Updated: State Street to shut FCM business

Around 50 employees will be impacted globally by the withdrawal from the futures clearing business.

State Street is to close its global futures clearing (FCM) business and relocate 50 employees, as it looks to refocus on its core businesses in the face of heightened costs.

Around 50 employees will be impacted globally by the decision to withdraw from the clearing business; however the custodian will keep some of the team on board to help with the transition.

According to a statement from State Street, it said: “Our clients have refocused their investment strategies in response to market factors, which impact our ability to grow the FCM business.

“We have to reduce overall expenses in order to deliver on our financial commitments and shareholder expectations. This means taking a hard look at our business and making strategic decisions about exiting those that are either capital intensive or don’t meet our growth expectations.”

State Street first ventured into futures execution in March 2014 to help it expand its FCM (futures commission merchant) business.

However since then it suffered a number of setbacks, which included Pimco pulling its futures-clearing business from State Street in October 2014. It was planning to open several new futures-execution accounts with State Street but those plans were put on hold, according to a report from the WSJ.

In December 2014, it decided to withdraw from the swaps clearing business, and announced it will not expand its clearing business in Europe. 

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