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CMC Markets plc
Annual Report and Financial Statements
2022
CMC Markets plc Annual Report and Financial Statements 2022
CMC is a leading global
providerof online trading
withacomprehensive
retail, professional and
institutionaloffering.
Strategic report
2 CMC at a glance
6 Highlights 2022
7 Investment case
8 Chairman’s statement
10 Our business model
12 Stakeholder engagement
14 Our markets
16 Chief Executive Officer’s statement
20 Our strategy
22 Key performance indicators
25 Technology and Innovation
28 Sustainability
40 TCFD
44 Financial review
50 Risk management
51 Principal risks
Corporate governance
58 Board of Directors
60 Governance report
69 Group Audit Committee report
73 Group Risk Committee report
75 Group Nomination Committee report
78 Directors’ Remuneration report
100 Directors’ report
Financial Statements
105 Independent auditors’ report
113 Consolidated income statement
114 Consolidated statement of
comprehensive income
115 Consolidated statement of
financialposition
116 Parent company statement of
financialposition
117 Consolidated and parent company
statements of changes in equity
118 Consolidated and parent company
statements of cash flows
119 Notes to the consolidated and parent
company Financial Statements
Shareholder information
159 Shareholder information
164 Appendices
The business was started in 1989
withasimple ethos: to make financial
markets truly accessible for investors.
Thisfundamental belief remains at the
heartof everything we do at CMC Markets
and staying true to that has been pivotal
toour success.
Read more at cmcmarketsplc.com
“ Our purpose
istoconstantly
maintain a superior
and unrivalled
technology
experience for
ourclients.”
Lord Cruddas
Founder and CEO
1
CMC Markets plc
Annual Report and Financial Statements 2022
CMC at a glance
Empowering our clients and providing
first-class access to the evolving
landscape of investing and trading
Listening to our clients’ demands is
integral to what we do. Our continued
investment in technology will facilitate
an ever-improving range of financial
products to satisfy these demands.
At CMC we continue to invest in the
diversification of our product offering,
in particular expanding our reach to
non-leveraged products across existing
and new geographies. We believe
this will benefit our clients as well as
support the needs of our stakeholders
in driving earnings and profitability for
the Group.
Bespoke solutions in a dynamic world
Societal shifts in technology and demographics are driving far-reaching
changes in how platform providers serve the new generation of trading and
investing clients. Our purpose is to constantly maintain a superior and
unrivalled bespoke technology experience to our clients.
Leveraged
Internal risk management
Trade and Risk data is stored in a high frequency
tick database, where we record all stages of the risk
management system. We have large Quantitative
Analytics and Data Science teams which build out
both the hardware and software side of the analytic
environment to ensure that client order flow is
managed in the most appropriate way. Data science
and machine learning models are playing an ever-increasing
role in our real-time and offline decision making. Our
aim is to continually provide market leading access
to liquidity to our clients, with best-in-class platform
resilience through every part of our of offering.
Improving product offering and
pricingefficiency
We continue to invest in the diversification of our
products to enhance functionality for our clients.
We already offer over 10,000 products over our
leveraged platforms. Delivering this with the most
efficient pricing structure is paramount. Our pricing
system is continually evolving both in terms of
sophistication and latency minimisation. Latency is
measured in microseconds using high accuracy clock
time-stamping at multiple points through the system,
with real-time monitoring. Best execution internal
reporting allows for the setting of high standards of
execution quality.
Read more on page 25
Strategic report
2
CMC Markets plc
Annual Report and Financial Statements 2022
Non-leveraged
Expansion in non-leveraged businesses
Secular shifts in investment trends present high
growth opportunities across non-leveraged investment
platforms globally. Building on the successes from
our Australian stockbroking business, the launch of
our UK non-leveraged platform in April 2022 allows
us to tap into the growth being seen in self-managed
investing. This will, over time, drive a more balanced and
diversified income stream for the Group.
Read more on page 26
Leveraged and non-leveraged
Technology-backed business to business
(“B2B”) offering
In addition to our retail offering we provide
technology-backed solutions to mid-sized and large
financial institutions. CMC already provides execution,
clearing and settlement services as a service provider
to a number of Australian financial service licensees.
Our business to business (“B2B”) partnership directive
will now be expanding across all our existing as well as
new geographies over the coming 12 months. Growth
from our non-leveraged operations will reposition our
business to the some of the fastest growing shifts in
trading and investing.
Our Tomorrow - taking a positive position
At CMC Markets, our vision is to unite with the global
capital markets shift towards a sustainable future, by
providing responsible and innovative technological
solutions that protect, educate and inspire our people
and clients to invest for the future.
Read more on page 28
Strategic report
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CMC Markets plc
Annual Report and Financial Statements 2022
Strategic report
The products we provide
Contracts for difference (“CFDs”)
A financial derivative product which allows
clients to speculate on price changes in
anunderlying financial asset, without certain
costs and limitations associated with
physical ownership. More information is
available on www.cmcmarkets.com.
Spread betting
A product available exclusively to
residents in the UK and Ireland which
is similar in many aspects to our CFD
product. More information is available
onwww.cmcmarkets.com.
Technology-driven liquidity solution
Under our B2B arm, CMC Markets Connect
acts as a non-bank liquidity provider offering
access to a wide range of asset classes
including Spot FX, the global institutional
standard in FX trading, cash equities and
ETFs. For larger institutions we are able to
offer bespoke solutions to help facilitate and
access multi-asset class liquidity.
Outsourced trading platform
technology
We outsource our platform technology to
clients also under the CMC Markets Connect
brand, where our award winning CMC trading
platform can be fully customised under a
white-label partnership or alternatively under
a neutrally branded platform for regulated
entities looking to introduce clients or trade
on their behalf.
Stockbroking
In our Australian stockbroking business
clients are offered the opportunity to trade
Australian shares and international shares
from over 41 exchanges in over 15 countries.
This has been supported through the launch
of a fully functional native mobile application
offering a variety of instruments including
shares, options, managed funds, warrants and
exchange traded funds (“ETFs”).
Non-leveraged
Building on the strength and success
oftheAustralian stockbroking business,
2022will mark CMC’s first move into the
non-leveraged business in the UK. Clients
willhave full access to international shares,
tax wrappers (ISAs and SIPPs), funds and
ETFs. Our aim is to provide our clients
sector-leading analytics and news content
aswell as opportunities to empower them
toinvest across a range of sustainable
andresponsible investment opportunities.
Thenew platform is based on the existing
technological excellence seen across the
existing leveraged business and will, in time,
have the potential to deliver a significant
newearnings stream for the Group.
CMC at a glance continued
£
Read more about our business model on page 10
Strategic report
4
CMC Markets plc
Annual Report and Financial Statements 2022
Our geographical reach
CMC Markets operates in 13 offices across many of the
world’s leading financial centres. The Group is built on
a hub-and-spoke model, with London being the Group’s
headquarters, Germany being the hub for our European
operations and Sydney being the secondary hub to support
the Asia Pacific & Canada (“APAC”) region. This approach
enables CMC to achieve the optimum balance between
operational gearing and efficiency. In addition, we plan to
launch a new investment platform in Singapore within a year,
as well as considering two other jurisdictions for launch the
following year.
UK 28%
Europe 16%
APAC & Canada 56%
Our client base
CMC attracts retail and elective professional clients to its
Next Generation platform and has a considerable proportion
of trading activity generated from institutional clients and
stockbroking clients.
Our shift into additional non-leveraged markets will also
bringa new wave of clients with which we hope to build
long-standing partnerships. All our clients are treated with the
high standards we set ourselves when it comes to protection
and suitability.
Leveraged B2B
2
16%
Non-leveraged B2B 14%
Leveraged B2C
3
67%
Non-leveraged B2C 3%
Read more about net trading revenue on page 44
1 CFD and spread bet gross client income net of rebates, levies and risk
management gains or losses and stockbroking revenue net of rebates.
2 Business to business (“B2B”) – revenue from institutional clients.
3 Business to consumer (“B2C”) – revenue from retail and professional clients.
4 Active clients represent those individual clients which have traded with or held CFD
or spread bet positions or which traded on the stockbroking platform on at least
one occasion during the financial year.
Continents
4
Countries
12
Offices
13
Total active clients
4
310,363

Net trading
revenue
1
by
region
Net trading
revenue by
client base
Strategic report
5
CMC Markets plc
Annual Report and Financial Statements 2022
Highlights 2022
Net operating income
1
£281.9m
21
£409.8m
£252.0m
20
22
£281.9m
Statutory profit before tax
£92.1m
£224.0m
£98.7m
22
£92.1m
21
20
Leveraged active clients
2
64,243
21
20
76,591
57,202
22
64,243
Leveraged platform uptime
99.95%
99.95
99.95
99.95
21
20
22
Non-leveraged active clients
2
246,120
232,053
181,630
246,120
21
20
22
Leveraged revenue per active client
3
£3,575
£3,750
21
20
£4,560
22 £3,575
Basic earnings per share
24.8p
30.1p
21
20
61.5p
2.0
22
24.8
Ordinary dividend per share
5
12.38p
15.03p
2.0
21
20
30.63p
2.0
22 12.38
£240.6m
Gross leveraged client income
4
£288.5m
21
20
£335.3m
22
£288.5m
Focusing on high value clients and
diversifying the business
Operational highlights
• Whilst annual leveraged client
numbers are down 16% from 2021,
monthly active clients are up a third
compared to pre-pandemic levels.
• Non-leveraged active client numbers
increased 6%, a new record.
• Retention of CFD client income
6
of80%.
• Released CMC Invest platform in
the UK in April 2022, a significant
development for the Group which
represents a milestone in its
expansion into additional non-
leveraged businesses.
• Operational resilience remains high,
with leveraged platform uptime
of99.95%.
• Stockbroking business finished
2022 with record period-end Assets
under Administration (“AuA”).
• Leveraged revenue per active client
down £985 (22%) to £3,575.
• B2B represents 30% of net trading
revenue at £82.5 million.
Financial highlights
1 Net operating income represents total
revenue net of introducing partner
commissions and spread betting levies.
2 Active clients represent those individual
clients who have traded with or held CFD or
spread bet positions or who traded on the
stockbroking platform on at least one
occasion during the financial year.
3 Net trading revenue generated from CFD and
spread bet active clients. A reconciliation of
revenue alternative performance measures
(“APMs”) to the Group’s primary statements
can be found on page 164.
4 Spreads, financing and commissions on CFD
client trades.
5 Ordinary dividends paid/proposed relating to
the financial year.
6 The percentage of CFD gross client income
retained after rebates and gains or losses
from risk management activities.
Read more about net trading
revenue and our financial
measures on page 44
Strategic report
6
CMC Markets plc
Annual Report and Financial Statements 2022
Investment case
CMC Markets:
five reasons to invest
Our diverse
product
offering
15%
share of Australian
stockbroking market
1
Launch of the UK non-
leveraged business. Accessing
a UK D2C market with some
£320billion
2
of AuA
We’re investing to diversify by offering new products and
functionality across both our leveraged and non-leveraged
platforms. CFD and spread bet revenue remains at the core of
what we do. This is balanced with a world-class stockbroking
business in Australia. Similarly, the launch of CMC Invest, the
new UK investment platform, underpins our expansion into
the high growth opportunities being seen across all of our
geographies and meets client demands.
