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CMC Markets plc Annual Report and Financial Statements 2024
Annual Report and
Financial Statements
2024
CMC Markets plc
Strategic report
1 Our strategic roadmap
2 At a glance
3 Our business
4 Our product oering
6 Operational and financial highlights
7 Investment case
8 Chairman’s statement
10 Market overview
12 Business model
14 Chief Executive Ocer’s statement
18 Our strategy
20 Key performance indicators
23 Section 172 statement
25 Stakeholder engagement
28 Technology and innovation
32 Sustainability
42 TCFD
52 Financial review
59 Risk management
61 Principal risks
CMC is a leading global provider of
online trading and investing, with a
comprehensive retail, B2B
andinstitutional oering.
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.
See more at www.cmcmarkets.com
Governance
70 Chairman’s governance overview
72 Board of Directors
75 Corporate governance
83 Group Audit Committee report
87 Group Risk Committee report
90 Nomination Committee report
94 Remuneration Committee report
115 Directors’ report
Financial statements
120 Independent auditor’s report
129 Consolidated income statement
130 Consolidated statement of
comprehensive income
131 Consolidated statement of
financialposition
132 Parent company statement of
financialposition
133 Consolidated statement of
changesinequity
134 Parent company statement of
changesinequity
135 Consolidated and parent company
statements of cashflows
136 Notes to the consolidated and parent
company financial statements
Shareholder information
174 Shareholder information
180 Appendices
Our vision
To create an environment
foryour financial needs
Our purpose
To constantly maintain
asuperior and unrivalled
technology experience
forourclients
Our strategic pillars
01
Trading platform
productdiversification
02
Investment in business-to-business
(“B2B”) technologycapability
03
Expansion of Invest platforms
and institutional oering
Our sustainability pillars
01
ClientPositive
02
Change Positive
03
Platform Positive
04
People Positive
05
Planet Positive
The things we live by
– We stand with our clients
– We are human
– We take ownership
– We are bold
– We work as a team
– We keep it simple
– We focus on impact
See more on page 18
Our strategic roadmap
See more on page 19 See more on page 19
See more on page 33 See more on page 34 See more on page 35 See more on page 38See more on page 33
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 1
Annual Report and Financial Statements 2024
sss czz
At a glance
1 Active clients represent those individual clients which have traded with or held CFD or spread bet positions or which traded on the Invest platform on at least one occasion during the financial year.
With a presence in 14 oces located
inmajor financial centres around the
world, CMC Markets operates on a
hub-and-spoke model.
The Company’s headquarters are
based in London, while Germany
serves as the hub for our European
operations, and Sydney acts as the
hub to support the Asia Pacific &
Canada (“APAC & Canada”) region.
Continents
4
Countries
12
Oces
14
Our client base
Total active clients
1
266,870
CMC attracts a diverse range of
institutional and retail clients across
both our trading and investing
platforms. Regardless of client type,
we uphold our high standards of
protection and suitability, to ensure
every client receives the same level
ofservice excellence.
Our new investing platforms provide
the Group with access to a cohort
ofclients in new geographies, with
theaim of providing clients with
opportunities for long-term investment
as another avenue to building
financialsecurity.
Our geographical reach
B2B/B2C split of active clientsBreakdown of NOI
A Trading – 51,250
B Investing – 168,760
A Trading – 4,044
B Investing – 42,816
A Trading – 55,294
B Investing – 211,576
Refer to net revenue on Page 53
A Trading net revenue – £259.1m
B Investing net revenue – £34.0m
C Interest income – £35.0m
D Other income – £4.7m
B2C
A
B
B2B
A
B
Totals
A
B
A
B
C
D
2 – CMC Markets plc
Annual Report and Financial Statements 2024
sss czz
Products
Contracts for dierence (“CFDs”) Spread betting Technology-driven liquidity solution
Outsourced trading platform technology Stockbroking Options
Trading
We are committed to expanding our product
range in order to improve functionality for our
clients. With over 10,000 products currently
available through our trading platforms,
we aim to provide the most ecient pricing
structure possible. Our pricing system
undergoes continuous evolution to ensure
sophistication and minimise latency. We
use high precision clock time-stamping
at multiple points throughout the system
to measure latency in microseconds and
monitor itin real time. Our focus on best
execution enables us to set high standards
for execution quality.
We prioritise internal risk management by
storing trade and risk data in a high frequency
tick database. This enables us to record all stages
of the risk management system, ensuring that
client order flow is managed eciently.
To achieve this, we have large quantitative
analytics and data science teams that develop
the hardware and software components
of our analytics environment. Data science
and machine learning models also play
a crucial role in our real-time and oine
decision-making processes.
Our ultimate goal is to oer our clients
market-leading access to liquidity, alongside
a best-in-class and resilient platform across
all aspects of our oering.
See more on page 12
Investing
We see significant growth potential across
global investment platforms due to secular
shifts in investment trends, and we are
expanding our investing businesses to
capitalise on these opportunities.
See more on page 12
Institutional/B2B
Our institutional clients are served by both
the trading and investing businesses.
Through our CMC Connect brand we oer
technology-powered solutions to mid-sized
and large financial institutions. CMC is already
a trusted service provider for execution,
clearing, and settlement services to several
major Australian financial service businesses.
Our B2B partnerships are at the core of
our growth strategy and our oering to this
important segment will be bolstered by our
product diversification which will expand to
all our existing and new geographies over
the next 24 months. With growth from our
investing operations, we are strategically
positioning our business to leverage some
of the fastest growing trends in trading
andinvesting.
Our continued development work to
connect to multiple Electronic Crossing
Networks (“ECNs”) and the deployment of a
competitive FX Spot product now allow for
significant growth in this asset class.
See more on page 12
A B C D F
Products utilised
C
Products utilised
E F A B C D E F
Products utilised
Sustainability
Our Tomorrow: taking apositiveposition
Our goal at CMC Markets is to align with the global capital markets’ movement towards a sustainable future. We aim to achieve this by oering
responsible and innovative technological solutions that prioritise the protection, education, and inspiration of both our people and clients to invest
for the future.
See more on page 32
See page 4
A B C
D E F
Our business
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 3
Annual Report and Financial Statements 2024
Our product oering
A
Contracts for
dierence (“CFDs”)
A derivative product which allows clients to trade
using leverage in an underlying financial asset,
without certain costs and limitations associated
with ownership of the underlying asset.
B
Spread betting
A product available exclusively to residents
in the UK and Ireland enabling clients
to speculate on price movements in an
underlying financial asset.
