March 25 (Reuters) - Trading platforms targeting smallindividual investors face a wave of consolidation as regulatorsinsist they hold more capital and impose more rules on them, thehead of brokerage London Capital Group said onWednesday.
Speaking after results which showed his company moving backtowards profit after changes last year which saw it replacearound 75 percent of staff, Charles-Henri Sabet outlined astrategy which will focus it more on currencies, open offices inEurope and invest in infrastructure and further hires.
The company, listed on London's small cap AIM market, wasone of several in the sector to register losses from the Swissfranc's record-breaking surge on Jan. 15 and that, plus agrowing regulatory burden is prompting many to take a hard lookat their business models.
"I think there will be a big big consolidation in thisindustry," Sabet said. "The small people will disappear first ofall. I think in 3-4 years we need to be one of the top playersin the industry or we will not be here anymore."
London Capital Group (LCG) said it lost 1.7 million pounds ($2.5 million) on the franc trade, but a number of the sector'sbiggest players lost much more.
Alpari UK sank into administration while Danish-based SaxoBank estimated earlier this month that it lost $100 million fromthe franc volatility. Saxo's main competitor FXCM had to take anemergency loan at high interest after losses of $200 million.
Sabet, who has taken over as CEO from his previous role asexecutive chairman, said he had taken senior staff from bothFXCM and Saxo in a restructuring that will last until the end of2016.
He also said the scale of the industry's focus on Cyprus -where many brokers have been drawn to for regulatory and costreasons - was set to change.
"There are too many people in the industry so it is abubble," he said. "Cyprus was a good idea but 200 brokers inCyprus was not."
On LCG's own results and plans, Sabet said:
"The final result is still negative, as we had a lot ofbalance sheet cleaning. (But) even with the high weight ofredundancies and restructuring costs, we ended the year with apositive EBITDA figure," he said. "A strategy is now in placefor the Group to return to long-term sustainable growth at alllevels of the business during the second half of 2015."($1 = 0.6726 pounds) (Writing by Patrick Graham; Editing by Elaine Hardcastle)
