CMC Markets’ focus remains on conversion of clients to elective professional status

Maria Nikolova

The broker continues to increase the proportion of UK and European revenue that is generated by elective professional clients.

There are several days left before the new ESMA regulations for CFD offering to retail clients get into effect, with brokers based in the UK and the EU setting the stage for the new trading conditions and adapting their policies and strategies in line with the requirements. Online trading company CMC Markets Plc (LON:CMCX) has earlier today provided an update on its performance for the quarter to June 30, 2018, with the broker highlighting the potential impact of the new regulations on its European business and strategy.

In its filing with the London Stock Exchange, CMC Markets notes the regulatory changes introduced by ESMA will take effect from August 1, 2018, and that the Group continues to grow the proportion of UK and European revenue that is generated by elective professional clients. Let’s stress that the new rules for CFD offering apply only to retail clients.

As previously guided, the broker continues to expect that revenue from professional clients will account for at least 40% of UK and European revenue (on a rolling 12-month view). Conversion of clients to elective professional status remains a key focus for the business.

CMC also updated on the developments around its partnership with ANZ. Today, the broker said it was making good progress developing its white label partnership with ANZ Bank in line with its plan. As part of this transaction, in early July, the Group successfully completed a major delivery milestone with the migration of 103 intermediaries to the CMC Stockbroking platform. The migration of ANZ Bank retail clients, is on track to take place in September.

Regarding CMC’s performance in the three months to end-June 2018, the broker said its net operating income for the first quarter was moderately above the same period last year, with the Group’s focus on premium clients driving an 8% increase in revenue per active client for the period.

Costs for the full year are expected to be moderately higher than FY18 as CMC continues to invest in strategic initiatives to drive future growth. The costs for the first quarter are in line with these expectations.

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