Icap retains Washington lobbyists
UK inter-dealer broker Icap has retained the services of a professional lobbying company in Washington to combat negative political sentiment and ensure the broker’s interests are fully represented on Capitol Hill.
Icap has faced significant negative Washington lobbying from parties attempting to say the UK broker tried to stifle competition in the US markets by poaching staff from September 11-stricken Cantor Fitzgerald, and its apparent takeover attempt of small swaps trading platform Blackbird. Icap has strenuously denied such charges.
But the petitioning led to probes by the United States Department of Justice, two congressional committees, along with a request by the Securities and Exchanges Commission to look into Icap’s behaviour in the US. The UK broker claimed it has faced relentless scrutiny because its US rivals were applying political pressure it could not match in Washington. Icap’s head of US operations, Steve McDermott, told news agency Reuters in an interview on August 23: “We have no lobbyists, no contributions, no access to Washington.”
This has now changed. The lobbyists are expected to press the case that banks typically favour strong competition between two to three large brokers for mainstream derivatives and cash products. Such a situation, as appears to occur with interest rate swaps, ensures margins are reasonably tight and liquidity pools deep enough for banks to conduct sizeable transactions. If Icap’s lobbyists can convince US politicians that this is a satisfactory and efficient market situation, it should ensure the smooth passage of its purchase of BrokerTec from a consortium of major international banks.
Icap reached a deal with the management of Blackbird last week that resulted in it selling its 19% stake in the Charlotte, North Carolina firm to the company’s management. Under the terms of the deal, Blackbird executives signed an agreement not to negatively criticise Icap and end their negative lobbying efforts in Washington.
The UK broker unveiled yesterday that it plans to acquire privately owned Kentucky-based energy broker APB Energy (See - Icap signs letter of intent to buy out APB). APB brokers gas, electricity, weather and coal derivatives on its online platform, True Quote, and through traditional voice brokering.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Regulation
Barr defends easing of Basel III endgame proposal
Fed’s top regulator says he will stay and finish the package, is comfortable with capital impact
Bank of England to review UK clearing rules
Broader collateral set and greater margin transparency could be adopted from Emir 3.0, but not active accounts requirement
The wisdom of Oz? Why Australia is phasing out AT1s
Analysts think Australian banks will transition smoothly, but other countries unlikely to follow
EU trade repository matching disrupted by Emir overhaul
Some say problem affecting derivatives reporting has been resolved, but others find it persists
Barclays and HSBC opt for FRTB internal models
However, UK pair unlikely to chase approval in time for Basel III go-live in January 2026
Foreign banks want level playing field in US Basel III redraft
IHCs say capital charges for op risk and inter-affiliate trades out of line with US-based peers
CFTC’s Mersinger wants new rules for vertical silos
Republican commissioner shares Democrats’ concerns about combined FCMs and clearing houses
Adapting FRTB strategies across Apac markets
As Apac banks face FRTB deadlines, MSCI explores the insights from early adopters that can help them align with requirements