C
Technology-driven
liquidity solution
Our institutional arm, CMC Connect acts as a
non-bank liquidity provider oering access to a
wide range of asset classes including Spot FX,
Indices, Commodities and cash equities. For
larger institutions, we are able to oer bespoke
solutions to help facilitate access across multiple
asset classes.
4 – CMC Markets plc
Annual Report and Financial Statements 2024
D
Trading platform
technology solution
We oer outsourced platform technology to
clients also under the CMC Connect brand, where
our award-winning CMC trading platform can be
fully customised under a white label partnership or
branded platform for regulated entities looking to
oer our products to their clients.
E
Stockbroking
Our Australian stockbroking business oers
our clients the ability to trade Australian shares
and international shares from over 35 stock
exchanges in over 16 countries. This has been
supported through the launch of a fully native
mobile application oering a variety of instruments
including shares, options, managed funds,
warrants and ETFs.
Our UK business currently oers General
Investment Accounts (“GIAs”) and Stocks and
Shares ISAs with access to a range of US and UK
stocks. SIPPs and mutual funds went live in April
2024. The Group has also launched CMC Invest
in Singapore.
F
Options
The addition of options on CMC’s trading platforms
will bring added benefits to our clients. New derivative
products will provide more flexibility to manage
risks and volatility compared to traditional CFD
and stock trading. Options have the ability to
enhance portfolio diversification and manage risk.
Options are a universally popular product andtheir
addition has the potential to be a significant
revenue generator forCMC in years to come.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 5
Annual Report and Financial Statements 2024
Operational and financial highlights
– Trading revenue per active
client up £717 (18%) to £4,685.
– B2B represents 33% of Group
turnover¹ (2023: 30%).
– Continued investment in our
‘Invest’ branded stockbroking
propositions through
enhancements to the CMC
Invest Australia platform
including the release of crypto
trading, development of the
CMC Invest UK platform and the
release of CMC InvestSingapore.
– The institutional oering
continues to grow with the
release of cash equities trading,
with further product releases
planned in 2024.
– Ongoing operational resilience
demonstrated by theGroup-
wide platform uptime of 99.95%.
Read more about net revenue and our financial measures on page 53
1 Turnover reflects the notional value of client trades
2 Net operating income represents total revenue net of introducing partner commissions and spread betting levies.
3 Ordinary dividends paid/proposed relating to the financial year.
Net operating income
²
£332.8m
23
£288.4m
£281.9m
22
24 £332.8m
Statutory profit before tax
£63.3m
23
£52.2m
£91.5m
22
24 £63.3m
Group-wide platform uptime
99.95%
23
99.97%
99.95%
22
24 99.95%
Basic earnings per share
16.7p
23
14.7p
24.6p
22
24 16.7p
Ordinary dividend per share
3
8.30p
23
7.40p
12.38p
22
24 8.30p
6 – CMC Markets plc
Annual Report and Financial Statements 2024
Investment case
Award-winning
platforms
See more on pages 28 to 31
The demands of our clients continue to evolve. Ourgoal
is to constantly maintain a superior and unrivalled
trading experience for our clients. Continuous
investment in our proprietary technology across both
our trading and investing platforms allows us to oer
a wide suite of products. Our web-based and mobile
applications are continuously ranked amongst the best
in class by our clients.
Our diverse
product oering
See more on pages 4 and 5
We are investing to diversify our new products and
functionality across both our trading and investing
platforms. CFD trading remains at the core of what
we do. This is balanced with a world-class investing
business in Australia. Similarly, the launch of CMC Invest
Singapore, along with the release of CMC Invest UK
in FY23, underpins our expansion into the high growth
opportunities.
Our
geographical
reach
See more on page 2
Our global technology platforms allow access for retail,
professional and institutional clients through regulated
oces and branches in 12 countries, with a significant
presence in the UK, Australia, Germany and Singapore.
Our client
focus
See more on page 25
Our clients are at the heart of what we do, and their input
drives us to improve our business processes across
product development, marketing and client services as
we tailor new developments and target improvements.
We employ and develop high quality client services
sta to ensure best-in-class client service. Platform
resilience and user experience are at the core of all
developments and upgrades we deploy.
Our Tomorrow
See more on pages 32 to 41
Last year we introduced the Group’s Our Tomorrow
sustainability strategy and its five core pillars structured
to focus delivery on our material environmental, social
and governance (“ESG”) risks. Through this year we
have continued to follow the five sustainability pillar
approach, further details of which can be found in our
‘Sustainability’ section.
1 ASX and Chi-X combined trading statistics – IRESS.
12,000+
financial instruments traded across the
Next Generation platform and over 40,000
instruments within Invest Australia
16%
share of Australian stockbroking market
1
Launch of the Invest Singapore business,
providing clients access to 15 markets and
over 40,000 listed securities
56%
of net revenue generated outside the UK
and Europe regions
266,870
active clients across our trading and
investing businesses
5
core sustainability pillars
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 7
Annual Report and Financial Statements 2024
Our focus on diversification and enhancing
our B2B oering continues to build momentum
with clients and positions us to deliver on our
strategic vision.
The Board’s strategy of diversification and placing a greater focus on
institutional clients and the B2B sector continues to build momentum. The
long-term investments we have made in our technology and our people will
continue to enhance our business performance and benefit our clients and
other stakeholders.
While we have given a greater focus to our institutional business, we of
course maintained investment in our retail business, launching our Invest
product in Singapore and continuing to enhance our Invest business in the
UK. We launched mutual funds on Invest UK as well as our SIPP product
post year-end, broadening the range of high-quality long-term investment
products for our UK retail customers. In addition to our product diversification,
we continue to pursue targeted geographical diversification, building on our
existing presence in Dubai and placing a renewed focus on governance and
capabilities in Europe to ensure a solid foundation for what is an attractive
growth region. Our sta continue to be instrumental to our growth and
diversification. As we announced earlier in the year, the Group has reached
the peak of its investment cycle and the Board and senior management
conducted two restructuring reviews, leading to the loss of around 15% of roles
across the Group. While it is always a matter of great regret when colleagues
leave the business, we are now better placed to deliver on our growth
opportunities and leverage our scale to grow profit margins, whilst continuing
to invest in our products and technology.
Our long-term investments and
focus on institutional clients
andthe business-to-business
market segment are beginning
to deliver for the Group
The long-term investments we
have made in our technology
andour people will continue to
enhance our business
performance and benefit our
clients and other stakeholders.”
