From MarketsWiki
Jump to navigation Jump to search
HKEX 728x90 v6.gif

ICAP plc
Founded 1999 by merger
Headquarters London, UK
Key People Michael Spencer, Group CEO
Products Interdealer brokerage
Website http://www.icap.com/

ICAP was the world's largest interdealer broker for over-the-counter (OTC) trading. In 2016, ICAP sold its global broker business to the British brokerage firm Tullett Prebon, which retained the "ICAP" brand,[1] [2] and ICAP rebranded the remaining, non-brokerage part of the business as NEX Group.[3]

ICAP had daily transaction volume of more than $2.3 trillion at 50 locations in 32 countries, and offered both voice-driven and electronic brokerage systems plus post-trade services. It provided wholesale brokerage on a range of interest rates, credit derivatives, commodities, foreign exchange, emerging markets, equities and equity derivatives. More than 40 percent of its trading occurred on its two electronic trading platforms, BrokerTec and EBS, which merged to become EBS BrokerTec. [4]


ICAP, formerly Garban-Intercapital plc, was formed in September 1999 by the merger of Garban plc and Intercapital plc. Exco plc acquired the wholesale broking operations of IPGL in a reverse takeover in October 1998 and changed its name to Intercapital plc. In November 1998, Garban was demerged from United Business Media plc. The Garban-Intercapital merger brought together Garban's government and corporate bonds, interest rate products and money market instruments with Intercapital's interest rate swaps and options, commodity swaps, illiquid securities and foreign exchange options. Garban-Intercapital plc was changed to ICAP plc in July 2001.

Michael Spencer set up Intercapital in May 1986, initially to concentrate on the new interest rate swaps market. As a specialist financial derivatives broking firm, Intercapital grew from the original four people to more than three hundred worldwide, with offices in London, New York, Sydney, Singapore and all major financial centers. ICAP has a local footprint in 32 countries and more than 70 locations worldwide.[5] ICAP uses the BrokerTec platform, which it acquired in 2003, for its electronic trading.

In June 2006 ICAP acquired the bank-owned electronic OTC currency trading platform EBS for $775 million in cash and in the same month ICAP plc was added to the FTSE 100 Index.

ICAP took a significant step in growing its business in Oct. 2007 when it purchased Traiana, a post-trade network for FX, exchange-traded derivatives, equities and equity derivatives in a transaction valued at $247 million. ICAP sold a 12 percent stake in Traiana in January 2013 to a group of seven of its largest customers. The consortium of banks, which include Bank of America Merrill Lynch, Barclays, Citi, Deutsche Bank, JPMorgan, Nomura and Royal Bank of Scotland, also received an option to buy an additional 20 percent of Traiana at a later date.[6]

ICAP also took a stake in Prism Valuation and made a deal allowing Prism Valuation to use ICAP data as the main underlying source of OTC information for its services. [7]

ICAP was buffeted by competition from Dealerweb, a hybrid electronic and voice broker, in 2009, losing 85 percent of its mortgage bond business over a period of six weeks.[8]

In 2009 ICAP acquired the transactions division of Ocean Tomo and renamed the new division ICAP Patent Brokerage.[9] The relationship is to last until 2019.[10] ICAP Patent Brokerage includes the Intellectual Property Live Auction venue, a Private Sale Brokerage unit, the Patent Bid/Ask Platform and “The Deans List”. Ocean Tomo’s Vice Chairman, Dean Becker, and nine employees joined ICAP.[11]

ICAP CEO and founder Michael Spencer was reported by London's Daily Mail newspaper to have collected a 2009 windfall payment of £23m in dividends from his £602m worth of ICAP shareholdings following the release of ICAP's 2008-09 financial statement.[12] The dividend payments would go to Spencer's company IPGL, the paper reported, which owns the ICAP shares plus London-based brokerage Exotix and spread betting firm City Index.

In September 2009, ICAP and insurance intermediary Jardine Lloyd Thompson closed their joint venture vehicle, ICAP-JLT Ltd, after disappointing trading volume. [13]

In 2010 ICAP dropped its full-service stock-trading business in Europe and Asia after it failed to perform as hoped. The company said it would continue to develop its execution-only business in London and remained committed to expanding its Brazilian and U.S. cash-equities execution-only businesses.[14]

On Aug. 31, 2010, ICAP announced it would launch an electronic market for Euro interest rate swaps in an effort to reduce operational and system risk in the OTC derivatives markets. The platform went live on September 6 and is open to market making banks that have access to a clearing house for interest rate derivatives. [15] As of 2013, around a third of all ICAP's 1 – 30 year Euro IRS trades are executed electronically through the platform. [16]

ICAP passed the $300 billion mark in electronically traded U.S. credit default swaps on May 19, 2011 using its BrokerTec platform.

