Icap, the massive broker founded and run by Michael Spencer, saw a 6 per cent drop in revenues in the last quarter as investment banks continued to scale back their trading activities.
Spencer said while conditions remained tough and new regulations in the swaps markets might disrupt trade for a time, the company still expects to hit profit expectations for the year to March.
He added: “Trading activity across many markets was down in the third quarter, compared to the prior year, with a slower December than we anticipated.
"Although market conditions remain difficult, we saw a modest improvement in activity in January as the ongoing debate about the Federal Reserve quantitative easing programme continued.”
But he said new rules which come into force on February 15 will require major players to do all their swaps through recognised Swap Execution Facilities (SEF). ICap has already set one up in the US and is applying to do so in London.
Spencer said: “It may all be a non-event but equally there may be some difficulties in interpreting the small print. It could be a bit like Big Bang when people sat on their hands for a bit. But I am certain it will only be a temporary thing”.
He said there was “tremendous” feedback from customers to their SEF, which was the market leader in interest rate swaps, and “we are also seeing the tangible benefits of our investments in post-trade, as the regulatory push for risk mitigation drives demand for our solutions.”