James Richards
Chairman
Chairman’s statement
8 – CMC Markets plc
Annual Report and Financial Statements 2024
Results and dividend
Net operating income rose 15% to £332.8 million in the year, following
improved trading conditions in the second half of 2024, with increased client
trading activity and further momentum in our B2B businesses. Profit after tax
for the year was £46.9 million. The Board recommends a final dividend of 7.3
pence per share which results in a total dividend payment of 8.3 pence for the
year, in line with our dividend policy of 50% of profit after tax.
Board
The Board was delighted to approve the appointment of Albert Soleiman as
CFO in September 2023 following the resignation of Euan Marshall. Prior to
his appointment as CFO, Albert led the launch of our CMC Invest business in
the UK which is a key part of our diversification strategy and enables clients to
generate long-term wealth through our investing platforms. Albert’s extensive
knowledge of the business made him the ideal choice as CFO.
Susanne Chishti has advised that she is not putting herself up for re-election
at the 2024 AGM. I would like to thank Susanne for her hard work and the
insight she has provided to the Board, particularly in relation to workforce
engagement matters, during her time as a Non-Executive Director. We wish
her well in her future endeavours.
People and stakeholders
Our workforce remains the bedrock for our business and the eorts of our
people enable us to deliver on our strategic goals and provide outstanding
service for our clients. The Board also considers our wider stakeholders
and the communities in which we operate, and during the year approved our
Community Impact 121 strategy, committing to making donations to charitable
causes and enabling sta volunteering.
We recognise, with the restructuring reviews and the resulting reduction in
roles, that this was a more dicult period for our people, and this is discussed
further in the Our Tomorrow section of the 2024 Annual Report and Financial
Statements.
The Board continues to place priority on developing and investing in our
people with Susanne Chishti having acted as our designated Non-Executive
Director responsible for workforce engagement. The scope of the work
undertaken by Susanne in this role is set out in the 2024 Annual Report and
Financial Statements.
The Board would like to express its gratitude to all CMC’s employees for
their significant contributions throughout the year and particularly during the
period of heightened change.
Sustainable-based growth
The Board is committed to putting in place the tools and capabilities for our
customers and employees to invest for a better future. Further information is
set out in the Our Tomorrow section of the 2024 Annual Report and Financial
Statements.
Outlook
The outlook for the Group remains positive as we continue to invest in the
business, develop the platforms and technologies that our clients want and
further improve our operational eciency. We will continue to build on the
work undertaken to date to diversify the business to position it for future
opportunities and challenges. While there will continue to be potential for
uncertainty in the financial markets due to ongoing geopolitical events, the
Board will maintain its focus on positioning the business to navigate through
this period of volatility to the benefit of all our stakeholders.
James Richards
Chairman
20 June 2024
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 9
Annual Report and Financial Statements 2024
Market overview
Whilst the Group currently generates the majority
of its revenue from retail trading products, our
strategy to diversify has accelerated during the
year with a range of new product oerings within
both our investing and trading businesses. Group
revenues are split between our three regions, the
UK, Europe and APAC & Canada.
Leading the
marketthrough
technology and
diversification
Group
Key market driver
Global interest rate
environment
Interest rates have remained high across the Group’s primary
markets after the aggressive hikes seen in the previous
financial year.
Our response
Despite higher rates, revenue from our core business has
remained strong, coupled with a significant increase in interest
income as the Group continues to benefit from a robust cash
position that is actively optimised to enhance returns.
The Group pays interest to clients on cash balances held in
GIAs and ISAs and continues to invest in its oerings to help
clients navigate the markets in all environments.
Key market driver
Inflation
The period saw a reduction in inflation to the lowest levels since
February 2022; however, prices for our inputs remain elevated.
Our response
As outlined previously, the firm has implemented a company
wide cost review programme. As part of this program we are
reviewing all supplier relationships and purchasing practices to
find eciencies and deliver sustainable costs savings.
Suppliers are also passing on inflationary costs but we remain
diligent in challenging and driving eciencies within the Group.
Key market driver
Scale
Operating at scale has significant benefits to the Group,
providing further opportunities for risk management
enhancements in the trading business and improved
operational leverage across our business.
Our response
Along with continued investment in our core infrastructure, the
diversification strategy ensures the group can obtain greater
share of wallet, by broadening the product range oered to our
clients. Our ability to leverage our existing technology platforms
and operational strength allows us to introduce new products
and services to our client base eciently thereby enhancing our
return on investments made.
10 – CMC Markets plc
Annual Report and Financial Statements 2024
Investing
Key market driver
Volatility
Unfavourable equity markets and the high cost of living
dampened demand for our Invest business in the first half of the
the year, however the turnaround in equity markets in H2 saw a
corresponding pick up in our Invest business.
Our response
Thematic investing continues to be a key interest for our clients
and with the growth in AI stocks and strong gains seen in the US
markets, clients were able to utilise our platform, products and
features to manage their portfolio. We continue to enrich the
tools and contents within our Invest oering to empower clients
to build wealth through all types of markets.
Key market driver
Market size and share
An independent report in Australia showed 1.2 million individuals
placed a trade online in the 12 months to November 2023
(previously 1.5 million). Singapore had 264,000 active online
investors in the 12 months to September 2023 and the
addressable market within the UK is attractive with 3.9 million
Stocks and Shares ISA holders.
Our response
During the year, we enabled cash crypto trading for
our customers in Australia, coinciding with the wider
investingcommunity’s growing interest in this asset class. This
enhancement within both our platform and award-winning
mobile app has further elevated our product oering and dierentiated
us from our peers. Additionally, by deploying strategies to boost brand
awareness, we have consolidated our position as Australia’s
second-largest retail broker, holding 16% market share.
We launched our Invest oering in Singapore earlier this year,
a gateway into the Southeast Asia markets where we aim to
replicate our Australian success in the retail and white label
space. In the UK Invest business, we continued to add new
assets to the platform, which included mutual funds and SIPPs.
Trading
Key market driver
Regulatory environment
In 2024 we have seen restrictions on the marketing of CFDs
inSpain and the first year of consumer duty in the UK.
Our response
The group maintains an open and transparent dialogue with
regulators to meet their expectations and that issues arising
are dealt with promptly. We consistently strive to ensure our
approach meets those regulatory expectations, whilst also
allowing the Group to be involved in shaping future regulations
within the sector.
The Group continues to be supportive of regulatory change
that strengthens a globally consistent regulatory environment.