On February 15, 2013, ICAP launched its electronic interest rate derivative platform in the US for trading of US Dollar (USD) interest rate swaps.[17] On June 3, 2013, ICAP began trading in Sterling (GBP) interest rate swaps on its electronic interest rate derivative platform. [18]

On September 25, 2013, ICAP was fined a total of $87 million, including a $65 million settlement with the Commodity Futures Trading Commission (CFTC) and a $22 million settlement with Britain’s Financial Conduct Authority as part of an investigation into the manipulation of the LIBOR benchmark interest rate. The U.S. Justice Department also brought criminal charges against three former ICAP employees over their roles in the manipulation scheme. The ICAP fine was in addition to settlements paid by British lenders Barclays and the Royal Bank of Scotland, as well as UBS, of Switzerland, of a combined $2.5 billion related to the LIBOR scandal.[19] ICAP was the first interdealer broker fined for rigging the Libor. Barclays Plc (BARC), UBS AG, Royal Bank of Scotland Group Plc and Rabobank Groep have also been fined for rigging the benchmark.[20]

In June 2014 ICAP received an antitrust complaint from the EU's antitrust arm alleging it facilitated a cartel to manipulate yen Libor. The complaint alleged that "ICAP acted as a facilitator to breaches of EU competition law by certain banks in relation to yen Libor for isolated periods between 2007 and 2010," according to an ICAP statement. The same year, the firm eliminated about 400 jobs at its broking unit in 2014 to cut costs.[21]

A U.S. district court ruled in 2017 that ICAP plc and ICAP Europe Limited were not liable in a class action case brought by investors alleging Euribor manipulation. The court said the liability for ICAP plc and ICAP Europe Limited resided with NEX Group under the terms of the transaction merging ICAP with Tullett Prebon.[22]

In September of 2015 ICAP confirmed that it was pulling out of the Wholesale Markets Brokers Association Americas, an industry advocacy group it helped form six years earlier.[23]

In October 2016 ICAP acquired Abide Financial, a global regulatory reporting specialist. Abide became a subsidiary of ICAP’s Post Trade Risk and Information (PTRI) division.[24]

The Commodity Futures Trading Commission settled charges against ICAP in September of 2018 for aiding and abetting numerous attempts by several of its bank clients over more than five years to manipulate the ISDAFIX benchmark. The commission ordered ICAP to pay a $50 million civil monetary penalty.[25]

ICAP SEF[edit]

In September 2013, ICAP announced that it had applied with the Commodity Futures Trading Commission to create ICAP SEF (US) LLC, a new swap execution facility that would operate in various asset classes including interest rate swaps, credit default swaps, equity derivatives, commodities and non-deliverable forwards.[26] ICAP SEF (US) LLC, was granted temporary registration as of September 27, 2013.

In October 2013, ICAP named former CME Group OTC products head Laurent Paulhac as CEO of ICAP SEF.[27]

On May 9, 2014, ICAP Global Derivatives Ltd. (IGDL) was granted temporary registration as a SEF in the U.S. IGDL has also received permission by the U.K. Financial Conduct Authority to operate as a multilateral trading facility (MTF). IGDL officially launched on May 15, 2014, and is regulated by both the FCA and the CFTC.[28]

ICAP SEF became part of Tullett Prebon at the end of 2016, after the £1.3 billion sale of ICAP’s voice and hybrid brokering business. It was once the most used interdealer SEF for interest rate swaps, but had lost ground to competitors such as Tradeweb and Bloomberg.[29]

Electronic Division[edit]

ICAP's Electronic Division includes EBS BrokerTec.

ICAP restructured its electronic division in March of 2012, separating the reporting lines for the FX and fixed income businesses. Gil Mandelzis was appointed CEO of EBS, but stepped down from the company in the summer of 2016.[30]

Products and Services[edit]

ICAP offers a range of OTC (over-the-counter) financial products and services in energy, foreign exchange, interest rates, credit and equity markets and indices.[31] For each of these asset classes, ICAP's electronic capability gives customers the choice to enter prices and execute trades electronically, directly via one of ICAP's electronic trading systems, or to engage with brokers to identify and help negotiate trades. [32] The firm will focusing on investing in emerging markets, as ICAP recognizes that future growth in FX volumes will largely be driven by the emerging markets including Brazil, Russia, India and China. According to its 2013 Annual Report.[33] Its electronic broking volume for 2013 reached $728.3 billion. [34]

