FinanceFeeds can categorically confirm that despite mainstream British media reports during the past 24 hours, CMC Markets has not had any discussions at any commercial level about leaving the UK and is instead lobbying the FCA in the interests of this industry and clients with regard to the new CFD proposals by the British regulator.
The left-wing mainstream media in the United Kingdom has once again placed its own agenda before correct analysis. This time by quite incorrectly insinuating that British multi-asset electronic trading giant CMC Markets may consider a move away from London to a non-descript European mainland destination following the Financial Conduct Authority (FCA)’s proposals last week to invoke a series of rulings that would restrict the method by which contracts for difference (CFDs) are provided.
This morning, one particular London-based mainstream business focused newspaper made the outlandish claim that CMC Markets, a company which was established in 1989 by Peter Cruddas, one of the most widely respected businessmen in London who spent a number of years as the Treasurer of the Conservative Party, and has a market capitalization is £406 million, recently completing the development of its next generation proprietary trading platform at a cost of $100 million, would seek to exit London and re-establish in Germany, a socialist country with no retail financial markets or electronic trading presence on the world stage whatsoever.
With no basis whatsoever, and referring to a generic corporate statement made by CMC Markets last week following the FCA’s announcement.
The statement said “The board of CMC will consider all options open to the business to ensure that shareholder value is delivered whilst continuing to offer the highest levels of customer protection. Until CMC has finished discussions with the UK and German regulators as part of the consultation process the board is not in a position to make any comment on the outcome of its review.”
Not at any point, publicly or privately, has CMC Markets stated that it is to leave the UK, and to report such is indeed misleading.
The mere circumstance that Britain’s FCA has proposed leverage restrictions as well as a series of other criteria which will have to be adhered to by CFD brokers when many electronic trading firms in Britain herald CFDs as a core business activity, yet BaFIN in Germany has stated that it will allow unlimited leverage and will insist on insurance against negative balances (thus encouraging trade warehousing rather than a more transparent ecosystem) is absolutely not a basis to assume that any British firms will up sticks and move to Germany, in the same way that Tier 1 banks which distribute FX liquidity from London will not be moving out of the world’s most advanced financial center post Brexit, to Europe, which is a wasteland by comparison, as was incorrectly suggested by many mainstream newspapers.
CityAM’s report states that “Spreadbetting giant CMC Markets will consider moving its HQ away from London if the City watchdog pushes ahead with a clampdown on the industry.”
FinanceFeeds spoke to CMC Markets in detail this morning with regard to this.
CMC Markets explained to FinanceFeeds directly “There are no plans at this stage, as the board of directors of this company have discussed anything at all.”
“What has happened thus far is that we are going through the process of consultation with FCA and with the German regualtor, BaFin, which also issued a consultation paper on CFDs, and part of the consultation process is that as an industry, as well as a corporation, and in the interest of our clients we are lobbying the regulator and putting our point of view across, and hopefully there will be revisions to the consultation paper. As a consequence it is impossible to agree to anything before we have the full information on all of these factors.”
“We of course are trying to be as careful as possible, and things have been misinterpreted” explained CMC Markets.
“We can confirm that there has been no decision made. To completely clarify this, any decision would have to be ratified by the board and we wouldn’t be making such a decision of this nature that quickly. We cannot categorically say we are going to end up on a specific jurisidiction. We have to come out of that consultation process with full information, which will form a basis as to what to decide in terms of policies going forward” explained CMC Markets.
Most certainly, it is FinanceFeeds opinion that CMC Markets being a stalwart of the intrinsically British CFD and spread betting industry, and will remain a prominent and top quality company within its home territory of London, the number one center for this industry in terms of technology, liqudity, infrastructure and commercial leadership prowess.
In addition to the claims made by CityAM, Sky News reported that CMC Markets will consider relocating its HQ, where around 350 staff are based, to Germany.
CMC Markets does indeed have significant business in Germany, however its mainstay is its British client base, which have been garnered over a 27 year time period, during which the company has understood its domestic market to a high level, resulting in the loyal British customer base that it has today, forming the vast majority of its retail clients.
Mr. Cruddas, who was an active supporter of the campaign which was in favor of Britain’s exit from the European Union in the run up to the referendum this summer, to the extent that he donated £1 million to the cause of encouraging British politicians and voters to leave the European Union, is a massive believer in London’s superiority as the world’s number one financial center.
CityAM, whilst a business-focused newspaper, was led by Allister Heath, who joined in 2008, who was superseded by Daily Express editor David Hellier until 2015 when current editor Christian May took the role.
Whilst the newspaper endorsed the Conservative Party in the 2010 general election, it was critical of many policies, and has during the past few months run a series of pro-European and anti-Brexit articles which place an emphasis on instilling a thought process that any departure from the European Union for Britain would cause economic difficulties. (My view is that leaving the EU would strengthen and empower Britain – Ed).
Under Allister Heath, the newspaper retained its business focus but had adopted a liberal philosophy – and liberals are quite commonly proponents of mainland Europe’s involvement in British affairs.
To make a statement of this nature without any basis is to misunderstand the entire structure of Brtain’s retail electronic trading ecosystem, which is, well – intriniscally British. And, even if the firm did move to Germany (which is not going to happen), it would still need to adhere to FCA rulings to service its majority client base in Britain, and would be worse of as it would be subject to European rules which are business unfriendly compared to Britain which understands the electronic trading world better than anyone, anywhere.
Sky News was established as part of the Murdoch empire, which is by ethos traditionally liberal-leftist and pro-EU. The Sky News report yesterday on this matter did not contain any concrete corporate statement to the effect that CMC Markets was actually considering any move from London.
Mr. Cruddas is not only a massive patriot but also has a deep understanding of the entire trading infrastructure and market in Britain that he has instilled into the company of operation via a sophisticated proprietary platform that has engaged 27 year loyal domestic market client base.
Last week, FinanceFeeds produced an opinion that now is the time to invest in IG Group and CMC Markets stock, as the temporary downturn will be very soon rectified. Britain is home to these firms now, and always will be.
Image: Intrinsically British: CMC Markets $100 million Next Generation proprietary trading platform. Copyright FinanceFeeds#BaFin, #CFDs, #CMC, #fca, #Germany, #uk