Key market driver
Volatility
The year saw volatility continue to decline, reaching the lowest
level since 2019. However, the directional bias in the equities
market, bullion and commodity markets attracted interest
from clients.
Our response
Higher volatility results in increased trading activity from both
existing clients trading more frequently and new or previously
inactive clients starting to trade. The inverse is true in periods
of lower volatility, which can lead to a reduction in client trading
activity. However, short bursts of market activity which result in
high velocity movements in the products that we oer 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.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 11
Annual Report and Financial Statements 2024
Business model
Our client oering
Our clients are at the heart of
everything that we do.
Our business enablers
Technology and product
Technology and product have always been
key to the success of CMC Markets and this
has won the business recognition as a 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 oerings to
our clients.
See more on pages 28 to 31
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 sucient levels of capital to
withstand fluctuations in the financial markets
and access to a healthy level of surplus
liquid resources to capitalise on the growth
opportunities.
See more on pages 52 to 58
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 it is exposed. However, eective
risk management ensures that risks are
mitigated to an acceptable level.
See more on pages 59 to 68
Our technology platforms
Our superior platforms and technology, combined with our risk management, deliver a best-in-class
experience for our clients and partners.
Trading
Contracts for
dierence
Spread betting
White label solutions
Options
Cash equities
FX spot and give-ups
Investing
Invest platforms
(Australia, UK and Singapore)
White label solutions
Institutional
+
Retail
Institutional (business to business)
CMC Connect acts as a non-bank liquidity provider oering access to
a wide range of asset classes.
Retail (business to consumer)
CMC Markets provides clients access to a wide range of products
across both trading and investing platforms
The best trading and investing experience
12 – CMC Markets plc
Annual Report and Financial Statements 2024
Our client oering
Our clients are at the heart of
everything that we do.
How we make money
Trading net revenue
£259.1m
Spreads
Revenue earned through maintaining a
transactional spread (the dierence 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
Volume-based rebates paid to professional,
high value retail and institutional clients and
introducing brokers on selected asset classes.
Risk management gains/(losses)
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.
How we add value
Shareholders
Dividend per share
8.30 pence
up 0.90 pence from 2023
Earnings per share
16.7 pence
up 2 pence from 2023
People
24%
permanent employees with us
foroverfive years
Clients
61%
turnover¹ generated from trading clients
oftenure greater than two years
18
awards for service
platform and technology in 2023²
Interest income
£35.0m
Interest income from the Group’s own funds and
income on client funds.
1 Turnover reflects the notional value of client trades.
2 https://www.cmcmarkets.com/group/about-us
Investing
£34.0m
Net revenue in Australia 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
and equity capital markets (“ECM”) income.
Who our clients are:
– Sophisticated
– High value
– Experienced
What we oer them:
– Cutting-edge technology
– Competitive pricing
– Excellent client services
– Diverse product suite
Other income
£4.7m
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 13
Annual Report and Financial Statements 2024
Chief Executive Ocer’s
statement
Over the past year, CMC Markets has experienced exceptional growth,
marked by a strong financial performance, and continued technology
advancements. Our financial results, in particular our net operating income
of £332.8 million represents a record for the Group when excluding the
COVID-19 impacted 2021. Our profit before tax of £63.3 million was up
21%, reflecting the success of our institutional first approach by leveraging
our technology to partner with major financial institutions. The recent
announcement of our partnership with Revolut, where our best-in-class
technology will support their rapidly expanding customers’ investing needs, is
not only a testament to the success of this strategy but also opens significant
opportunities for further collaboration on a global scale.
This strategy has transformed and diversified the business into a provider
of financial technology solutions, facilitating platforms, multiple connectivity,
liquidity, trade execution and clearing across multiple venues as we partner
with major financial institutions. We have very little competition in this
institutional space. We are certainly not in competition with peers from the
retail CFD sector, and, because of our technology and oering, we have a
clear and long-standing competitive advantage that separates us from our
traditional peers in the retail market.
This is not something that has happened by accident, it has been part of
our business for over twenty years, but it is only recently that investors and
analysts have started to understand the diversity of our business model and
the scale it brings. As we gravitate further towards the fintech sector, this is
driving CMC towards a higher valuation multiple as we are increasingly moving
away from valuations associated with the retail CFD sector. A retail CFD only
platform is where CMC started, but that is not where we are today, and it is
not our future, and public markets are gradually beginning to reflect this in our
higher valuation.
Witnessing our
long-term
investments
come to fruitition
A central focus for the
management team and me
over2024 has been cost
management as we look
tobetter optimise our
performance and grow
profit margins.”
Lord Cruddas
Chief Executive Ocer
14 – CMC Markets plc
Annual Report and Financial Statements 2024
We are already the second largest on-exchange stockbroker in Australia with
over $70 billion in AUA and over one million customer accounts and we are
regularly the number one options clearer on the Australian exchange. CMC
Group currently serves more than 400 institutions with marquee partnerships
in all our major geographies and a strong pipeline in our target countries. Our
focus is not only to seek out new partnerships but to also help our existing
partners realise the full potential of their businesses through new products and
access to various liquidity pools, thereby maximising returns for CMC and our
partners. We have the infrastructure and experience to continue our growth in
this huge market.
It has been an exciting year and I look forward to working with my superb team
over the coming years to add more value and growth to an already exciting
business.
Treasury Management and Capital Markets
Over the last couple of years, we have been building a Treasury Management
and Capital Markets Division; an area I have extensive experience in due
to my banking background. The development of this division has become
necessary as the Group continues to expand and diversify.
Today, we are managing substantial cash and currency balances, trade
settlements and multiple venue clearing. Our annual trade turnover is more
than US$4 trillion and growing, driven by our institutional business and new
product additions. We are managing a number of prime brokers, banking
relationships, exchanges, and partnerships all around the world. With
oces in 12 countries, a large stockbroking business, cash settlements, and
expanding B2B and institutional partnerships, we have become a technology-
based, multi-currency global organisation, which requires not just a focus on
technology but also on treasury management functionality.
As part of our Treasury Management Division, we have linked all our overseas
oces to a Treasury Management System (“TMS”) to centralise all foreign
exchange (“FX”) transactions and cash balances onto one real-time platform.
All currency and cash movements are centrally managed by the treasury
team, who then lock in FX profits, whilst also managing our cash with prime
brokers, banks, exchanges, and partners, to optimise capital market returns.
This ensures our cash and trade settlements are as ecient as possible,
thereby freeing up capital to invest. It is an amazing value add to the business
and generates additional income through optimisation and eciency.
