Plus500 given licence to operate in the United Arab Emirates

Plus500 has been granted a licence to operate in the United Arab Emirates, a potentially high-growth market.

The financial technology company, which offers retail investors services like futures trading and contracts for difference, told investors the Dubai Financial Services Authority licence will allow it to begin operating in the country immediately.

Its entry into the UAE represents the 12th country to have given the London-headquartered business an operating permit and the fifth in the past three years.

Plus500 shares rallied 3.3 per cent to £19.58 in morning trading on Monday, making them the FTSE 350’s top riser. Their value has more than doubled in the past three years.

Since 2020, Plus500 has launched in Estonia, the Seychelles, as well as Japan after it acquired EZ Invest Securities. Plus500 expanded into the US with the takeover of futures and options broker Cunningham.

The group’s expansion into new markets has happened in the wake of surging trading activity on its platform, with volumes expanding rapidly at the time of Britain’s first Covid lockdown.

In a year-end trading update published last month, the company said turnover increased by 16 per cent to around $832million in 2022 thanks largely to gains made on clients’ trading positions.

Active customer numbers continued to slip significantly from their lockdown-era peak, partly reflecting the impact of the FIFA World Cup in Qatar during the fourth quarter.

But the Israeli firm’s annual revenue and underlying core earnings still surpassed analyst expectations, with the latter climbing by 17 per cent to about $454million.

David Zruia, Plus 500’s chief executive, said: ‘We are delighted to have received licence authorisation from the DFSA in the UAE, and we are excited to bring our market-leading technology capabilities to customers in the region.

‘This is the latest realisation of our strategy to enter new markets, develop new products, and deepen engagement with our customers.

‘Since 2020, the group has successfully obtained licences in the US, Japan, Estonia, the Seychelles and the UAE, including through acquisitions.

‘Consequently, Plus500 has a valuable and growing portfolio of twelve licences, ensuring that our growing business continues to be built on a strong regulatory foundation.’

Founded in 2008 by graduates of the Technion – Israel Institute of Technology, Plus500 offers retail investors the chance to trade shares, commodities and more complex financial products like contracts for difference. 

A CFD is an agreement between an investor and a broker to exchange the price difference of an asset, such as a stock, bond or currency, between the time a contract begins and ends. 

They are considered much riskier investments by analysts due to the potential for making high losses,