In July 2014, ICAP said it was downsizing its voice broking unit to concentrate on investments in the more profitable area of electronic broking and post-trade services.[35]

In April 2015, BATS Chi-X Europe and ICAP announced new services which, when combined, will enable market participants to trade cleared equity index Exchange for Physical (EFP) transactions anonymously. ICAP plans to be the first broker to use the enhanced service, which is available to all participants, with transactions facilitated via ICAP Fusion – the firm’s e-commerce portal for trading venues. ICAP will make available fully cleared equity index EFPs on its ISL MTF and will also facilitate traditional voice broking in these products via its Global Broking division.[36]

ICAP acquired the data analytics platform provider ENSO Financial Analytics (ENSO) in April of 2016. ENSO provides data analytics for hedge funds and prime brokers. It will become a subsidiary of ICAP’s post trade risk and information (PTRI) business unit.[37]

ICAP Charitable Giving[edit]

ICAP is also well known for its ICAP Charity Day, which raises money by donating all revenues and broker's commissions from that day's business. Donations go to a few charities, which increases the impact they may have on those organizations. The 20th annual Charity Day in 2012 raised $18 million. Since inception, the annual event has raised over $161 million (£100 million).[38]

Key People[edit]

ICAP Group CEO Michael Spencer began ICAP's main predecessor, Intercapital, to capitalize on the recently established interest rate swaps market, growing the firm from an original four to more than 300 employees globally. He also serves as a director on several other financial firms, including The Engine Group, City Index Holdings and Charles Fulton. Other important personnel include:

Research & Published Works[edit]


  1. ICAP Newco plc announces new company name: NEX Group plc. ICAP.
  2. Tullett Prebon Agrees to Buy ICAP’s Global Brokering Business. The New York Times.
  3. ICAP to become NEX Group after deal with rival Tullett Prebon. The Financial Times.
  4. History-About the Group. ICAP.
  5. Global Presence. ICAP.
  6. ICAP sells stake in Traiana. FT.com.
  7. Icap and Prism Valuation strike OTC data deal. Finextra.
  8. ICAP Loses 85% of Mortgage Bond Trading to Dealerweb. Bloomberg.com.
  9. ICAP Patent Brokerage. ICAP.
  10. Sale and Acquisition. Ocean Tomo.
  11. ICAP Latest News. ICAP.
  12. Spencer to pocket £23m in Icap payout. Daily Mail.
  13. ICAP-JLT closes joint venture firm. Trading Risk.
  14. ICAP Drop Full-Service Stock Trading. The Wall Street Journal.
  15. ICAP’s iSwap wins OTC Trading Platform of the Year in Risk Awards 2012. ICAP.
  16. i-Swap. ICAP.
  17. ICAP launches i-Swap in the US. ICAP.
  18. ICAP launches i-Swap in Sterling. ICAP.
  19. U.S. and British Officials Fine ICAP in Libor Case. The New York Times.
  20. Ex-ICAP Brokers Charged Libor Probe as Total Hits 14. Bloomberg.
  21. ICAP CEO Says Firm Cut 400 Jobs in Broker Unit to Save Costs. Bloomberg.
  22. ICAP dismissed from US Libor class action case. NEX.
  23. The Incredible Shrinking WMBAA: ICAP’s Departure from Industry Association a Sign of the Times. John Lothian News.
  24. ICAP acquires Abide Financial. ICAP.
  25. CFTC Orders ICAP Capital Markets LLC to Pay $50 Million Penalty for Aiding and Abetting Attempted Manipulation of U.S. Dollar ISDAFIX Benchmark Swap Rates. CFTC.gov.
  26. ICAP files SEF Application with CFTC. ICAP Press Release.
  27. ICAP Names Laurent Paulhac CEO of ICAP SEF. WSJ.com.
  28. ICAP Launches UK SEF. Herald Online.
  29. NEX goes live with US electronic swaps platform. The Trade News.
  30. ICAP to lose electronic trading chief. The Financial Times.
  31. ICAP in Ten. ICAP.
  32. What we do. ICAP.
  33. Annual Report. ICAP.
  34. December 2013 Volumes. ICAP.
  35. ICAP confirms broker cull as revenue falls. Reuters.
  37. ICAP acquires hedge funds analytics firm. The Trade.
  38. ICAP to hold 21st Annual Global Charity Day on Tuesday, December 3. MarketWatch.