Plus500, the UK’s second largest provider of “contracts for difference”, reported a 21 per cent growth in net profits in its record full year results, despite a regulatory clampdown that has cast doubts on the future of this industry that enables retail investors to take risky bets on financial markets.

The Aim-listed company said it was the industry leader in terms of customer growth; the number of active customers was up 14 per cent year-on-year, to 155,956, while new customers increased 23 per cent, to 104,432. Plus500 said it was “reducing churn”.

The strong client uptake was reflected in net profits of $117.2m for the year, up 21 per cent on 2015.

The year’s political turbulence and ensuing market volatility drove customer activity, said the Israel-based company – the Brexit vote and US election both “resulted in a profitable outcome,” it said.

Plus500 said it was confident that it could cope with the regulatory changes across Europe, commenting that it was, “still assessing likely impact of regulatory changes but highly flexible business model expected to partially mitigate any impact”.

However, the UK watchdog’s “proposals to reduce leverage are expected to have the greatest financial effect,” said Asaf Elimelech, CEO. The Financial Conduct Authority has gone further than other European regulators by proposing harsh limits on leverage for retail investors.

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