To be clear, this is not a risk book of business; it is capital markets and interest
rate optimisation. It is cash deployed eectively in the right venues to earn
the maximum return in the capital markets. Via the TMS platform we can also
centralise all cash foreign exchange exposures and settlements, locking in
currency exchange rates and optimising foreign exchange profits.
The treasury management team is there to optimise liquidity, settle trades
and optimise our cash flows. This has added great scale to the business and
additional incremental profits. In our financial accounts for FY24 we have a
record £39.7 million as other income. This includes interest income from the
higher interest rate environment but within that figure there are the eciencies
of our TMS and the additional value this brings.
In the coming years we will provide a more granular breakdown as this side of
the business expands and matures. Treasury management is important and
necessary as we expand our B2B and institutional business, as well as our
cash product range. It will help us win more business and will help us to remain
competitive.
Financial performance
Financial performance in the year has been strong. Net operating income
of £332.8 million (FY23: £288.4 million) was up 15% with continued good
momentum across our B2B segment, and profit before tax for the year was
£63.3 million, up 21% on FY23. Other income continued to benefit from higher
global interest rates, as well as our new centralised TMS.
Whilst operating expenses, excluding variable remuneration, are higher in the
year, much of this was driven by a non-recurring impairment charge and an
increase in net sta costs relating to the annualisation of higher headcount
levels for much of the year, as well as the higher termination costs resulting
from the reduction in global headcount.
Driving ecient performance throughout the business has been a central
focus over the course of FY24, and this includes the introduction of the
aforementioned TMS, but also extends to our disciplined focus on costs.
As announced at the half year, the business has reached the peak of its
current investment cycle and H2 saw us complete a cost review designed to
rationalise our cost base and drive synergies through our global operations.
This includes the merging of support functions, streamlining of reporting lines
and greater focus on our capital allocation, which will generate sustainable
cost savings from FY25 onwards.
We remain firmly committed to continued investment in our business and
technology platforms to maintain our competitive advantage. However,
following years of strong investment, we are now in a position to leverage our
operational strength to grow eciently. We continue to see opportunities
to rationalise the cost base as we maintain our ongoing focus on delivering
sustainable cost savings.
Our financial performance in FY24 leaves the Group in a strong position and
has laid the foundation for another successful year ahead.
Delivering growth through diversification
Underpinning our growth agenda is our diversification strategy, which has
opened many opportunities for the business around the world. This strategy
is predicated on a rigorous programme of continuous product upgrades, a
sustained commitment to providing world-leading technology for our clients
across all business lines and further expansion of our reach across both new
geographies and markets.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 15
Annual Report and Financial Statements 2024
Continuous product development
FY24 has seen CMC continue to diversify its product oering. Our approach,
which is on the focused expansion of asset classes to strengthen our levels
of engagement is critical in enabling us to continue to support our clients. This
includes the rollout of OTC options, with futures and exchange traded options
set to be delivered in H1 FY25. The addition of cash equities to our institutional
oering has allowed us to expand the services available to this valuable
segment. On UK Invest, we have added mutual funds in FY24, and SIPPs post-
financial year-end, as well as continued updates designed to enhance the user
experience. Invest Australia also expanded to oer cash cryptocurrencies.
Sustained commitment to world-leading technology
Underpinning our continued product development is our unwavering commitment
to being a world-leader in financial markets technology. Our CMC Markets Connect
brand and API ecosystem is the foundation for our growth and expansion and
the power of this technology has proven critical in securing a number of large
B2B partners, such as Revolut. This builds on the already extensive network of
partnerships that we have in place and our ability to provide larger institutions with
complex, bespoke builds, cements us further as the partner of choice and reinforces
our deep understanding of the financial sector and technical superiority. Elsewhere,
we have launched our CMC Invest Singapore platform, and we continue to enhance
our connectivity to more execution venues, ECNs, and client types across this vast
electronic marketplace. Looking to the future, we remain committed to a disciplined
level of continued investment over the medium-term, leveraging technology to drive
innovation and growth.
Expansion across new geographies and markets
A core aspect of our diversification strategy is expansion across new regions
and markets. In addition to the launch of Invest Singapore, we have also
expanded our operations in the Middle East with our subsidiary in Dubai’s
International Financial Centre and we have placed a renewed emphasis on
our European operations, with a focus on strengthening the governance and
capability of this region as a lever for growth. Meanwhile, our content and
thematic investing tool, Opto, achieved significant milestones, notably the
completion of equities trading functionality, which is set to launch imminently.
Through continued and targeted regional expansion across the world, CMC
continues to unlock new opportunities, delivering sustained value creation for
shareholders.
Regulatory change
As we outlined as part of our half year results, updated regulations governing
Consumer Duty in the UK were enforced for financial services companies
from 31 July 2023. These regulations are designed to establish a rigorous
level of consumer safeguarding in financial dealings. The integration of
these obligations within the Group has proven eective, and CMC remains
committed to refining its procedures post-implementation, while monitoring
client outcomes to try to ensure their ongoing financial goals are met.
CMC also intends to comply with the European Union’s Digital Operational
Resilience Act, applicable from January 2025, which seeks to promote cyber
resilience by enhancing ICT risk management and cyber risk management
across financial services. Requirements include the reporting of major ICT-
related incidents, digital operational resilience testing, information sharing, and
measures and requirements related to the use of ICT third-party services.
People and sustainability
As the emphasis on sustainability continues to influence financial markets,
our goal is to empower both our clients and employees with the tools and
expertise needed to make informed and ethical choices, both in their
investments and in the workplace. We acknowledge and embrace the finance
industry’s deep responsibility to support global sustainability initiatives and
appreciate the belief that integrating sustainable practices can yield tangible
advantages for our business.
Dividend
The Board has proposed a final dividend payment of £20.4 million, which
equates to 7.3 pence per share, resulting in a total dividend payment of 8.3
pence per share for the year. This is in line with the dividend policy of 50% of
profit after tax.
Outlook
With the launch of new product initiatives, further technological advancements,
and the expanding opportunities created by our diversification strategy,
combined with our programme to rationalise costs, we are confident in the
business’ ability to generate robust levels of income on a leaner cost base. This
will drive an enhancement in profit margins in the year ahead. Management
is anticipating achieving net operating income of between £320-360 million
in FY25, on a cost base, excluding variable remuneration and non-recurring
charges, of around £225 million.
I look forward to continued exciting profitable growth in the years to come.
Lord Cruddas
Chief Executive Ocer
20 June 2024
Chief Executive Ocer’s statement continued
16 – CMC Markets plc
Annual Report and Financial Statements 2024
Underpinning our continued product
development is our unwavering commitment
to being a world leader in financial
markets technology. Our API ecosystem
is the foundation for our growth and
expansion and the power of our technology
has proven critical in securing a number of
large B2B partnership wins in the year.”
Lord Cruddas
Chief Executive Ocer
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 17
Annual Report and Financial Statements 2024
Our strategy
01
Over the preceding year, we have made considerable
progress in implementing our strategic vision. 2024
saw CMC Markets achieve record levels of net
operating income outside of the COVID-19 impacted
2021 financial year as our diversification strategy
opened up new opportunities around the world.
Going forward, our strategy is predicated on our
“institutional first” approach and the delivery of
sustained profit margin expansion.
Having reached the peak of our investment cycle,
CMC is committed to driving eciencies through
disciplined cost management and leveraging the
Group’s scalability to deliver enhanced profitability.
As a leader in technology, we also remain committed
to a disciplined level of continued investment to
support growth opportunities and maintain our
competitive advantage, however, following years
of strong investment, we are now in a position to
leverage our operational strength and grow in a
moreecient manner.
Underpinning this ecient growth and expansion
is our institutional focus. Our FY25 roadmap will
seek to continue to drive the business forward to its
diversification goals across products, technology and
geographies, but with a particular focus on our B2B
and institutional oering. The foundation of this is our
CMC Markets Connect platform, which provides white
label and API connectivity and is already proving a
powerful tool in our B2B and institutional growth.
This strategy for future growth is founded upon three
core principles, that include:
– trading platform product diversification;
– investment in B2B technology capability; and
– expansion of invest platforms and institutional oering.
We have made great progress against these
throughout the course of FY24 and will continue
to prioritise these objectives going forward, with a
particular focus on our B2B oering the delivery of
enhanced profit margins.
Our focus
for 2025
1 Platforum, February 2023.
Trading platform
productdiversification
We continue to diversify our product oerings, by establishing
a multi-asset interface within our core trading platform. This
approach aims to expand the range of assets available for
our clients to trade, thereby enriching their experience and
strengthening our engagement, enabling us to secure a larger
portion of their trading activity. Our commitment and approach
to innovating and leveraging our products has led to the
development of our cutting-edge customer oering, enabling
us to be the one-stop financial trading and investment services
platform for the future.
Achievements in 2024
– Expanded our product range across our platforms to
enhance our support for our clients’ investment portfolios
and increase our share of their wallet. These include cash
equities, index options, cryptocurrencies and a wider range
of money market investment products.
– In Asia Pacific, the enablement of cash crypto trading for
Australian clients has further consolidated the Group’s
position as Australia’s second largest retail stockbroker,
holding a 16% market share.
– Continued development of our broader technology platform
with transformation of the API layer through the use of cloud
and the latest “DevOps” practices to facilitate the faster
introduction of new products across our trading front ends.
– High platform availability, continued improvements in
platform performance and the addition of new services that
better equip our clients by facilitating learning, helping them
to take advantage of market opportunities.
18 – CMC Markets plc
Annual Report and Financial Statements 2024
Investment in B2B
technology capability
We continue to drive growth through the expansion of our B2B
partnerships. Our technology is our competitive advantage, and
the introduction of our comprehensive Open API ecosystem
facilitates collaboration across the Group, enabling CMC and
our B2B partners to realise cost eciencies and enhance
operational eectiveness. By directly engaging with our
clients, we oer them access to our broad range of liquidity,
products, and technological resources, fostering long-lasting
relationships.
Achievements in 2024
– The power of our technology platform has been central to
our ability to expand our oering and provide new products
and capabilities for our clients. We have continued to
evolve our existing product oering to cater to even larger
institutions, resulting in greater revenue returns.
– The power of our technology and API ecosystem is critical
in securing a number of large partnership wins, such as
that recently announced with Revolut, and building on the
extensive network of B2B partnerships we already have.
– Continued to optimise our FX product and technology
connecting to more execution venues, ECNs and client
types to access a vast electronic market, strengthening
our position as the go-to non-bank liquidity provider in the
B2B market.
– Delivery of new services and technological upgrades that
better equip our clients to manage their performance and
take advantage of market opportunities.
Expansion of Invest
platforms and
institutionaloering
At the core of what we do is empowering our clients to
build long-term wealth using our investment platforms. The
self-directed investment platform sector presents significant
growth opportunities, and we see additional opportunity within
our institutional segment as we continuously boost our volumes
as a non-bank liquidity provider and cultivate new trading
partnerships worldwide.
Achievements in 2024
– Successful launch of CMC Invest Singapore, demonstrating
the transferability of the Invest platform and further
diversifying geographic reach.
– Expansion of the Dubai subsidiary in the DIFC, providing
us with a strong foothold in the Middle East with focus on
targeting institutional clients.
– Institutional grade cash equities platform and API launched
for UK clients, with LumeFX connectivity platform driving
scalability of pricing and execution.
– Partnered with global financial institutions to deliver complex
bespoke builds, cementing us further as the partner of
choice and cementing our deep understanding of the
financial sector and technical superiority.
02 03
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 19
Annual Report and Financial Statements 2024
Key performance indicators
Our Group KPIs monitor the delivery of
long-term value through a focus on client
quality and operating eectiveness.
Net operating income
£332.8m
KPI definition
This is a statutory measure, which represents
total revenue net of introducing partner/client
commissions and spread betting levies.
Why we measure
Key operating metric.
Link to strategy
1
2
3
]
23
£288.4m
£281.9m22
24 £332.8m
Statutory profit before tax
£63.3m
KPI definition
This is a statutory measure, which comprises net
operating income less operating expenses and
interest expense.
Why we measure
Key operating metric.
Link to strategy
1
2
3
[
23
£52.2m
£91.5m22
24 £63.3m
Profit after tax
£46.9m
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
23
£41.4m
£71.5m22
24 £46.9m
Basic earnings per share
16.7p
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.
Link to strategy
1
2
3
23
14.7p
24.6p22
24 16.7p
Ordinary dividend per share relating
to the financial year
8.30p
KPI definition
Any dividend declared, proposed or paid relating
to the financial year.
Why we measure
Key shareholder valuemetric.
Link to strategy
1
2
3
23
7.40p
12.38p22
24 8.30p
Group KPIs
Tracking our progress
20 – CMC Markets plc
Annual Report and Financial Statements 2024
Trading net revenue
£259.1m
KPI definition
Spread, financing and commission fees charged
to CFD and spread bet clients, plus/minus
risk management revenue generated by the
management of client and hedge positions.
A reconciliation of trading net revenue to the
primary statements is provided on page 180.
Why we measure
Used to measure the total revenue generated
from Trading segment.
Link to strategy
1
2
3
23
£233.1m
£229.6m22
24 £259.1m
Trading revenue per active client
£4,685
KPI definition
Net 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.
Link to strategy
1
2
3
23
£3,968
£3,57522
24 £4,685
Platform uptime
99.95%
KPI definition
The percentage of trading hours that clients
are able to trade on the Next Generation
CFD platform.
Why we measure
The 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
23
99.97%
99.95%
22
24 99.95%
Trading business KPIs
Key to strategy:
1
Trading platform product diversification
2
Investment in B2B technology capability
3
Expansion of Invest platforms and institutional oering
See more on pages 18 and 19
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 21
Annual Report and Financial Statements 2024
Key performance indicators continued
Net revenue
£34.0m
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 Invest business and attracting and
retaining high value clients.
Link to strategy
1
2
3
23
£37.9m
£48.0m
22
24 £34.0m
Platform uptime
99.95%
KPI definition
The percentage of trading hours that
clients are able to trade on the CMC Invest
Australia platform.
Why we measure
The CMC Invest platforms are 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
23
99.93%
99.91%22
24 99.95%
Investing business KPIs
Key to strategy:
1
Trading platform product diversification
2
Investment in B2B technology capability
3
Expansion of invest platforms and institutional oering
See more on pages 18 and 19
22 – CMC Markets plc
Annual Report and Financial Statements 2024
At CMC we understand our responsibilities
towards all of our stakeholders. The Board
continues to take account of the interests of
these stakeholders when taking key decisions,
recognising the impact of its decisions on
dierent groups.
More information on our engagement with stakeholders and the outcomes
over the financial year under review is included on pages 25 to 27.
The Directors are mindful of their duty under Section 172 of the Companies
Act2006 (“Section 172”) to act in a way which they consider, in good faith,
is most likely to promote the success of the Company and its members
as a whole and, in doing so, consider the matters set out in Section 172 at
each meeting. This includes, amongst other things, having regard to wider
stakeholder interests when making decisions and considering the interests
ofthe various stakeholders.
Section 172 statement
Relationships with stakeholders
Decision making by the Board
– Review key commercial financial
performance information and forecasts.
– Assess and discuss
operational metrics and key
performance indicators relating
to business outcomes and
stakeholder measures.
– Evaluate management’s risk
assessments against the Enterprise
Risk Management Framework and
associated risk mitigation strategies.
– Analyse the customer, market
andregulatory trends and the
competitor landscape.
– Receive updates on regulatory,
compliance and legal matters.
Board information
– Define the Group: strategy,
structure, operational objectives
andlong-term goals.
– Consider growth strategies including
expanding the business into new
jurisdictions and commercial areas or
developing new strategic partnerships.
– Allocate Group resources to achieve the
designated Group strategic outcomes.
– Consider the objectives and desired
outcomes of stakeholder groups.
– Assess technological developments
that arise both internally and externally
and how these developments
can be leveraged to the benefit
ofstakeholders.
– Approve material investments, financial
plans and budgets, capital expenditure,
strategic initiatives and changes in the
Group structure or operation.
– Review and agree changes to
corporate policies, governance
arrangements and risk and
controlstructures.
– Oversee Group succession plans, key
Board and management appointments
and Executive remuneration.
– Determine dividend payments
andother mechanisms to return
valueto shareholders.
– Approve external financial reporting
and key announcements to
the markets.
Board strategic discussion Board decision
Section 172 considerations:
Likely long-term
consequences
Employee interests
Relationships with customers,
suppliers and others
The impact on the community
and the environment
Maintaining reputation
for high standards of
business conduct
Acting fairly between
members of the Group
Our stakeholders:
Shareholders
People
Local community/charities
Environment
Suppliers
Regulators
Clients
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 23
Annual Report and Financial Statements 2024
Key decisions
The key matters, and their impact on stakeholder interests, considered by the Board and/or management during the year aresetout below:
Investment in
newbusiness
opportunities
The Board continued to oversee and support investment in new business
opportunities. During the period the Invest product was launched in Singapore
and the Board approved the continued expansion and development of the
Opto product in the US. In early 2024 we launched the Options platform to
clients providing access to a fast growing market which will benefit from CMC’s
technology investment. In April 2024 the Invest SIPP product was launched
in the UK.
Our stakeholders:
Section 172 considerations:
Review of the
Enterprise Risk
Management
(“ERM”) framework
The Group Risk Committee and the Board reviewed and agreed enhancements to
the ERM that followed the review of our risk management systems by Independent
Audit Limited. The ERM framework was reviewed and a series of updates agreed
during the year to further strengthen our risk management systems. Further
information can be found in the Risk Management section on page 59.
Our stakeholders:
Section 172 considerations:
Business to business
During the period the Board reviewed a new business-to-business opportunity
and the development required to support the new partnership. Accordingly, it was
announced on 18 June 2024 that CMC had launched a new fintech partnership
with Revolut. This announcement supports the strategy of growing our business-
to-business oering and provides Revolut customers with access to CMC’s
proprietary technology and cutting-edge customer oering.
Our stakeholders:
Section 172 considerations:
Dividend
The Board considered appropriateness of the current dividend policy and no
changes were recommended to the existing policy. The Board therefore proposed
the final dividend for the year, subject to approval by shareholders, of 7.3 pence per
Ordinary share.
Our stakeholders:
Section 172 considerations:
Sustainability
strategy and targets
The Board continues to support management’s evolving approach to sustainable
business. During the year the Board reviewed developments in the Our Tomorrow
sustainability strategy and approved the approach to charitable donations and
employee volunteering through our Community Impact 121 strategy.
Our stakeholders:
Section 172 considerations:
Consumer Duty
The Board approved the approach to the new Consumer Duty regime and the
work to embed Consumer Duty in the UK business. Oversight of the Consumer
Duty workstream was led by Clare Francis, Consumer Duty Champion and Chair
of the Group Risk Committee.
Our stakeholders:
Section 172 considerations:
Please also refer to the Group’s strategy and business model which are described throughout our Strategic report, our Risk management section (pages 59 to
68), ourSustainability section (pages 32 to 41) and our Corporate governance report (pages 70 and 71 and 75 to 82) for further information.