Read more about
our product offering
on pages 25 to 27
Our
geographical
reach
56%
of net trading revenue
generated outside the UK
andEurope regions
Our global technology platforms allow access for retail,
professional and institutional clients through regulated
offices and branches in 12 countries, with a significant
presence in the UK, Australia, Germany and Singapore.
The agreement to transition Australia and New Zealand
Banking Group Limited’s (“ANZ’s”) Share Investing client base
to CMC for AUD$25 million was agreed during the year. The
transaction involves the transition of approximately 500,000
ANZ Share Investing clients, with total assets in excess of
AUD$43 billion.
Read more about
our geographical
diversity on
page 5
Our
Tomorrow
Read more about
our sustainability
framework on
pages 28 to 39
We are proud to introduce our new sustainability strategy:
“Our Tomorrow: taking a positive position”, that will shape
the next few years of sustainability activity for the Group.
“Our Tomorrow” describes how we seek to embed
sustainability across the business. We have identified five
core pillars that are our areas of focus which highlight
how we protect, empower, innovate and adapt to be a
responsible business that is committed to the needs of
people and our planet.
5
core sustainability pillars
Our client
focus
Read more about
our client service on
pages 25 to 27
Our clients are at the heart of what we do, and their input
is intrinsic to improving our business processes across
product development, marketing and client services as
we tailor new developments and target improvements. We
employ and train high quality client services staff to ensure
best-in-class client service. Platform resilience and user
experience is at the core of all developments and upgrades
we deploy.
310,363
64,243 leveraged active
clients and 246,120
non-leveraged active clients
1 ASX and Chi-X combined trading statistics – IRESS.
2 Platforum data February 2022.
Read more about
our technology on
pages 25 to 27
The demands of our clients continue to evolve. Our purpose
is to constantly maintain a superior and unrivalled technology
experience for our clients. Continuous investment in our
proprietary technology across both our leveraged and
non-leveraged platforms allows us to offer a wide suite of
products. Our online and mobile platforms are continuously
ranked as best-in-class from our clients.
10,000+
financial instruments traded
across the CFD platform
and over 40,000 instruments
within stockbroking
Award
winning
platforms
Strategic report
7
CMC Markets plc
Annual Report and Financial Statements 2022
Strategic report
Chairman’s statement
Our strategic investments in technology,
client service, professional andinstitutional
clients and income diversification through
new products, have led to a strong financial
performance in 2022. This performance,
along with the launch of the CMC Invest
platform in the UK, providesthe Group
with a strong base from whichwecan
continue tofocus on innovation and agile
andresponsivetechnologydevelopment.
Our resilient strategy delivers
a record year for the Group
“ The benefits of the Group’s strategy are becoming
more apparent. Through engagement with clients
and the expertise of our staff, the Group is
continuing to develop clear opportunities for
significant growth within all of our markets.”
James Richards
Chairman
The Board’s clear vision of the Group’s strategy of income
diversification through adapting and building on our superior
technology is starting to crystallise. The benefits of the Group’s
strategy are becoming more apparent. Through engagement with
clients and the expertise of our staff, the Group is continuing to
develop clear opportunities for significant growth within all of
our markets.
Throughout all parts of the product development process, we engage
with clients to provide input into improvements that can be made to
our products and propositions. In addition, we have made significant
progress on initiatives to improve staff engagement. The combination
of engaged clients and employees results in a robust and agile
business focusing on medium to long-term value generation, which
supports our purpose, values and strategy.
Results and dividend
Net operating income fell 31% to £281.9 million; however, when
excluding the exceptional COVID-19 affected 2021, the Group
generated an increase in net operating income of 12% on 2020.
This is a strong result for the Group, as it represents a record year
outside of 2021.
The strong net operating income performance has generated profits
after tax of £72.0 million. The Board recommends a final dividend of
8.88 pence per share which results in a total dividend payment of
50% of profits after tax.
Strategic report
8
CMC Markets plc
Annual Report and Financial Statements 2022
Outlook
Our focus on improving and building on our existing technology
underpins our strategy of exploiting our existing leveraged technology
with both new and improved products and expanding into new
geographies in our non-leveraged business.
The strengths and robustness of our technology have been demonstrated
through the white-label agreement for Australia and New Zealand
Banking Group Limited (“ANZ”), culminating in the announcement of
the acquisition of its Share Investing clients.
The strategy also forms the foundation for the launch of our new UK
non-leveraged investment platform in April 2022. The new platform
is being rolled out to the market over the coming year and augurs
well for the Group’s future. Our clear focus on revenue diversification
will continue throughout the coming year as will our assessment
of how best to address the realisation of future value for the two
broadly different businesses, namely leveraged and non-leveraged,
bothunderpinned by our technology.
James Richards
Chairman
8 June 2022
Board and governance
As discussed in the 2021 Annual Report and Financial Statements, the
Board conducted an internal governance review in 2021, resulting in
the appointment of external advisers, Independent Audit, in January
2021. This review was concluded within 2022, resulting in very positive
changes to the information the Board receives, improvements in the
scope of the Nomination Committee including greater involvement in
people strategy, and improvements in ownership and presentation of
the Group’s risk information. More information on the changes can be
found on pages 66, 74 and 76.
We are sorry to lose Clare Salmon, who is not putting herself up for
re-election this year, but also welcome Susanne Chishti, who brings
a diverse view of developments and trends in the wider consumer
technology environment. We are also seeking, via agents, a further
Non-Executive Director to cover the gap left by Clare’s departure,
further details of which can be found on page 76 of the Nomination
Committee report.
People and stakeholders
Our staff are our greatest asset and their work on delivering against
our strategic initiatives has driven the strong performance across
all business lines, along with delivering new products and features
to communicated timescales. On behalf of the Board, I would like to
thank them all for their considerable contribution.
In addition, our staff have shown incredible resilience and flexibility
when faced with travel and work restrictions caused by the COVID-19
pandemic, and have continued to do so throughout this year. No staff
were furloughed and the Group did not request any government
COVID–19 assistance. More details of what we have been doing are
presented in the Sustainability section of the report.
Financial Reporting Council
During the year to 31 March 2022 the Board received
correspondence from the Financial Reporting Council (“FRC”)
concerning a potential unlawful dividend payment in respect of the
payment of the 2021 interim dividend. On further investigation by the
Company it was concluded that similar questions had arisen in some
prior years. Details of this and the rectification process for addressing
these issues are set out on page 101 in the Directors’ Report. The
Company has made certain changes to internal processes to ensure
that these irregularities do not arise again.
Strategic report
9
CMC Markets plc
Annual Report and Financial Statements 2022
Our business model
The best trading experience
Our business enablers Our client offering
1. Technology and product
Technology and product has always been key to
the success of CMC Markets and this has won
the business recognition as the leader in our
industry for innovation and service. Recognising
that innovation is key to retaining this reputation,
the Group has continued to invest significantly
across the business to deliver new products and
offerings to our clients, with a significant
milestone achieved in the launch of CMC Invest
in the UK in April 2022.
For more information see pages 25 to 27
2. “Our Tomorrow: taking a positive
position” sustainability strategy
This year we are proud to launch the new
sustainability strategy that will shape the next few
years of sustainability activity for the Group.
“OurTomorrow” describes how we seek to
embed sustainability across the business.
Wehave identified five core pillars that are our
areas of focus which highlight how we protect,
empower, innovate and adapt to be a responsible
business that is committed to the needs of
people and our planet.
For more information see pages 28 to 39
3. Financial strength
We aim to maintain our secure capital and
liquidity structure, ensuring that it is appropriate
for the future growth and success of the Group.
This includes maintaining long-term levels of
capital to withstand the demands of fluctuations
in the financial markets and access to a healthy
level of surplus liquid resources in line with the
size of our business and the growth opportunities.
For more information see pages 44 to 49
4. Risk management
The Group’s business activities naturally expose it to
strategic, financial and operational risks inherent in
the nature of the business it undertakes and the
financial, market and regulatory environments in
which it operates. The Group recognises the
importance of understanding and managing these
risks and that it cannot place a cap or limit on all of
the risks to which the Group is exposed. However,
effective risk management ensures that risks are
managed to an acceptable level.
For more information see pages 50 to 56
Our clients are at the heart of everything that we do.
For more information see page 25
Technology platforms and risk management
Our superior platforms and technology, combined with our risk management,
deliver a best-in-class trading experience for our clients and partners.
Our trade and risk systems generate real-time pricing, automate trade
execution and optimise our risk management process through better
aggregation of client flows. They also bring scale and stability to our platforms,
especially during volatile market conditions. This enhances theclient trading
experience and lessens the risk of price quotation outages.
Technology platform
Who our clients are:
• Sophisticated
• High value
• Experienced
What we offer them:
• Cutting-edge technology
• Competitive pricing
• Excellent client services
Strategic report
10
CMC Markets plc
Annual Report and Financial Statements 2022
Leveraged
Contracts for
difference
Spread betting
White-label solutions
Multi-asset class
liquidity
Non-leveraged
Stockbroking
(UK and Australia)
White-label solutions
Business to
business
+
Business to
consumer
Our client offering How we make money
Leveraged
£48.0m
Net trading revenue, predominantly earned
through brokerage charged for the
execution of exchange traded products,
options, warrants, ETFs, managed funds,
interest rate securities and bonds. Further,
we earn fees including FX revenue on
international shares, interest on deposits,
and equity capital markets (“ECM”) income.
Other income – leveraged and non-leveraged
£4.3m
Mainly consists of interest income from client deposits, rental income and dormancy charges
Non-leveraged
How we add value
Clients
57%
gross client income generated from
leveraged clients oftenure greater
than two years
13
awards for service
platform and technology
Shareholders
Dividend per share
12.38 pence
down 18.25 pence from 2021
Earnings per share
24.8 pence
down 36.7 pence from 2021
People
66%
employee engagement
1
(2021: 61%)
24%
permanent employees with us for over
five years
Gross leveraged client income
£288.5m
Spreads
Revenue earned through maintaining a
transactional spread (the difference between
the buy and sell price) on CFD and spread
betproducts.
Commissions
These are charged on both CFD equity trades
and institutional DMA trades. Clients are either
charged a minimum commission or a
percentage based on the value of the trade.
Financing
Positions held by clients overnight may be
subject to financing costs, which can be positive
or negative depending on the direction of their
holding and the applicable financing rate.
Rebates and levies
£(20.6m)
Volume-based rebates paid to professional,
high value retail and institutional clients and
introducing brokers on selected asset classes.
Risk management gains/(losses)
£(38.3m)
Revenue or losses from management of
client positions that the Group inherits. This
consists of gains or losses which accrue to
the Group through client positions and,
secondly, the gains or losses which accrue
to the Group through the hedge positions
entered into by the Group, including hedge
transaction costs.
Retained client income
80%
The percentage of CFD gross client income
retained after rebates and gains or losses
from risk management activities.
