CMC Markets Reports Higher Active Accounts, Lower Revenues per Client

The London-headquartered brokerage is preparing for the new EU regulatory framework.

CMC Markets, one of the biggest forex, CFDs and spread betting providers in the UK, has just reported that its third quarter was in line with the previous year. The company shares the information in its interim management statement for the period from the 1st of October to the 31st of December 2016.

CMC Markets saw more active clients during the period, due to more robust client trading activity when compared to the previous quarter. The broker reports that active clients have increased by 13 percent when compared to last year to 41,234. The figure was offset by declining revenues per client, which were 13 percent lower than a year ago.

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The company is outlining in a statement that its product offering has been extended in Europe with the launch of ‘Knockouts’ in Germany and Austria.

CMC Markets has also marked increasing growth in its institutional offering.

FCA, BaFin and AMF Regulatory Announcements

CMC Markets states in its announcement that the UK, German and French financial regulatory announcements will impact the company’s business once they are implemented. The company is not providing any assessments as to what the impact might be, due to the unknown response of client behavior to the changes.

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The London-headquartered brokerage highlights that the new regulations are not expected to harm the company’s position in the industry, due to its solid balance sheet and substantial resources to counteract any declines in client activity in the aforementioned jurisdictions.

Commenting on the company’s results, the CEO of CMC Markets, Peter Cruddas, says: “The regulatory changes that will be implemented later in the year will undoubtedly present the Group with some short- to medium-term challenges as clients and the industry adjust.”

“As a well-capitalised and established business with 14 offices globally, a strong institutional offering and a business model that is focused on experienced clients, I believe that in the longer term the Group’s competitive position will be strengthened compared to competitors whose business model is more focused towards inexperienced clients,” he elaborates.

The company continues to be fully engaged with the regulatory agencies.

Cruddas shared his views on regulation: “We are supportive of a clear and consistent regulatory approach that all providers have to follow to ensure client interests are best served. We will be evolving our product offer to limit clients’ downside risk with the launch of a limited risk account and continue to offer our guaranteed stop loss order.”

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