Ranks of commodities brokers dwindle as U.S. futures industry evolves

Reuters reports:

U.S. commodities brokerages - a key focus of reforms designed to make the financial system safer - are increasingly struggling to eke out a profit, spurring many firms to think about leaving the business, or trying to boost commissions.

The brokers, known as "futures commission merchants" or FCMs, are paying increasingly large sums to comply with new regulations, bolster their cyber security systems, and do business with exchanges, among other areas.

The vanishing FCMs are one way the futures trading business is changing in the United States. Another example is the imminent closure of the grains futures "open-outcry" pits at CME Group Inc, although the two cases are not necessarily related.

There were 74 FCMs in the United States at the beginning of 2015, down from 93 a year earlier, and 154 prior to the financial crisis, according to the Commodity Futures Trading Commission.

Will commodities exchanges eventually be allowed to take the function of an FCM?