Read more about our
non-leveraged work in our
technology section on page 26
Read more about our
non-leveraged strategy in
our CEO’s overview on page 17
1 CultureAmp internal survey. Percentage of
employees with full engagement.
Strategic report
11
CMC Markets plc
Annual Report and Financial Statements 2022
Client supplied
Client supplied
Engagement with stakeholders:
ourfuture-focused culture
Clients People Regulators Suppliers Shareholders Local community
Why we engage
Going above and beyond to care
for and protect our clients is a
core responsibility. This means
wecontinually strive to engage
with them across multiple points
of contact to ensure the Group
remains aware of, and therefore
develops products that solve,
protect and satisfy, our
clients’needs.
Our employees define our culture
and values. Fostering an engaged
workforce is central to our
strategy, enabling us to deliver
theexceptional service that keep
us at the forefront of our markets.
Providing a rewarding and safe
working environment for our
employees is a vital outcome we
strive to achieve. Every employee
needs to be given the tools to excel
within a dynamic environment.
Nurturing a diverse and
responsible workforce will allow us
to achieve our business objectives
with the expected levels of
integrity and focus we expect.
Engagement with regulators is
keyto ensuring that we are fully
compliant across all jurisdictions
we operate within. We’re taking
steps to ensure our approach is
market leading, whilst also allowing
the Group to be involved in
shaping future regulations within
the sector.
We expect all our suppliers to
demonstrate the same integrity
and accountability as we do to
our clients. Engagement with
suppliers which perform any
critical or material outsourced
service also ensures that we
remain compliant with European
Banking Authority (“EBA”)
requirements. We take a
zero-tolerance approach to
modern slavery and human
trafficking, which is reflected in
our Modern Slavery Statement
and our Group Anti-Slavery
Policy, and are committed to
acting ethically and with integrity
in all our business relationships.
Active engagement with current
and prospective shareholders
continues throughout the year.
Our teamcommunicates the
Group’s strategy and
performance, as well as
understanding the issues that
are most important to them.
Our shareholders’ support is
paramount to our success and
listening to our shareholders is a
critical part of making sure our
business is successful for the
long term.
CMC recognises that the
Group has a duty to help
improve the prospects and
living environment of the local
community. Sustainability and
social awareness are part of
ourcore values and culture.
Engagement with the
community is another way we
seek to act in the best interests
of all our stakeholders.
How we engage
CMC actively engages with clients
across a range of channels such as
our client service, sales and
product teams, in addition to client
events and our trading magazine
Opto. Our digital transformation
programme has also resulted
infurther emphasis on user
experience research with
clients,which directly inputs into
improvements that can be made
to our product and proposition.
Marketing is carried out in a
responsible way, making sure
investment product opportunities
are evolving all the time, and a new
wave of self-directed investors
opens new market segments
forCMC.
Our future success depends
onnurturing and enhancing an
environment that reflects our
diverse client base and where
employees can reach their full
potential. Our employee
engagement is driven through
numerous channels. This includes
team meetings or one-on-ones,
and formally through the designated
Non-Executive Director with
responsibility for employee
engagement. We hold a twice-
yearly global survey with follow-up
focus groups to better understand
the results and “town hall” style
forums to enable purposeful
engagement between
management and employees.
We engage in open and active
dialogue with regulators, seeking
opportunities to share the wealth
ofdata we have available tohelp
inform them in their decision
making. We ensure our actions
areat the minimum consistent
with, and frequently go beyond,
regulatory expectations. During
the year, we have responded to a
number of consultations launched
by the regulator covering areas
such as consumer protections.
Open and frequent
communication is critical in
maintaining strong relationships
with all our suppliers. All
business partners follow a
mandatory procurement
process, which was refreshed
during the year, to review the
external market and complete a
robust evaluation of all available
options. Once a supplier is
engaged, regular direct
engagement between the
business owner and supplier is
maintained through our Supplier
Relationship Programme.
The adoption of technology
continues to improve the
efficiency of our engagement.
We offer regular trading updates,
half and full year presentations,
the Annual Report and Financial
Statements, our AGM, and a
comprehensive Investor
Relations section of the website
as well as active virtual media
channels. We have an active
schedule of shareholder
meetings and roadshows, giving
our stakeholders access to the
Investor Relations and
Management teams. Shareholder
feedback and details of any
major movement in our
shareholder list are embedded
within our regular Board
meetings and are integral to our
decision making process.
The Board promotes the
support of local charities
through our staff in all our
global offices.
We promote a Charity
Champions scheme. Staff from
around the offices volunteer to
be the Charity Champion for
their group. They then engage
with colleagues to select
charities or charitable causes to
be considered for the Charity
of the Year which receives a
corporate donation from the
Group in addition to fundraising
and employee engagement
opportunities throughout
theyear.
Outcomes
2022 marks the first move into
theUK non-leveraged market with
CMC Invest. This move facilitates
the opportunity to offer greener
and more socially orientated
trading products, and to explore
how to meet the needs of a more
diverse cohort of investors.
Throughout the year the Board
received regular updates on
CMCInvest and discussed target
audience, customer experience
expectations and platform
availability, transparency and
easeof use.
A formal senior management
communication calendar has been
developed to promote diversity,
wellbeing and inclusion in the
workplace. The Board and the
Nomination Committee discussed
the outcomes from the workforce
engagement activities that took
place during the year and decided
to incorporate oversight of the
Group’s overall people strategy
into the Committee’s remit.
Further details can be found on
page 77.
Our commitment to upholding
highstandards of regulatory
compliance and aligning our
interests with clients involves
consistent dialogue with regulators
across all jurisdictions. We believe
we have forged strong partnerships
with our regulators to responsibly
benefit the operating environment
for all.
Our robust governance process
allows the Group to select the
bestsupplier for the business
andultimately our clients. Our
considered approach also
allows us to treat vendors with
respect and prioritise
collaboration and value
generation to mutually
benefitall parties, whilst
remainingcompliant with
allrelevant regulations.
Many of our shareholders have
been with us since our initial
public offering in 2016. The
regular, open and constructive
dialogue with investors
promotes confidence in the
Group’s strategy, resulting in a
strong share register built on
long-term relationships, whilst
also ensuring our continued
access to potential capital
andliquidity.
Thousands of young people
have been supported through
the charitable actions and
donations from both the Group
and its staff.
Our employees have made use
of the pound-for-pound
matching scheme offered by
the Group and also the
opportunity to help a charity or
charitable cause with an extra
day of charitable annual leave.
At CMC we know that our business has responsibilities towards all of our stakeholders.
We take these responsibilities seriously and continuously interact with all partners with
the aim of providing responsible and sustainable solutions for all.
Stakeholder engagement
Strategic report
12
CMC Markets plc
Annual Report and Financial Statements 2022
Clients People Regulators Suppliers Shareholders Local community
Why we engage
Going above and beyond to care
for and protect our clients is a
core responsibility. This means
wecontinually strive to engage
with them across multiple points
of contact to ensure the Group
remains aware of, and therefore
develops products that solve,
protect and satisfy, our
clients’needs.
Our employees define our culture
and values. Fostering an engaged
workforce is central to our
strategy, enabling us to deliver
theexceptional service that keep
us at the forefront of our markets.
Providing a rewarding and safe
working environment for our
employees is a vital outcome we
strive to achieve. Every employee
needs to be given the tools to excel
within a dynamic environment.
Nurturing a diverse and
responsible workforce will allow us
to achieve our business objectives
with the expected levels of
integrity and focus we expect.
Engagement with regulators is
keyto ensuring that we are fully
compliant across all jurisdictions
we operate within. We’re taking
steps to ensure our approach is
market leading, whilst also allowing
the Group to be involved in
shaping future regulations within
the sector.
We expect all our suppliers to
demonstrate the same integrity
and accountability as we do to
our clients. Engagement with
suppliers which perform any
critical or material outsourced
service also ensures that we
remain compliant with European
Banking Authority (“EBA”)
requirements. We take a
zero-tolerance approach to
modern slavery and human
trafficking, which is reflected in
our Modern Slavery Statement
and our Group Anti-Slavery
Policy, and are committed to
acting ethically and with integrity
in all our business relationships.
Active engagement with current
and prospective shareholders
continues throughout the year.
Our teamcommunicates the
Group’s strategy and
performance, as well as
understanding the issues that
are most important to them.
Our shareholders’ support is
paramount to our success and
listening to our shareholders is a
critical part of making sure our
business is successful for the
long term.
CMC recognises that the
Group has a duty to help
improve the prospects and
living environment of the local
community. Sustainability and
social awareness are part of
ourcore values and culture.
Engagement with the
community is another way we
seek to act in the best interests
of all our stakeholders.
How we engage
CMC actively engages with clients
across a range of channels such as
our client service, sales and
product teams, in addition to client
events and our trading magazine
Opto. Our digital transformation
programme has also resulted
infurther emphasis on user
experience research with
clients,which directly inputs into
improvements that can be made
to our product and proposition.
Marketing is carried out in a
responsible way, making sure
investment product opportunities
are evolving all the time, and a new
wave of self-directed investors
opens new market segments
forCMC.
Our future success depends
onnurturing and enhancing an
environment that reflects our
diverse client base and where
employees can reach their full
potential. Our employee
engagement is driven through
numerous channels. This includes
team meetings or one-on-ones,
and formally through the designated
Non-Executive Director with
responsibility for employee
engagement. We hold a twice-
yearly global survey with follow-up
focus groups to better understand
the results and “town hall” style
forums to enable purposeful
engagement between
management and employees.
We engage in open and active
dialogue with regulators, seeking
opportunities to share the wealth
ofdata we have available tohelp
inform them in their decision
making. We ensure our actions
areat the minimum consistent
with, and frequently go beyond,
regulatory expectations. During
the year, we have responded to a
number of consultations launched
by the regulator covering areas
such as consumer protections.
Open and frequent
communication is critical in
maintaining strong relationships
with all our suppliers. All
business partners follow a
mandatory procurement
process, which was refreshed
during the year, to review the
external market and complete a
robust evaluation of all available
options. Once a supplier is
engaged, regular direct
engagement between the
business owner and supplier is
maintained through our Supplier
Relationship Programme.
The adoption of technology
continues to improve the
efficiency of our engagement.
We offer regular trading updates,
half and full year presentations,
the Annual Report and Financial
Statements, our AGM, and a
comprehensive Investor
Relations section of the website
as well as active virtual media
channels. We have an active
schedule of shareholder
meetings and roadshows, giving
our stakeholders access to the
Investor Relations and
Management teams. Shareholder
feedback and details of any
major movement in our
shareholder list are embedded
within our regular Board
meetings and are integral to our
decision making process.
The Board promotes the
support of local charities
through our staff in all our
global offices.
We promote a Charity
Champions scheme. Staff from
around the offices volunteer to
be the Charity Champion for
their group. They then engage
with colleagues to select
charities or charitable causes to
be considered for the Charity
of the Year which receives a
corporate donation from the
Group in addition to fundraising
and employee engagement
opportunities throughout
theyear.
Outcomes
2022 marks the first move into
theUK non-leveraged market with
CMC Invest. This move facilitates
the opportunity to offer greener
and more socially orientated
trading products, and to explore
how to meet the needs of a more
diverse cohort of investors.
