Spencer returns to 'laughable' euro-clearing battle on earnings day  

City veteran Michael Spencer, the chief executive of Nex Group  
City veteran Michael Spencer, the chief executive of Nex Group   Credit: michael-spencer.jpg/Geoff Pugh

City veteran Michael Spencer has weighed back into the euro-clearing debate barely a month after warning Europe against its plot to take back the $1 trillion market, calling the battle "quite laughable" as his company reported its full-year results.

Mr Spencer,  the chief executive of financial technology company Nex Group and a former Conservative Party treasurer, reiterated his desire not to see the market move away from Britain post-Brexit by calling the debate "a pretty extraordinary and retrograde and really nationalistic movement" on Monday. 

"If the EU is proposing to repatriate euro-clearing from London to Europe they’re clearly going to impose upon London some sort of penalty which is unprecedented in the globalisation of financial markets," he warned. 

The European Central Bank lost its legal battle to take euro clearing out of London and into the eurozone in 2015  
The European Central Bank lost its legal battle to take euro-clearing out of London and into the eurozone in 2015   Credit:  Kai Pfaffenbach

"Sadly my opinion is that what the Europeans are discussing doing is a really sad and, if I might say, ill-informed piece of economic nationalism that is deeply against efficient and free markets," he added. 

"We clear dollars successfully in London; we clear yen - nobody’s phoned London from Tokyo saying we must insist that your yen clearing in derivatives is moved back to Tokyo or Australia or New Zealand or Hong Kong or Singapore or Hungary." 

His thoughts on the subject come just weeks after he warned an audience in London that shifting euro-clearing would be “deeply, deeply bad". Brussels has since confirmed that it is considering changes to the market - such as enhanced supervision from the EU or new location requirements - in light of Brexit. 

He turned his attention back to the politically sensitive debate - which the US derivatives regulator and Chancellor Philip Hammond have recently weighed into - on the day of his company's results for the year to March 31, a key period for the group given that the business completely transformed during that time. 

Nex Group was only created in January, after Tullett Prebon completed its £1.28bn deal for Icap's global broking arm, founded by Mr Spencer, and left behind the electronic and post-trade side of the business, which is now Nex.

Its revenues for the period rose 18pc to £543m while pre-tax profit inched up 4pc to £114m, the company said, with Mr Spencer noting that the priority for the financial year is to increase divisional operating margins by at least 40pc. 

 

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