London energy broker Arraco sets up EU hub in Dublin

London-based energy broker Arraco Global Markets Group has secured a licence from the Central Bank of Ireland to set up an EU hub in Dublin, as financial firms continue to deal with the fallout from Brexit.

Arraco, which was set up seven years ago, said that Arraco Ireland Ltd would build up a team of 30 employees over the course of this year as its new so-called markets in financial instruments directive (MiFID) licence allows it to “to support its EU clients in the power, gas and oil markets and going forward”.

The Irish office is led by Stephen Byrne, a veteran of the energy financial derivates industry.

“This marks a major turning point for Arraco,” said group chief executive Tom Roberts. “Having an EU OTF [organised trading facility] will ensure Arraco can operate and build strategically in derivatives markets across Europe. We want to be at the forefront of the movement of all derivatives trading on to an EU OTF and the creation of Arraco Ireland will ensure that we will be.”

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The awarding of the licence comes at a time when energy prices are soaring in the wake of Russia’s invasion of Ukraine. Brent crude oil is trading at almost $102 a barrel, up 31 per cent so far this year, while benchmark Dutch gas futures have jumped about 130 per cent over the same period.

EU member states agreed in May to phase out Russian oil imports by the end of the year under a sixth round of sanctions imposed on Russian entities as a result of the war.

Meanwhile, the biggest single pipeline carrying Russian gas to Germany — the so-called Nord Stream 1 pipeline — started annual maintenance on Monday, with flows expected to stop for 10 days, though governments, markets and companies are worried the shutdown might be extended due to the war in Ukraine.

Minister of State at the Department of Finance, Sean Fleming, said: “I would like to congratulate Arraco for opening its new Dublin office. Ireland is becoming a centre of excellence for talent and opportunities in the financial services sector.”

Six years after the Brexit referendum, Dublin has cemented its position as the most popular destination for international financial services firms to set up EU hubs or relocate staff to retain access to the single market, according to international professional services firm EY.

As of the end of March, some 36 financial service companies had either moved or announced intentions to transfer activities to the Irish capital, it said. Luxembourg is the second most popular destination, attracting 29 companies, followed by Frankfurt, at 23, and Paris, at 21.

However, when it comes to the number of people who have been, or plan to be, relocated to one single destination, Paris had scored highest by the end of March, attracting about 2,800 UK employees, followed by Frankfurt, at 1,800, and Dublin, at 1,200, according to EY.

Arraco has offices in London, Singapore and Tokyo and has plan to launch a US entity in Houston, Texas.