Throughout the year the Board
received regular updates on
CMCInvest and discussed target
audience, customer experience
expectations and platform
availability, transparency and
easeof use.
A formal senior management
communication calendar has been
developed to promote diversity,
wellbeing and inclusion in the
workplace. The Board and the
Nomination Committee discussed
the outcomes from the workforce
engagement activities that took
place during the year and decided
to incorporate oversight of the
Group’s overall people strategy
into the Committee’s remit.
Further details can be found on
page 77.
Our commitment to upholding
highstandards of regulatory
compliance and aligning our
interests with clients involves
consistent dialogue with regulators
across all jurisdictions. We believe
we have forged strong partnerships
with our regulators to responsibly
benefit the operating environment
for all.
Our robust governance process
allows the Group to select the
bestsupplier for the business
andultimately our clients. Our
considered approach also
allows us to treat vendors with
respect and prioritise
collaboration and value
generation to mutually
benefitall parties, whilst
remainingcompliant with
allrelevant regulations.
Many of our shareholders have
been with us since our initial
public offering in 2016. The
regular, open and constructive
dialogue with investors
promotes confidence in the
Group’s strategy, resulting in a
strong share register built on
long-term relationships, whilst
also ensuring our continued
access to potential capital
andliquidity.
Thousands of young people
have been supported through
the charitable actions and
donations from both the Group
and its staff.
Our employees have made use
of the pound-for-pound
matching scheme offered by
the Group and also the
opportunity to help a charity or
charitable cause with an extra
day of charitable annual leave.
Section 172
Engaging
with our
stakeholders
The Board considers the
interests of the Group’s
employees and other
stakeholders, including the
impact of its activities on the
local community, environment,
suppliers and clients, when
making decisions. The Board,
acting fairly between members
and acting in good faith,
considers what is most likely
to promote the success of the
Group for its shareholders in
the long term.
Read more about:
• the Group’s goals, strategy and
business model in the Strategic
report on pages 2 to 56;
• how we manage risks on pages
50 to 56;
• our impact on the environment
on pages 28 to 43; and
• corporate governance on
pages 58 to 104.
Strategic report
13
CMC Markets plc
Annual Report and Financial Statements 2022
Leading the market through
technology and diversification
Whilst the Group currently generates the majority of its revenue from leveraged
products, our revenue is continuing to diversify, with the non-leveraged business
growing year on year and set for further growth following the launch of the CMC
Invest non-leveraged platform in the UK in April 2022. Group revenues are split
between our three regions, the UK, Europe and APAC & Canada.
Key market driver Our response
Group
COVID-19
COVID-19 continued to cause significant disruption to
people’s lives and markets across the globe, albeit to a lesser
extent to that seen in the prior financial year.
The Group’s infrastructure continued to allow employees to work from home during
the pandemic, whilst maintaining the trading platform’s consistently high availability
rate and low trade execution times. Significant investment was made to ensure all
ofthe Group’s offices were COVID-19 secure. This continues to work well, with
individual offices adopting a tailored approach according to local regulations.
Russia/Ukraine war
The significant escalation of tensions between Russia and
Ukraine, culminating in a Russian invasion in February 2022,
continues to result in sanctions from governments in many
markets and volatility across multiple asset classes.
The Group has immaterial exposures to the Russian market both from a currency
and stock/index basis. The Group is compliant with all governmental sanctions, has
no employees operating within Russia or Ukraine, has acted to close any Russia-
based accounts and has also assessed our suppliers to ensure any critical services
provided to the Group were not adversely impacted.
Leveraged: CFD and spread bet
Volatility
Volatility in the financial markets undoubtedly acts as a call
toaction for the Group’s leveraged and non-leveraged target
market. The continuation of the COVID-19 pandemic, albeit
ata reduced level compared to the prior year, resulted in
periods of volatility across all asset classes. The Russia/
Ukraine war also resulted in volatility in late February and
March 2022.
Higher volatility results in increased trading activity from both existing clients
trading more frequently and new or previously inactive clients starting to trade.
However, short bursts of market activity which result in high velocity movements in
the products that we offer are not necessarily beneficial to our clients or the Group.
Aside from notifying clients of changing levels of market activity in a timely manner
through a flexible marketing strategy, the Group can have little influence on
capitalising more or less than competitors during short-term periods of raised
market volatility.
ASIC
The Australian regulator, ASIC, implemented new regulatory
measures from 29 March 2021. The measures are broadly
similar to those implemented by ESMA in August 2018
andinclude:
• prohibition of the issue and distribution of OTC binary
options to retail clients;
• implementation of CFD leverage ratio limits;
• protection against negative balances;
• standardised approach to the automatic close-out of retail
client positions;
• enhanced transparency of CFD pricing, execution, costs
and risks; and
• prohibition on firms offering monetary and non-monetary
benefits to retail investors.
In April 2022 ASIC extended its product intervention order,
imposing conditions on the issue and distribution of CFDs
fora further five years to 23 May 2027.
The Group continues to be supportive of regulatory change that moves towards
aglobally consistent regulatory environment.
Given that CMC was already compliant with several of the proposed measures as
aGroup standard, it was well prepared for the changes and was able to draw from
experience gained during the ESMA measures implemented in 2018.
The Group engaged with selected clients in advance of the proposed changes,
withsome electing to opt up to ensure that their leverage limits are not affected.
The impact of the change was broadly in line with Group expectations, with
retailclient numbers down 18% and turnover per retail client at ~18% of the
pre-intervention levels.
Our markets
Strategic report
14
CMC Markets plc
Annual Report and Financial Statements 2022
Key market driver Our response
Non-leveraged: stockbroking
Volatility
The elevated trading activity seen during 2021 induced by the volatility seen around COVID-19 and
social media-driven interest moderated during the year. However, the business saw increased
volatility-driven trading activity in the fourth quarter of the year, particularly around the geopolitical
uncertainty caused by the Russia/Ukraine war.
While clients enjoy the trading opportunities that volatility can present, excessive volatility can be seen
as not conducive for investors and a certain proportion will likely therefore be passive. In these
uncertain times, CMC stockbroking will continue to assist clients to identify investment opportunities
through leading tools including our award winning mobile app, algorithmic trading and enhanced
educational content.
Low cash interest rate
The historically low rate environment persisted through the period and continues to drive investors
towards higher yield asset classes including equities. This is forecast to change over the coming
period with interest rate increases seen for the first time in many years.
This, combined with a high inflationary environment, will likely see a rotation of assets. We stand ready
to support our clients by offering them the opportunity to invest in a wide range of sectors across
both local and international equities via our leading offering which, as the most comprehensive in
Australian retail broking, includes access to ASX, Chi-X and 41 exchanges in 15 international markets.
Market size and share
An independent report suggests that the Australian online investment market continued to grow
during 2022 and CMC, in combination with the ANZ Bank white-label partnership, has a combined
retail market share in the region of 15%. As a result, we continue to maintain our position as the
second largest retail broker in Australia with over 245,000 active clients (approximately one-third
above pre-pandemic levels) and are the largest provider of white-label broking services in the country
with record AuA of c. $80 billion.
Towards the end of the year, we strategically positioned our offering for the future through a targeted
retail pricing strategy, further enhancements to our mobile offering and the rollout of extended hours
trading on the US market to cater to the fastest growing segment in the market, namely millennials.
Additionally, we plan to finish the transition of ANZ Bank clients to our core retail offering in H2 2023
which will see us have the ability to offer more products and to better control the end-to-end client
journey, elevate our brand and consolidate our position as number two in Australia with approximately
another 500,000 customers under the CMC Invest brand.
Seasonality
Earnings season is a major driver of activity and as a result strong months are generally seen in both
August and February.
Market conditions
The clients we onboarded during the COVID-19 and social trading periods have remained more
actively engaged against historical trends and more likely to engage with our higher margin
international shares product.
With the expectation of somewhat moderated markets compared to that seen during COVID-19, we
offer attractive pricing in over 40,000 instruments to allow clients to capitalise on any market conditions.
1 Source: ASX and Chi-X Combined Trading Statistics – IRESS.
Strategic report
15
CMC Markets plc
Annual Report and Financial Statements 2022
Chief Executive Officer’s statement
Investing for the future
Over the last year we have taken steps to define the strategic
direction and diversification of the Group, building on our existing
technology to launch new investment platforms that will unlock
significant shareholder value and challenge the existing client
transaction fee cost structures.
There is significant opportunity and growth potential in the self-directed
investment platform space, especially in the UK, not just for improved
technology and client experience but also transaction costs and fees.
We believe commissions, execution spreads and custodial fees are
too high and too expensive for retail investors. We will utilise our
platform technology, including pricing and execution, to drive down
thetransaction costs of investments for retail clients, just like we did
in Australia, where we are the number two investment platform for
retailinvestors.
CMC is a pioneer of platform technology and boasts over 25 years
of experience in providing technology-backed solutions for B2C and
B2B clients and partners. This gives us scale, leverage and the ability
to drive down transaction costs, as well as the ability to launch new
platforms and enter new markets quickly.
For example, our new UK investment platform, CMC Invest, was
launched ahead of time and on budget. It was launched to our UK
staff in April 2022 and will be available to the broader market over
thecoming summer months.
It will include physical shares, multi-currency accounts, tax wrapper
products and third-party funds, cryptocurrencies and, in due course,
afull B2B offering.
In addition, we continue to look at expanding our non-leveraged
geographical diversification and we have recently announced we plan
to launch a new investment platform in Singapore within the next year,
as well as considering two other jurisdictions for launch in 2024.
“We continue to expand and diversify the
business into new asset classes including the
launch of a new investment platform in the
UK and the development of a new investment
platform in Singapore.
This follows the success of our investment
platform in Australia with the migration of over
500,000 investing client accounts through
partnerships (B2B) and the acquisition of the
ANZ Bank investing business.
We have ambitious plans to continue this
expansion in various other countries and I look
forward to updating investors as the strategy
expands over the short and long term.”
A new record year for CMC Group
outside of the pandemic period
“ I am delighted to report another year of strong
performance from both a strategic and financial
standpoint.Outside of the COVID-19 impacted prior
year, this is a record net operating income result for
the Group. The performance reflects the ongoing
success of our technology and partnerships (B2B)
andour continued investment in leveraged
andnon-leveraged platforms.”
Lord Cruddas
Chief Executive Officer
Strategic report
16
CMC Markets plc
Annual Report and Financial Statements 2022
As part of CMC’s strategy, we announced the acquisition of Australia
and New Zealand Banking Group Limited’s (“ANZ’s”) Share Investing
client base during the year. The transaction involved the acquisition of
approximately 500,000 ANZ Share Investing clients, withtotal assets in
excess of AUD$43 billion.
The CMC platform will offer ANZ clients a wide range of additional
benefits; these include access to enhanced market-leading mobile
apps and complementary education tools and resources, as well as
lower brokerage commissions across four major international markets
and the local Australian market.
The Group continues to progress the transition of clients, which is
expected to complete in the next 12 months.
Because of the growing diversification of the Group the Board has
begun an evaluation of the merits of a managed separation of its
leveraged and non-leveraged divisions to unlock further shareholder
value. This process is being led by the Chairman and the Board and
they will update investors later in the year.
Financial performance
As expected, against an extremely strong prior period, revenues
across our leveraged retail (B2C) businesses declined, compared to
the COVID-19 period.
In our non-leveraged business, revenues remained less volatile. Client
income retention remained strong, and the stockbroking business
continued to see growth in active clients and contributed a material
level of revenue and profitability for the Group.
Overall, Group net operating income decreased 31% versus the
prior period, to £281.9 million, but increased 12% versus 2020
(£252.0 million).
The Group’s cost base excluding variable remuneration increased by
3% to £173.1 million during the year, mainly as a result of the significant
investments in people and technology and increased marketing
spend to attract new clients.
Variable remuneration decreased by £1.7 million to £14.5 million
following the record performance and associated remuneration last
year. Overall, total costs increased by 2% to £189.8 million.
Against an exceptional prior year comparator, profit before tax at £92.1
million was £131.9 million lower than the previous year, and £6.6 million
lower than 2020. Our dividend policy remains unchanged, at 50% of
profit after tax, therefore resulting in a proposed final dividend per
share of 8.88 pence.
The underlying fundamentals of the business remain well supported;
we continue to target and retain higher value, sophisticated clients
and we have seen levels of client money, which are an indicator of
future trading potential, remain close to the record levels seen in the
prior year. Stockbroking active clients increased 6% to 246,120. Of this
increase, stockbroking B2C clients increased 21% to 56,205, with B2B
increasing by 2% to 189,915.
The balance sheet continues to reflect the strong financial position of
the Group. At the end of the year, the Group’s net available liquidity
was £245.9 million and the regulatory OFR ratio was 489%.
Q&A: The evolution of
investment platforms
Q What are the biggest challenges and opportunities faced by
CMC in respect of the evolution of investing trends?
A Investment markets are becoming increasingly competitive
with various client acquisition strategies being employed.
A fintech revolution, combined with structural social and
demographic shifts, is changing the way people invest for
good. This dramatic shift poses a significant opportunity for
CMC to utilise its technological strength to lead and expand
into these new high growth markets.
Q What are the major changes being seen in how investors are
looking to access global capital markets?
A Mobile digital delivery will dominate the next generation
of investment platforms, providing safe and secure access
to capital markets. Over time, digital delivery will steadily
replace face-to-face consultation. The future lies with cloud-
based services and personalisation. We also believe the
existing platform suite in the market isn’t fully servicing the
growing population of tech-savvy individuals that demand
frictionless onboarding, transferring and cost-effective
management of their wealth.
Q One of the core strategies for CMC is the diversification into
non-leveraged businesses. Why is this important?
A Frictionless investing and the rise of a wealthier population
are driving the structural growth in self-managed wealth.
The biggest change being seen is the shift away from
institutional to retail participation: the “democratisation” of
investing. In the UK the trends are some of the strongest –
UK direct platform AuA has increased by over 16% p.a. since
2008 and is now standing at some £320 billion. This is a
significant growth opportunity for CMC Invest to capture.
Q How do CMC’s platforms differentiate themselves in what is
a very competitive marketplace?
A CMC has a 30-year history of building and owning all
of its technology. This has been shown in our ability to
deliver award winning platforms across both our leveraged
and non-leveraged businesses. This, combined with
our long-standing prime broking relationships and risk
management systems, allows us to evolve and move faster
relative to our competition. A recent example of this has
been the launch of our new UK non-leveraged platform
that was delivered ahead of schedule and on budget.
Looking forward, this technological edge will also allow
us to expand geographically – we will be launching a new
investment platform in Singapore within a year, as well as
consideringtwo other jurisdictions for launch next year
as we continue to diversify and expand our geographic
footprint throughtechnology.
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CMC Markets plc
Annual Report and Financial Statements 2022
Regulatory change
The Australian Securities and Investments Commission (“ASIC”)
implemented measures relating to CFDs on 29 March 2021. After the
introduction of these new measures, regulatory conditions are now
more harmonised globally and we can continue to focus on growing
our business in an industry where regulatory arbitrage is reduced.
Asanticipated, the changes reduced the notional value of retail client
trading in Australia and, combined with lower market volatility, resulted
in less active client trading than in the prior period. In April 2022, ASIC
extended its product intervention order, imposing conditions on the
issue and distribution of CFDs for a further five years to 23 May 2027,
thereby improving regulatory visibility.
People and sustainability
Our people are crucial to our success, and I continue to be impressed
by their hard work and dedication. We have a very strong team
across all our business units and on behalf of the Board I would like
tothank all of our people for their commitment, especially through
theCOVID-19pandemic.
How we as a business and our people interact with each other, the
environment and society is important. CMC recognises that the Group
has a duty to help improve the prospects and living environment of the
local community. Sustainability and social awareness are part of our
core values and culture. I’m proud of the launch of our “Our Tomorrow:
taking a positive position” strategy, detailing the five core pillars of what
we stand for at CMC from a sustainability perspective.
Chief Executive Officer’s statement continued
“ The underlying fundamentals of the
business remain well supported; we
continue to target and retain higher
value, sophisticated clients.”
Lord Cruddas
Chief Executive Officer
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CMC Markets plc
Annual Report and Financial Statements 2022
Clients
Our clients are at the heart of everything we do as we continue to
develop our platforms, innovate and invest to ensure that our user
experience is industry leading as we drive client retention and lifetime
value. On top of our continued focus on our leveraged clients, I
am pleased to welcome approximately 500,000 new clients to our
Australian stockbroking business as they transition from ANZ Share
Invest and look forward to offering them new functionality and an
enhanced experience.
I also look forward to welcoming new clients to our UK non-leveraged
wealth platform, where we will strive to partner with new investors
over the longer term to help them achieve prosperity at every stage
of their lives.
Share buyback programme
On 15 March 2022, the Company commenced a share buyback
programme of up to £30 million. The Board’s decision to undertake
the buyback was underpinned by the Company’s robust capital
position and having considered the capital and liquidity requirements
for ongoing investment in the business. This buyback programme
forms part of a normal balanced approach to shareholder returns
alongside the current dividend policy. The share buyback programme
is progressing well and remains on track to be completed no later
than 30 June 2023.
Dividend
The Board recommends a final dividend payment of £25.8 million.
This is 8.88 pence per share (2021: 21.43 pence), resulting in a total
dividend payment for the year of 12.38 pence per share (2021: 30.63
pence). This represents a payment of 50% of profit after tax, in line
with policy. The Board believes that this is an appropriate payment
for the year after considering both the Group’s capital and liquidity
position and forecast requirements in the year ahead to support
business growth.
Outlook
We continue to see a lot of uncertainty, not just in the financial
markets, but across all sectors and industries. If recent years have
taught us anything it is that we must be prepared for the unexpected
and the extraordinary.
Our platforms have demonstrated that in periods of extreme volatility,
they are able to continue servicing clients robustly, enabling us to
gain trust and a reputation of stability. The investments made in our
infrastructure have served us well and will continue to do so, providing
a solid foundation upon which we can look to take advantage of
futureopportunities.
This year’s performance reflects the ongoing success of our B2B
technology partnerships and focus across our leveraged and
non-leveraged businesses.
With a large addressable market, in terms of both client numbers
and AuA, there is a huge opportunity for us to grow with a more
predictable and stable revenue stream.
This business continues to change as we look to utilise our
technology to enter new markets and new geographies and expand
ournon-leveraged offering. I look forward to updating investors
asthestrategy expands over both the short and long term.
Lord Cruddas
Chief Executive Officer
8 June 2022
CMC transitioning approximately 500,000 Share
Investing clients from ANZ Bank
• In September 2021 CMC announced the transition of
Australia and New Zealand Banking Group Limited’s
(“ANZ’s”) Share Invest client base to CMC for a sum of
AUD$25 million.
• The transaction involves the transition of approximately
500,000 Share Investing clients, with total assets in excess
of AUD$43 billion. The transaction is another significant step
in the ongoing diversification of the Group’s global business
and in the Australian market at a time when we are seeing
elevated demand for retail stockbroking services.
• With this transaction, the existing white-label technology
partnership, which has seen CMC’s trading technology
power ANZ’s Share Invest business since 2018, will come
to an end. The existing white-label partnership generated
£24.8million in net trading revenue for CMC in 2022.
• The CMC platform will offer clients a wide range of
additional benefits currently unavailable with ANZ. These
include access to enhanced, market-leading mobile apps and
complementary education tools and resources.
• Following the transition, ANZ Share Invest clients will
benefit from lower brokerage charges across four major
international markets and the local Australian market and
will give CMC the opportunity to drive greater value from
its enlarged client base. The transaction further establishes
CMC as a financial technology leader in the Australian
market and removes the uncertainty around the finite term
of the existing ANZ white-label partnership.
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CMC Markets plc
Annual Report and Financial Statements 2022
Our focus
for 2023
The significant achievements
made with the initiatives during
2022 place us in an excellent
position to continue to deliver
throughout 2023, thereby
deriving future value for, and
accelerating the diversification
of,the Group.
For the year ahead, we are
reinvigorating the focus on
ourthree core initiatives of
established markets, client
journey optimisation and
institutional offering. 2023
bringswith it a new business
linefollowing the launch of our
UK non-leveraged platform.
Thiswill augment the sustained
delivery of expansion in our
established markets, aswell as
ultimately bring opportunities to
our institutional business and
further potential partnerships.
In addition, we will be launching
anew investment platform in
Singapore within a year, as
wellas considering two other
jurisdictions for launch as we
continue to diversify and expand
our geographic footprint through
technology, our leveraged
institutional offering, and our
non-leveraged platforms.
Our strategy
1
Established markets
Opportunity
The established markets of the UK, Australia and Germany generate a
significant part of the Group’s revenue and, given the size and development
ofthe markets, they also offer the greatest absolute growth opportunities.
Thismeans that we continue to focus on developing brand and product
awareness with the aim of becoming the choice provider to new clients
acrossour high growth markets. We also continue to invest to make sure
weoffer the premium proposition with the financial strength required to
attract clients from competitors.
Priorities for 2022/23
• UK: Growth in net trading revenue generated from active professional
clients and high value retail clients. Significant opportunities exist to improve
our product offering to attract profitable partnerships across our retail and
institutional client base.
• Australia: Deliver on the transition of ANZ’s Share Investing client base.
The transaction announced in September 2021 involves the transition of
approximately 500,000 ANZ Share Investing clients, with total assets in
excess of AUD$43 billion.
• Non-leveraged expansion: The Group is focused on the rollout of its non-
leveraged platform which will offer trading and investment products in the
UK with an ambition to rollout across other geographies. Significant additional
features are expected to be rolled out over the coming 12 months to attract
clients across the generational shift to self-managed investment platforms.
This diversification will reposition CMC’s focus over time to drive profitability
and accelerated growth.
Technological evolution in 2022/23
• Proprietary technology investment will meet clients’ new demands and
regulatory requirements. CMC’s differentiated focus on self-owned and
developed technology brings with it significant opportunities for future
expansion. Thiscontinues to define CMC’s unique growth strategies in both
our leveraged and non-leveraged businesses.
• Continue to develop new products in response to client demand across
leveraged, stockbroking and UK non-leveraged platforms. These include global
equities, funds, options, cryptocurrencies, foreign exchange and tax wrappers as
well as opportunities for our clients to invest in a responsible and sustainable way.
• High platform availability maintained and continual reductions to latency
implemented, improving our clients’ overall experience.
Progress against 2021/22 objectives
• Monthly client numbers in our leveraged business continue to remain close
to record highs and importantly are still up 33% versus pre-pandemic levels.
• Non-leveraged underlying active client numbers are up c 36% versus
pre-pandemic levels. Client non-leveraged AuA reached a new record
highat AUD$80.2 billion during the year, up 72% versus pre-pandemic levels.
• The Group continued to win numerous awards for client service and
products throughout the year.
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CMC Markets plc
Annual Report and Financial Statements 2022
2
3
Priorities for 2022/23
• Continue to invest in a responsive, insight-driven platform that is
optimised for incremental client learning and growth.
• Iterate delivery on new services that better support our clients to
manage their performance and harness market opportunities.
• Build out our product range across our platforms to better support
clients’ investment portfolio and grow share of customer wallet.
Priorities for 2022/23
• Deliver an infrastructure upgrade that will elevate CMC Connect
asatechnical innovator and institutional contender for price and
liquidity construction.
• Evolve the current product offering to operate with larger institutions
resulting in greater revenue returns.
• Enhance our ECN connectivity, providing access to a vast electronic
market to further cement ourselves in the B2B space as the go-to
non-bank liquidity provider.
• Develop a physical asset class solution allowing access to new products
and functionality, offering best-in-class technology to a marketlooking
for an increasing range of investment products.
• Expand the range of instruments on offer to meet all market liquidity
needs, including cash equities, ETFs and other financial instruments.
• Continue to elevate the CMC Connect brand throughout the financial
sector, utilising our award winning product suite to gain recognition as
the industry benchmark.
Technological evolution in 2022/23
• Building core multi asset capability that will enable us to deliver a
more diverse and peerless trading experience to our expanding target
market across leveraged and non-leveraged platforms, including B2B
capabilities across all platforms.
• Continue to invest in people and technology. Our main offices in
London and Australia focus on the development of all new platform
features orientated around the value proposition we offer across our
technology offering. This will soon be bolstered with the opening of
our Manchester office in the UK.
• Establishing new ways of working across both our traditional leveraged
and growing non-leveraged businesses to increase the velocity of
product delivery, organisational learning, and incremental value we
deliver to our clients.
Technological evolution in 2022/23
• Position CMC Connect as a full service fintech solution and non-bank
liquidity provider.
• New products; FX give ups and ECN connectivity (Electronic
Communication Network) enhancements.
• Drive brand and product awareness across all channels and
distributionchannels.
Progress against 2021/22 objectives
• Continued to deliver numerous user experience and technological
improvements to our customer onboarding processes across our global
retail, institutional and non-leveraged businesses.
• Developed new services and data capabilities that better support
ourclients to manage their performance.
Progress against 2021/22 objectives
• Exceeded revenue targets and expectations for 2022.
• Accelerated growth in the FX market with marketing strategy to build
client groups across increasing geographies.
• Successfully continued advancements as a non-bank liquidity provider
in the spot market.
Client journey optimisation
Opportunity
We continue to lead the way in providing a best-in-class client trading
experience and generating high levels of customer satisfaction with our
products and service. We believe there is a sizeable opportunity to build
on this strength and drive greater longevity and advocacy from our client
base. We are focused on solving our clients’ problems and supporting
them on their trading journey. This will enable the Group to further
improve its capability to attract, build and retain a high quality client base.
Institutional offering
Opportunity
CMC Connect, the institutional offering from CMC Markets, looks to
accelerate functionality over the next year following major technical
advances to its connectivity and current product offering. Steep growth
trajectory is predicted across trading volumes and the client base
resulting in major elevation of the CMC Connect brand.
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CMC Markets plc
Annual Report and Financial Statements 2022
Key performance indicators
Group KPIs
Tracking our progress
Our Group KPIs monitor the delivery of long-term value through a focus
on client quality and operating effectiveness.
In the 2021 report, the Group unveiled its plans to develop a non-leveraged platform in the UK. As a result, we have reviewed
the most appropriate metrics to illustrate the performance of the business and feel it is the right time to provide Group-level
metrics but also a split of performance of both the leveraged and non-leveraged businesses as a whole.
KPI definition
This is a statutory measure,
which represents total
revenue net of introducing
partner commissions and
spread betting levies.
Why we measure
Key operating metric.
Net operating income
£281.9m
£252.0m
21
20
£409.8m
22
£281.9m
Link to strategy
1 2 3
KPI definition
This is a statutory measure,
which comprises net
operating income less
operating expenses and
interest expense.
Why we measure
Key operating metric.
Statutory profit before tax
£92.1m
21
20
£224.0m
£98.7m
22
£92.1m
Link to strategy
1 2 3
Profit after tax
£72.0m
£178.1m
£86.9m
£72.0m
21
20
22
KPI definition
This is a statutory measure,
which comprises statutory
profit before tax less
taxexpense.
Why we measure
Largest driver of
shareholder equity and
Board-approved metric for
calculating dividend payable.
Link to strategy
1 2 3
KPI definition
This is a statutory measure,
which is calculated as
earnings attributed to
Ordinary Shareholders
divided by weighted average
number of shares.
Why we measure
Key shareholder
valuemetric.
Basic earnings per share
24.8p
30.1p
2.0
21
20
61.5p
2.0
22
24.8p
Link to strategy
1 2 3
KPI definition
Any dividend declared,
proposed or paid relating to
the financial year.
Why we measure
Key shareholder
valuemetric.
Ordinary dividend per share
relating to the financial year
12.38p
15.03p
2.0
21
20
30.63p
2.0
22
12.38p
Link to strategy
1 2 3
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CMC Markets plc
Annual Report and Financial Statements 2022
Leveraged KPIs
KPI definition
Spread, financing and
commission fees charged to
CFD and spread bet clients.
CFD net trading revenue is the
product of gross CFD client
income, multiplied by client
income retained.
A reconciliation of gross client
income to the Primary Statements
is provided on page 164.
Why we measure
Used to measure the total
income generated from CFD
client transaction charges.
Gross client income
£288.5m
21
£335.3m
£240.6m
20
22
£288.5m
Link to strategy
1 2 3
Strategy key
1
Established markets
2
Client journey optimisation
•
3
Institutional offering
KPI definition
Individual clients who have
traded or held CFD or spread
bet positions with CMC Markets
on at least one occasion during
the financial year.
Why we measure
Representative of the continuing
success of the business in
acquiring and retaining clients
which trade on a regular basis.
Link to strategy
1 2 3
Active clients
64,243
76,591
57,202
22
64,243
21
20
KPI definition
Percentage of gross CFD
clientincome retained after
rebates and gains and losses
from risk management.
Why we measure
Used to measure the success
ofthe risk management
strategyof converting client
spread, financing and
commissions charges to
CFDnet trading revenue.
Link to strategy
1 2 3
Client income retained
80%
104%
89%
22
80%
21
20
Revenue per active client
£3,575
£4,560
£3,750
22
£3,575
21
20
Link to strategy
1 2 3
KPI definition
Net trading revenue generated
from CFD and spread bet active
clients, divided by the number of
active clients during the year.
Why we measure
High value clients are central to
the Group’s strategy and the
growth in this figure is indicative
of the success in attracting and
retaining these clients.
Platform uptime
99.95%
99.95%
99.95%
22
99.95%
21
20
Link to strategy
1 2 3
KPI definition
The percentage of trading hours
that clients are able to trade on
the CFD platform.
Why we measure
The CFD platform is at the core
of our business – if clients are
unable to trade, the Group will
be unable to earn revenue.
Maintaining a very high uptime is
key to the continued success of
the Group.
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CMC Markets plc
Annual Report and Financial Statements 2022
Non-leveraged KPIs
KPI definition
Income received from brokerage
and FX spread on client trades,
less rebates.
Why we measure
Revenue diversification and high
value clients are central to the
Group’s strategy and the growth
in this figure is indicative of the
success in growing the
stockbroking business and
attracting and retaining high
value clients.
Link to strategy
1 2 3
Net trading revenue
£48.0m
£31.8m
£54.8m21
20
22
£48.0m
KPI definition
Individual clients who have
traded on the stockbroking
platform on at least one
occasion during the financial
year.
Why we measure
Representative of the continuing
success of the business in
acquiring and retaining clients
which trade on a regular basis.
Link to strategy
1 2 3
Active clients
246,120
20
181,630
21
232,053
22
246,120
KPI definition
The percentage of trading hours
that clients are able to trade on
the stockbroking platform.
Why we measure
The stockbroking platform is at
the core of our business – if
clients are unable to trade, the
Group will be unable to earn
revenue. Maintaining a very high
uptime is key to the continued
success of the Group.
Link to strategy
1 2 3
Platform uptime
99.91%
21
20
99.80%
99.95%
22
99.91%
Key performance indicators continued
Strategic report
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CMC Markets plc
Annual Report and Financial Statements 2022
New technologies and new ways of working
borne out of our digital transformation
programme have been the main contributing
factor in accelerating the delivery of our new
UK investment platform. The build is a highly
complex work programme requiring strong
collaboration across IT and every business unit,
meaning the programme impacts almost every
team in the UK in some way.
Technology and innovation
Digital transformation
accelerates building our new
UK investment platform
The delivery of the platform on time and on budget is particularly
pleasing given projects of this scale are notorious for overrunning
due to friction in the delivery process, delays caused by poor
decision making and disjointed technical design decisions. At the
heart of these issues is often the use of unsuitable and outdated
working practices. Our digital transformation programme has allowed
us to combine new skills and ways of working with new technology
capabilities to allow us to tackle a programme of this size and complexity
and execute at pace, delivering a great product outcome for our clients.
Cross-functional product-led teams
Strong collaboration alongside fluid and effective communication are
critical when building complex platforms at pace. Teams need a wide
range of skill-sets and a high level of autonomy, and our new “squad”
model has given us that. We have created our new UK investment
platform using cross-functional (multi-disciplined) teams, always
product led with a clear line of sight to our clients. We keep the
customer in mind throughout our build process, creating a rapid
feedback loop from customer research to the development team.
Cloud technology
Cloud technology, delivered through our strategic partner Amazon
Web Services (“AWS”), has provided the foundations for creating our
new investment platform. To leverage cloud technology effectively
weneeded an entirely new approach to architecture and design.
Thetransformation programme brought the required skills into the
organisation, as well as the foundations of our AWS technology
ecosystem, meaning we could hit the ground running. Cloud
technologies allow us to more rapidly build and deploy changes to our
system, using concepts such as infrastructure-as-code and serverless
architecture. We have been able to reduce dependencies on traditional
infrastructure support teams, reducing hand-offs in our development
processes, thereby accelerating ourdevelopment timelines.
You build it, you run it!
