CMC Markets Plc Response to ASIC consultation paper (9455J)
22 August 2019 - 8:52PM
UK Regulatory
TIDMCMCX
RNS Number : 9455J
CMC Markets Plc
22 August 2019
22 August 2019
CMC Markets Plc
Response to ASIC consultation paper and update on current
trading
CMC Markets plc ("CMC") notes the announcement by the Australian
Securities and Investments Commission ("ASIC") issued today
regarding a consultation on the application of product intervention
powers on the issuance and distribution of binary options and
contracts for difference to retail clients.
In its consultation paper, ASIC are seeking industry comment on
the proposed introduction of regulatory changes, covering binary
options, leverage ratio limits, margin close-out, negative balance
protection, inducements and disclosure. The changes proposed are
similar to that already implemented in other jurisdictions,
including ESMA. ASIC is required to consult with the industry
before making a product intervention order. Any product
intervention order which ASIC makes is only effective for up to an
initial period of 18 months.
Fair outcomes for clients have always been a focus for CMC.
Benefitting from its proprietary technology and focus on targeting
higher valued experienced clients, CMC is well prepared to respond
quickly and manage any regulatory changes as required.
CMC noted in its Q1 Trading Update on 25 July 2019 that the
imposition of limits by ESMA had resulted in a period of
transition, where clients adjusted their trading behaviour to the
new environment and CMC adjusted its model accordingly. Following
the stabilisation noted in the Q1 update, the Board is pleased to
see that net operating income has performed strongly through the
summer.
Australia is an important part of CMC's balanced and diverse
portfolio of regions and products, with a large non-leveraged
stockbroking business and a leveraged CFD business aimed at more
sophisticated investors. In the last financial year ended 31 March
2019, the Australian business as a whole represented 31% of the
Group's net operating income. Within that, CFD net revenue
constituted 20% of Group CFD (and Spread bet) net revenue and 17%
of the Group's net operating income.
CMC values regular and transparent dialogue with regulators. Key
to this dialogue is CMC's belief in a consistent approach to
regulation, a level playing field, and raising standards in the
industry. CMC will continue to engage with ASIC over the coming
months and will harness the experience gained from recent UK and
European regulatory changes when responding and adapting to any
measures implemented by ASIC.
Outlook
On the basis of recent and current trading as noted above, the
Board believes that CMC is currently on track to report net
operating income and Profit Before Tax for the year ended 31 March
2020 that is marginally ahead of the upper end of the current range
of analysts' forecasts.(1,2)
Forward looking statements
This trading update may include statements that are forward
looking in nature. Forward looking statements involve known and
unknown risks, assumptions, uncertainties and other factors which
may cause the actual results, performance or achievements of the
Group to be materially different from any future results,
performance or achievements expressed or implied by such forward
looking statements. Except as required by the Listing Rules and
applicable law, the Group undertakes no obligation to update,
revise or change any forward looking statements to reflect events
or developments occurring after the date such statements are
published.
Enquiries
CMC Markets Plc +44 (0) 20 7170 8200
Euan Marshall, Interim Chief Financial Officer
Camarco +44 (0) 20 3757 4980
Geoffrey Pelham-Lane
Ed Gascoigne-Pees
Jennifer Renwick
Notes to Editors
1. The range of publicly available analysts' forecasts for net
operating income for 2020 is GBP149.2m to GBP159.6m, with a mean of
GBP154.0m based on company compiled consensus as at the date of
this announcement.
2. The range of publicly available analysts' forecasts for
Profit Before Tax for 2020 is GBP23.4m to GBP26.3m, with a mean of
GBP24.6m based on company compiled consensus as at the date of this
announcement.
About CMC Markets plc
CMC Markets plc, whose shares are listed on the London Stock
Exchange under the ticker CMCX (LEI: 213800VB75KAZBFH5U07), was
established in 1989 and is now one of the world's leading online
financial trading businesses. The company serves retail and
institutional clients through regulated offices and branches in 13
countries, with a significant presence in the UK, Australia,
Germany and Singapore. CMC Markets offers an award-winning, online
and mobile trading platform, enabling clients to trade up to 10,000
financial instruments across shares, indices, foreign currencies,
commodities and treasuries through contracts for difference
("CFDs"), financial spread bets (in the UK and Ireland only) and,
in Australia, access stockbroking services. More information is
available at http://www.cmcmarkets.com/group/.
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END
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