology investments in 2015, continue our strong growth and expand our capabilities to new markets. In addition, we were able to deliver for the institutional marketplace and drive volumes in Asia.
This was all achieved against the backdrop of market uncertainty and volatility that we were well positioned to benefit from. Finally, we continued to champion transparency and fairness in the global FX industry as a fundamental belief of the business.
Looking forward through 2017, we are seeing sustained volume growth and significant institutional uptake in all markets.
In the broader industry context, LMAX Exchange stated that it continues to campaign for the need to rid the FX market of practices open to abuse, such as ‘last look’ and ‘pre-hedging’, in order to increase transparency and regain customers’ trust following a few scandal ridden years. In addition to the regularly published thought leadership reports and the ongoing dialogue with BIS FXWG and the FEMR Working Group representatives from the Bank of England, FCA and HM Treasury, LMAX Exchange recently became the first organisation to publicly commit to the upcoming Global Code of Conduct.
Looking ahead, LMAX Exchange is aiming to lead the development of the Transaction Cost Analysis (TCA) methodology for foreign exchange. This work will see the company launch a whitepaper in May 2017 proposing a comprehensive, new set of metrics for analysing execution quality and trading costs on firm and ‘last look’ liquidity. Highly anticipated industry research, this white paper is intended to contribute to an industry-wide debate on how to conduct TCA in a way that benefits the customer, provides a fair comparison for liquidity providers and creates genuine transparency: one that enables choice and aids quality decision making.
LMAX Limited’s 2016 income statement follows: