Trader Mercuria gets on UK regulator list ahead of key purchase

By Dmitry Zhdannikov

LONDON (Reuters) - Mercuria has become a rare trading house to be registered with the British financial regulator, weeks before it is expected to close a deal to buy Wall Street bank JPMorgan Chase & Co's commodities trading business.

Mercuria said in a statement its UK-registered unit Mercuria Europe Trading was now authorized and regulated by Britain's Financial Conduct Authority (FCA).

"As Mercuria's business model continues to evolve to expand its provision of services, so too does the regulatory oversight of Mercuria," said Victoria Attwood Scott, Global Head of Compliance at Mercuria.

The move highlights the deep transformations through which trading houses are currently undergoing as after decades of little disclosure they begin to report much more on who owns them, what they do and what they earn.

There is also an intense debate in the industry over how it should be regulated amid questions from politicians whether some merchants have become "too big to fail" and should therefore become subject of a tighter oversight.

JPMorgan agreed earlier this year to sell its physical commodities business to Mercuria, sweeping the fast-growing Swiss trading house into the top league of commodities traders.

Mercuria's co-owner Marco Dunand said at the time the deal placed Mercuria's model in between traditional merchants and the trading banking model. But he also said the trading house would not want to be regulated like a bank given that the banks' model was considerably different from what trading houses do.

(Reporting by Dmitry Zhdannikov; Editing by Marguerita Choy)