IG Group has just filed with the Regulatory Information System (RIS) an announcement that details some performance metrics for the first half of its fiscal year. For the period ending November 31st, which is the first six months of the company’s financial 2018, the retail brokerage is performing strongly.
Revenues of IG Group are expected to be higher by 9 percent when compared to fiscal 2017, which included the Brexit market turmoil and Trump’s election. On a comparative basis, the decline in volatility appears not to have affected the company’s revenues. The increase in revenues totals about £267 million.
The retail brokerage also marked a 7 percent decline in operating costs. IG Group outlines that the primary driver for savings is lower levels of advertising and marketing spending. During the same period last year, the brokerage was engaged in an active marketing campaign that netted a 22 percent increase in advertising costs.
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Ongoing Regulatory Uncertainty
IG Group once again highlights that the coming quarters will be mired in regulatory uncertainty. The firm’s business is heavily reliant on its European operations. The retail trading industry is expecting a new set of rules in the first quarter of next year as the FCA and the ESMA are working together to establish better protection for retail clients.
Many jurisdictions worldwide have engaged in material decreases on the maximum leverage allowed for retail clients. With Japanese authorities mulling a cut to 1:10 from the already stringent 1:25, foreign exchange trading for retail clients could become difficult.
Discussions amongst regulators and the industry are still ongoing regarding the prospect of more diligent onboarding procedures. Retail clients are at present required to submit answers to a questionnaire under the European MiFID directive. MiFID II, however, could lead to material changes across different markets in the EU.
IG Group is expected to publish the full results for the first half of fiscal 2017 in late January.