The implementation of cross-functional squads, coupled with the
adoption of cloud technology, has brought a whole new level of
empowerment to our delivery teams through what we refer to as
“build and run”. This is a powerful concept that demands a high level
of discipline and skill from all members of the team, but rewards them
with the highest level of autonomy. The teams building our new
investment product can rapidly implement change, taking feedback
from a customer and delivering the required change, with minimal
support required from outside the team. This has been embedded
inour teams from the inception of the project, and will allow us to
scale our teams and rapidly expand our product in line with
customerdemand.
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CMC Markets plc
Annual Report and Financial Statements 2022
Non-leveraged UK
CMC Invest development
We proudly launched our UK investment platform, CMC Invest, in
April 2022 on an invitation-only basis. Further enhancements and
features are scheduled in phased releases through the rest of the
year, with a wider market release on track for the second half of
the calendar year.
The prioritisation of our product roadmap is guided by one of our
core Company values – put our clients first. Throughout the launch
year and beyond, we will continue to proactively engage clients
and create a dialogue to better understand their investing habits,
to then bring forward an investing platform tailored to their needs.
The genesis of the product was borne out of client feedback and
market research that identified a gap in the UK investment market.
While there are many options for an investment platform, there is a
lack of a credible alternative that is fully aligned to clients’ needs
and financial goals.
This was the catalyst for our mandate: challenge the status quo
and create a transparent platform, business model and pricing
structure that better support clients’ self-directed investment
needs and their long-term success.
To scope the product we took a fundamental approach to
analysing the UK investment market and built up our understanding
of clients’ pain points and expectations, whilst leveraging CMC’s
expertise in technology and building investment platforms to hone
our product designs and solutions.
A significant part of our effort has been focusing on establishing
the platform to build and iterate successful feature sets. We have
mobilised several cross-functional squads that are dedicated to
building out the investment product with the singular goal of
creating the greatest value for our clients. The investment platform
is built using scalable cloud-based technology and processes that
enable us to release new features continuously in a secure and
highly automated manner. This means we can react quickly to
client feedback within hours rather than days or weeks. The teams
are accountable for outcomes (as opposed to output) focused on
areas such as client adoption, retention and advocacy. We are
committed to our mission of inspiring and guiding our clients to
realise their financial goals, which means we have made them an
intrinsic part of the product development process. To this end, we
have also been honing our product development practices to
expedite the gathering, organisation and utilisation of client feedback
and construct a framework where our clients become an extension
of our product team.
We are proud to have delivered the first iteration of the new
investment platform in under a year, demonstrating the immense
capability within CMC Markets and the strength of the team. The
first delivery of the platform includes core features, e.g. General
Investment Accounts (“GIAs”), UK and US share dealing, watchlists
and paperless forms, but, more importantly, we have also set up
the framework for rapid development and introduction of new
capabilities that will better support CMC’s clients to achieve their
investment goals.
Technology and innovation continued
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CMC Markets plc
Annual Report and Financial Statements 2022
Non-leveraged Australia
Client journey optimisation
The Australian non-leveraged business started its
transformation to an agile, cross-functional squad model
around 18 months ago, with the aim to align our product and
development teams with key areas across the client journey.
The Mobile squad started us off in 2021 and went on to
develop powerful new mobile and tablet apps for our iOS
and Android users. The success of these apps can be seen
in our app ratings which stand at or above 4.5/5 at the end
of March 2022.
We continued this transformation in 2021/22 with the
addition of a new Account Management squad whose initial
focus was on redesigning our application process for new
clients. This aligned to one of the Group’s key focus areas in
2022 of optimising the client journey and was designed to
simplify the user experience, automate manual processes
and speed up application and account creation times so
clients could start investing sooner.
The project started with a comprehensive research phase
looking at modern application designs and user flows,
reviewing our internal processes and speaking with key
stakeholders to gather requirements. Once the results were
collated and reviewed, the initial concept design was
developed and tested with our new CMC focus group.
Thefeedback from these sessions resulted in a number
ofchanges to optimise the user experience further before
being passed to the squad developers to commence
thebuild.
In addition to a new modern design, the development team
built the new application using scalable cloud-based
technology, allowing us to instantaneously scale our IT
infrastructure to serve more clients. We’re leveraging cloud
services to release new features continuously in a secure
and automated manner.
The new individual application went live at the end of calendar
year 2021 to a small percentage of new clients which enabled
us to test the end-to-end process, identify any issues and
iteratively update where necessary. The full rollout of the
application process is planned for early 2023, before
switching our focus to white-label variants, non-individual
accounts and some key account management enhancements.
Reduction in 99th percentile
execution time
Leveraged
69%
Non-leveraged
71%
Operational excellence supporting
leadingedgeinnovation
The Group’s infrastructure remained extremely resilient throughout
2022 with the leveraged and non-leveraged platforms again achieving
uptime of 99.95% and 99.91% respectively, throughout the year, despite
periods of elevated volatility driven by COVID-19 and geopolitical
events. Once again, our technology has been core to providing our
clients with uninterrupted access to the financial markets. We are
continuing to improve the consistency and speed of execution for all
clients with the 99th percentile execution time down approximately
70% compared to the same time last year for both leveraged and
non-leveraged businesses. We recognise that we need to be
constantly evolving and innovating to ensure we remain at the leading
edge of our industry and have continued to invest significantly
throughout the year to ensure this is the case.
Putting clients’ needs at the core of our strategy
Our product strategy is based on understanding and eliciting these
needs from our clients and delivering personalised experiences
supporting their key journeys with CMC. We believe that understanding
what our clients need and when they need it will underpin clients’
long-term relationships with us through enabling their long-term
success. This has been demonstrated through the constant client
engagement during the CMC Invest build, resulting in the Group
building a detailed understanding of their investing habits and
therefore building a platform tailored around their needs.
1 Leveraged percentage represents reduction in Q4 2022, following changes made during
thequarter.
Read more about our client journey
optimisation strategy on page 20
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CMC Markets plc
Annual Report and Financial Statements 2022
Introducing our new focus
on sustainability
Sustainability
At CMC Markets, we empower our people
and clients with the means to invest in a
positive tomorrow by providing responsible
and innovative technological solutions that
protect, educate and inspire our people and
clients to invest for the future. This ensures
that we are aligned with the global capital
markets shift towards asustainable future.
At a time when sustainability is leading the direction of the financial
markets, our mission is to empower our people and clients with the
knowledge to invest responsibly and with confidence. We are
cognisant and embracing of the mandate handed to the finance
industry to support the global sustainability agenda including the
critical fight against climate change. We also recognise that adopting
practices through a sustainability lens will have real business benefits
that support the longevity of the Group and aid in the delivery of our
purpose to provide our clients with a first-class technology-backed
investing experience with unrivalled access tocapital markets.
Over the last year we’ve taken decisive steps towards embedding a
greater focus on sustainability within our organisation. We welcomed
Kelly Perry as our new Group Head of Sustainability, a newly created
senior position that sits within our corporate team with Board exposure.
Kelly will play a vital role in advising our Board throughout our
sustainability journey, developing the overall strategy and ensuring
successful implementation into the overall operations of the Group.
Introducing our new strategy:
"Our Tomorrow: taking a positiveposition"
Over the past year, we have worked closely with a team of
sustainability consultants, Design Portfolio, to support a number
ofworkstreams, including preparation to meet the requirements
ofthe TCFD (read our disclosure on pages 40 to 43) and the
facilitation of ourfirst materiality assessment. Following the
prioritisation of the sustainability topics that matter most to our
business, we are proud to launch the new sustainability strategy that
will shape the next few years of activity for the Group: "Our Tomorrow:
taking a positive position".
This coming year we are committed to embedding the new strategy
across the business and, moving forward, our priority will be to
determine key performance indicators and targets to measure and
monitor our progress against "Our Tomorrow". We intend to report
frequently against the development of this strategy and our performance
and engage internal and external stakeholders to support our work in
this area.
"Our Tomorrow" describes how we seek to embed sustainability
across the business. We have identified five core strategic priorities
that are our areas of focus, which highlight how we protect, empower,
innovate and adapt to be a responsible business that is committed to
the needs of our people and our planet. How these five strategic
priorities interact is key to the success of the future of ourbusiness.
To deliver for our clients and for our people, we recognise two key
mechanisms: firstly, the role we have to play towards a sustainable
future including mitigating the consequences of climate change and
better understanding how we can contribute to a low carbon
future;and secondly, how having robust governance and leadership
underpins our approach to sustainability, and we are taking steps to
enhance our oversight and understanding of sustainability at the
highest levels.
Strategic report
28
CMC Markets plc
Annual Report and Financial Statements 2022
“ Upon joining CMC this year, I have been encouraged
to see the steps the Group has taken towards being a
sustainable business. I am delighted to launch CMC's
"Our Tomorrow" sustainability strategy, which
demonstrates our ambitions to embed sustainability
practices into the overall business and operations for
a more positive future. This is an exciting time for the
Group and we recognise that being a responsible
business is not the work of any one individual, but
that we all have an important role to play.”
Kelly Perry
Group Head
ofSustainability
Our entire ecosystem needs to come together to ensure the ongoing success of
"Our Tomorrow" and to really make an impact, as demonstrated below:
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Client
positive
protecting our
clients and instilling
confidence in
their investment
decisions.
Protecting with
purpose
Platform
positive
pioneering
innovative and
sustainable products
to solve our clients
current and future
needs with
platforms for
good
Strategic report
29
CMC Markets plc
Annual Report and Financial Statements 2022
Sustainability continued
Grounding our strategy
in materiality
A comprehensive materiality assessment has provided the building blocks to our strategic approach.
Through a multifaceted engagement programme with key internal and external stakeholders, industry
research and market analysis, we developed the materiality matrix shown below to visualise the topics that
matter most to the business.
Materiality matrix
The vertical axis represents the significance of the topics to our stakeholders, determined on the basis of
interviews and surveys conducted with a representative sample of our employees, clients, financiers, and
shareholders. To assign the impact score shown on the horizontal axis, we conducted a risk and opportunity
mapping exercise for each topic to understand our exposure to potential consequences or benefits.
We validated the findings from a prioritisation exercise in workshops consisting of members of our senior
leadership team. This matrix and the sustainability strategy we have developed will guide our focus for the
next few years and we will continue to track materiality.
CMC’s material issues:
1. Client care and protection
2. Leadership and
governance
3. Organisational culture
4. Incorporation of ESG
factors into platform
5. Diversity and inclusion
6. Talent development
7. Business ethics
8. Climate action
9. Professional integrity
10. Responsible marketing
11. Energy transition
12. Executive pay
13. Green finance
14. Carbon emissions
15. Financial capability and
inclusion
16. Employee wellbeing
17. Nature and biodiversity
18. Waste management
19. Labour practices and
human rights
20. Responsible procurement
Environment
Social
Governance
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18 19
20
Manage
CMC’s risk/opportunity exposure
Monitor
Maximise
Mitigate
Significance to stakeholders
Strategic report
30
CMC Markets plc
Annual Report and Financial Statements 2022
Reporting against
ourstrategy
Outlined below, we share our performance
against our new five pillar strategy over the past
year, and our plans for the future.
1 – Client positive
Driving our efforts to being a market leader by
protecting our clients and instilling confidence in
their investment decisions. Protecting with purpose.
There are many contributing factors that impact the behaviour of the
markets which inevitably means it is not upside all the time. The
Group recognises that risks and potential financial losses are inherent
to our products and how they can impact our clients. Beyond our
regulatory obligations, we are exploring a market leading approach to
client protection, optimising their experience while ensuring the
Group remains aligned with global regulatory bodies.
Supporting our clients through education
As we continue to develop and diversify our products, we recognise
that our retail client base is also evolving to reflect broader and more
diverse demographics. This presents exciting new opportunities for
the Group and the new wave of investors is fundamentally different
from our traditional investor; they are demonstrating less financial
literacy
1
and despite this they have an appetite to engage in our
sector. We are committed to examining how best to meet the needs
of the more diverse and less experienced investors and we
areputting education at the centre of our approach.
We have a freely available Learning Hub for all investors on our website
to help new clients navigate the difference between spreadbetting,
CFDs and FX trading including key thematic trends in the market.
Responsible marketing
The Marketing Communications Policy sets out the standards that
apply to the content used in client communications and financial
promotions, covering the nature of the content, prominence of
certain information, presentation of data and whether it is necessary
to add disclosures or risk warnings.
Read more about our commitment to client journey
optimisation on page 20
2 – Platform positive
Pioneering innovative and sustainable products
tosolve our clients’ current and future needs
withplatforms for good.
Investment products are evolving all the time, and we continue to tap
into this changing landscape. We have recently expanded our UK
investment product suite into a non-leveraged investment platform
and we are exploring sustainable product opportunities, in the spirit
of the EU’s Sustainable Finance Disclosure Regulation (“SFDR”) and
the UK’s forthcoming Sustainability Disclosure Requirements (“SDR”)
regimes. Our priority as we review these opportunities is to ensure
that these assertions are authentic. We will strive to offer our clients a
product suite that allows clients toinvest responsibly and understand
the trends towards sustainable investments.
Read more about our investments in technology and innovation
to support better client experiences on page 25
Sustainability highlights
A summary of achievements that have been critical for
improving our approach to sustainability:
• Completed our first ever materiality assessment, which
supported the development of our brand-new sustainability
strategy, "Our Tomorrow: taking a positive position".
• Welcomed our new Group Head of Sustainability, Kelly Perry,
who will oversee the development and implementation of
"Our Tomorrow".
• Convened the Sustainability Committee, a group of senior
leaders that will help to drive the adoption of "Our Tomorrow"
across the business.
• Conducted a survey of our employees to gain their views
and feedback on the key sustainability topics that matter
most to them.
• Commissioned a review of diversity and inclusion within the
business to inform our understanding of our employee
community and develop a roadmap for growth.
• Undertook a deeper analysis of our climate-related risks and
impacts as part of a workstream to produce our first
disclosure in line with the recommendations of the TCFD.
1 https://www.fca.org.uk/publication/research/understanding-self-directed-investors.pdf
Strategic report
31
CMC Markets plc
Annual Report and Financial Statements 2022
Sustainability continued
3 – People positive
Cultivating culture and fostering an inclusive and
innovative workplace where everyone thrives.
Our people have always been core to the success of CMC Markets,
and this year we could not be prouder as our teams, in all locations,
rose to the challenges that were presented to them. Our future
success depends on nurturing and enhancing an environment where
our employees can reach their potential, championing talent
development, promoting our employees’ mental health and wellness,
and taking clear action to make CMC Markets a place where
everyone thrives, regardless of beliefs and identities.
Diversity and inclusion
Having an environment where all employees feel included and valued
is important to us and as our business grows we acknowledge that
there is more we can do to ensure thiscontinues to be fully
embedded in the culture of the organisation. This year the Group has
built on the relationships with organisations such as Inclusive
Employer and EveryWoman.
Inclusive Employer has delivered six virtual workshops with an
average of 220 attendees at each live session. The workshops have
covered topics from introductory overviews to introducing allyship,
alongside more in-depth topics such as an introduction to neurodiversity
inclusion. These workshops have provided learning opportunities,
encouraged and supported colleagues to connect and open
dialogues on inclusion topics.
Following the growth and success of our Women@CMC programme
in the APACregion, the programme was rolled out in the UK and
Europe in January 2022. This has helped to connect women across
five different geographies through topic-based development
workshops and networking, supported by the Group’s relationship
with EveryWoman.
The Group’s focus on gender balance, supported by Board andsenior
management, has led to reviews of processesand policies across the
business to ensure they are suitably diverse and inclusive. This has
led to the following changes in the year:
• parental leave policies were reviewed and enhanced to further
support working parents across the Group. Changes to our
maternity pay provision mean we are now in the upper quartile
formaternity pay in the UK; and
• creation of an internal Talent Acquisition team has allowed the
Group to shape recruitment processes to support a more diverse
pool of applicants to ensure:
• job descriptions are diverse and inclusive;
• working patterns and hybrid working are more accessible; and
• line managers are supported through recruitment activities.
The things we live by
Throughout 2022 employee engagement surveys helped
us capture what it means to work at CMC and understand
how employees feel whilst at work. We have used these
learnings to underpin recruitment practices, and provide
quality content on our website and social media pages to
helps us recruit employees aligned to our ways of working
and give a framework for personal development discussions.
We stand with our clients
We are as passionate about trading as our
clients, and we’re here to help them make the
most of every opportunity. Weput our
clients at the centre of everything we do.
We are human
We’re personable and approachable. We
know thevalue of direct interaction and
make ourselves available to talkinperson.
We take ownership
We make decisions as accountable
individuals, not ascommittees. We do
ourresearch and listen with intent to
driveimprovements.
We are bold
We’re not afraid to challenge ourselves or the
status quo and we’re always looking for ways
toimprove. If things don’t work, we learn,
iterate and succeed.
We work as a team
We’re inclusive, welcoming andencourage
collaboration. We work together across
boundaries and don’t have time for egos.
We keep it simple
In a complex industry, wealways strive
tokeep things assimple as possible.
We’rehonest, reliable and straight talking.
We focus on impact
We focus on solving the most important
problems that will deliver the biggest impact.
Weuse our time and money wisely and stay
focused on the end goal.
Strategic report
32
CMC Markets plc
Annual Report and Financial Statements 2022
This year the Group engaged a diversity and inclusion consultant to
provide an external view and to help develop the Group’s diversity
and inclusion strategy going forward. As a Group we want to build on
the foundations of everyday diversity and inclusion practices through
training, development of policies and practices and embedding a diverse
and inclusive culture where employees have the tools to thrive. The
strategy will include metric-driven objectives for all senior managers
to encourage more inclusive practices, particularly in the areas of
(butnot limited to) gender, BAME, disability and socio-economic.
Gender pay remains important to the Group and, whilst our published
gender pay gap in the UK is 24% as of 5 April 2021, our ongoing
monitoring shows that as of March 2022 we have improved to 14%.
We continue to drive improvement in this area and measure our
progress with real-time metrics and a more robust grading structure
to ensure the headline metrics are underpinned by local practice.
Learning and development
Employee development has continued to be a focus over the lastyear
as we launched a global learning management system. This tool aims
to become a centralised hub for learning and development. Along
with CMC mandatory training, this hub provides learning access to a
number of partnered resources such as Intuition, LinkedIn Learning,
Pluralsight and MBL, whose remote learning solutions have been
invaluable during the pandemic. We have reintroduced some
face-to-face learning with the delivery of Management Essentials
training to the majority of our line managers in the UK and Europe.
The Group recognises the value in developing and supporting growth
in its employees with tools in place to; support employees, analyse
the needs within the business, and having a comprehensive and
structured approach to learning strategies. We aim to continue
building on the learning and development culture and embed the
value of this within teams as well as at individual level.
Senior Managers and Certification Regime
The Group continues to be fully aligned with the FCA’s Senior Managers
and Certification Regime, and other similar regulations globally. As a
result of theunderlying philosophy to work closely with all regulators
and adopting the highest standards globally, the business adopted
Group conduct requirements across all our offices. A Conduct, Fitness
and Propriety Panel (“CFPP”) has been formed to bring together key
stakeholders globally to discuss matters and ensure consistency,
reporting and policy applications across the Group. The Group has
continued to ensure appropriate training is provided, both internally
and via external providers, on the conduct rules and other regulatory
matters and best practice guidance.
1 Employees of the Group
excluding contractors as at
31March 2022.
2 Direct reports of Executive Directors
in non administrative roles.
All employees

Male 658
Female 265
Board of Directors

Male 6
Female 2
Senior management

Male 31
Female 3
Strategic report
33
CMC Markets plc
Annual Report and Financial Statements 2022
3 – People positive continued
Employee engagement
We recognise that engaged employees make better decisions for our
business and customers because; they understand more, are more
productive because they like what they do, and innovate more
because they want the business to succeed. As we navigate a new
landscape of how people communicate, adapting is essential, and we
have focused on ensuring we can provide engaging and informative
tools that are effective and provide transparency.
We continue to enhance our communications with employees and
understand the need to modernise and adopt best practices to be
more relevant, timely and engaging for our workforce. Having the right
culture, policies and practices in place is key to ensuring employees
have the tools and optimal processes to maximise their contribution.
We offer an employee experience platform which captures survey
results in real time along with the Group’s response to feedback
received. The tool creates an open feedback channel for employees
to communicate with the Executive Leadership team, helping us
understand our employees better and turn feedback into positive,
sustainable change that boosts performance levels.
We regularly communicate with employees at all levels through
multiple channels and with the support of our Non-Executive Directors,
who have responsibility to oversee engagement with employees. We
aim to ensure employees understand any challenges, opportunities,
and risks presented to the business through regular town halls.
Our new employee experience platform, Culture Amp, was launched
in 2021. The current year survey results identified a number of
opportunities for development and, in response, the business has
implemented the following global communication, social and
engagement initiatives:
• monthly business and strategy updates delivered by
ExecutiveDirectors;
• reinstatement of quarterly "meet the Directors" forum for new
joiners, temporarily suspending during COVID-19;
• engagement with our Non-Executive Directors to provide feedback
and hear insights;
• launch of Women@CMC programme;
• revisions to our work from home approach; and
• implementation of an anonymous feedback tool that is forwarded
directly to Executive Directors.
Overall full engagement was recorded at 66% during our global pulse
survey for 2022 (conducted in January 2022), increasing from the
61%recorded during our 2021 global annual survey (conducted in
July2021), and 59% during our 2021 global pulse survey (conducted
inJanuary 2021). In previous years we have highlighted Average
Engagement but can no longer report that metric. Full Engagement
isbased on the number of employees who agree or strongly agree
with all five core engagement measures.
Engagement data
Our engagement score
Current
66%
2022 global pulse
engagement survey
How we compared based on:
Previous
+5%
2021 global
engagement survey
Score: 61%
Benchmark
-6%
Fintech 2021
Score: 72%
Sustainability continued
Strategic report
34
CMC Markets plc
Annual Report and Financial Statements 2022