CMC Markets Contemplates Job Cuts, Headquarters Move amid FCA Crackdown

Sky News reports that sources with knowledge of the matter have shared with the media that a relaxation is on

CMC Markets is reportedly considering a move of its London headquarters should the U.K. Financial Conduct Authority proceed with its regulatory reshuffling, Sky News reports. The plans of the spread betting, forex and CFDs trading provider are to relocate from London, according to sources cited in the story.

According to Sky News, the board of the company, headed by Peter Cruddas, has been contemplating a number of job cuts and a potential move away from London. The company’s major shareholder and founder, Mr Cruddas has been a donor of the Conservative party and a Brexit proponent.

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Insiders shared with Sky News that the top destination for new headquarters is Germany. A move of the firm’s London headquarters would mean the loss of about 300 jobs in the City.

Brexit proponents have been advocating that the FCA take a lighter approach towards the financial sector, but last week the UK watchdog poured cold water on the idea that the UK could become a laxer regulatory destination.

Despite the discussions, there have been no preparations made by the company. A decision on the matter will not be taken by CMC Martkets before the expiration of the FCA’s consultation period in March.

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Several companies from the industry listed on the London Stock Exchange, including CMC Markets, IG Group and Plus500, have lost more than £1 billion of their market cap after the FCA’s announcement last week.

The speculation about a move to Germany comes just after an announcement made by the German financial regulator BaFin that it is not going to limit leverage offered to retail clients. The watchdog has chosen to focus instead on negative balance protection and stated that providers that do not offer negative balance protection will not be allowed to provide their services in the country.

Source: Trading View
CMC share performance since April 2016

Sky News also reports that sources have shared with the media that the CEO of IG Group, Peter Hetherington was in Germany yesterday to discuss with BaFin the upcoming regulatory reforms.

In a letter sent out to clients, IG has informed its clients that under the FCA’s proposed changes to the regulatory framework, they would need to beef up their trading accounts up to 10 times in order to retain the same access to the market.

FXCM has also informed its clients in a letter that it is fully aligned with the views of the FCA on bonuses and profitability reporting, however the proposed changes to leverage are going to affect a lot of clients.

Clients of UK brokerages can submit their views to the FCA before the 7th of March in order to protect their own interests and share their viewpoints with the regulator.

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