Section 172 statement continued
24 – CMC Markets plc
Annual Report and Financial Statements 2024
Stakeholder engagement
Clients
Why we engage
Meeting our clients’ needs is crucial for our business. Understanding what our
clients needs are, be they institutional or individual clients, continues to drive
our investment in and development of new products and services.
How we engage
CMC actively engages with clients to seek feedback across a range of
channels, including our client service, sales and product teams. The focus
on clients has further increased with the introduction in the UK of the new
Consumer Duty regime.
Appropriate marketing and the provision of educational material continues to
be a key feature, particularly in relation to leveraged products, to allow clients
to understand which products align best with their individual risk appetite.
Board oversight
The Board receives regular updates from management on client feedback.
Key issues are discussed with the Executives with a view seeking to improve
customer outcomes. Clare Francis is the Group’s Consumer Duty Champion.
Outcomes
With the support and oversight from the Board during the year, CMC Invest
in Singapore launched in September 2023, further expanding our invest
business. Launched in April 2024, the new UK SIPP product supports our
customers to achieve their long-term savings goal.
Our engagement with clients allowed us to continue to develop our Invest app.
People
Why we engage
Our employees define our culture and values. Having an engaged workforce
is central to our strategy and delivering great outcomes for our clients and
supporting our other stakeholders.
During the year we moved to a policy of full-time oce working as this
strengthens collaboration and innovation to the benefit of our clients. We also
announced two restructuring programmes that resulted in some reductions in
roles across the Group. During these times of change it is even more important
to engage with our people.
How we engage
Our employee engagement is driven through numerous channels.
Thisincludes team meetings or one on ones and more formally through
the designated Non-Executive Director with responsibility for workforce
engagement. We undertake a global employee engagement survey with
follow-up focus groups to better understand the results and hold “town
hall” style forums to enable communication and engagement between
management and employees.
Further information on how we engage with our people is described within the
Our Tomorrow section on pages 32 to 39.
Board oversight
The Nomination Committee (“NomCo”) receives regular updates from the
Group Head of HR on various people metrics and employee issues and the
outcome of employee surveys. The designated Non-Executive Director with
responsibility for workforce engagement joins sessions with employees and
reports back to the NomCo with the feedback from these sessions. More
information on the key focus of the engagement via this route is included
on page 80.
The NomCo continues to monitor risks relating to employee and people
matters and their potential impact on the business.
Outcomes
The NomCo discusses the feedback from all the engagement channels and
provides input to senior management. Further information on our current HR
initiatives is described in the Our Tomorrow section on pages 32 to 39.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 25
Annual Report and Financial Statements 2024
Stakeholder engagement continued
Regulators
Why we engage
Engagement with regulators is key to ensuring that we have in place
appropriate frameworks and controls to meet their expectations and
requirements in each jurisdiction in which we operate. As we expand our
operational footprint into new jurisdictions this continues to be an area of focus
for the Board.
How we engage
We engage in open and active dialogue with regulators, to assist their understanding
of our business and how we protect our clients and deliver good customer
outcomes. We seek to meet the expectations of our regulators through
upholding high standards of regulatory compliance and aligning our interests
with those of our clients. Our intention is to establish strong relationships with
our regulators as a responsible participant in the markets in which we operate.
Board oversight
The Board and/or the relevant Board Committee receives regular updates
from management on the Group’s compliance with its regulatory obligations
and certain communications with the regulators in each region in which we
operate. As reported on page 86, a number of structural governance and audit
issues were identified in an operating subsidiary during the year that required
engagement with the local regulator to agree the appropriate resolution.
Outcomes
During the year, we have monitored the progress of a number of regulatory
consultations and guidance documents and put in place project teams to
update or adapt our procedures and practices where appropriate in response.
The Board agreed the additional resources to resolve the matters identified in
the operating subsidiary, will provide oversight of the communication with the
local regulator and will monitor the closure of the auditissues.
Suppliers
Why we engage
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 tracking, as reflected in our Modern Slavery
Statement (available at www.cmcmarkets.com/group/about-us/governance),
and are committed to acting ethically and with integrity in all our business
relationships. A working group of relevant individuals from across the business
reviews controls and procedures and assesses their eectiveness.
How we engage
All business partners follow a mandatory procurement process to review the
external market and complete a robust evaluation of all available options. Once a
supplier is appointed, regular direct engagement between the business owner
and supplier is maintained through our Supplier Management Programme
(which sets out how we interact with our suppliers and vendor management).
As part of the procurement process, all suppliers are categorised within our
OneTrust tool, according to how critical the service or goods provided are to
the Group’s ability to service its clients. This categorisation determines the
frequency of interaction and level of engagement between CMC relationship
owners and the suppliers. We are continually enhancing this framework to
ensure we are always abreast of all relevant supplier issues or concerns and
over the next year there will be a focus on a roadmap to determine the scope
and frequency of our risk assessments and monitoring activities for suppliers.
Board oversight
The Board relies on the Executives to manage the relationship with suppliers
on a day-to-day basis. Any significant new relationships will be approved
by the Board, which will also receive information on any issues with current
material outsourced services suppliers.
Outcomes
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. Our average time to pay invoices is in line with our
standard supplier payment terms of 30 days. This ensures that all suppliers
are treated fairly and receive payment for services or goods provided in a
timely manner.
26 – CMC Markets plc
Annual Report and Financial Statements 2024
Shareholders
Why we engage
Our shareholders provide long-term support to our business and have
expectations on how the business performs.
How we engage
Engagement with current and prospective shareholders continues
throughout the year. Our Executive Board members communicate the
Group’s strategy and performance and receive feedback on both these
and other matters. We provide regular trading updates, half and full-year
presentations, the Annual Report and Financial Statements, our Annual
General Meeting and investor-related content on our website. The Chairs
of the Board and its Committees are also available to meet with major
shareholders.
Board oversight
Shareholder feedback and details of any major movements in our
shareholders are embedded within our regular Board meetings and are
integral to our decision-making process.
Outcomes
The Board takes into account feedback from shareholders that is obtained
after major announcements. The Chair of the Remuneration Committee
wrote to a number of our shareholders to set out the proposals for the updates
to our Remuneration Policy to be presented at the 2024 Annual General
Meeting and spoke with a shareholder that requested direct engagement.
More information is set out in the Governance section of this report on pages
94 to 114.
Local community/charities
Why we engage
We recognise the importance of supporting our communities through
initiatives with our charity partners.
How we engage
We maintain relationships through both financial and volunteering support
with charity partners that we have committed to support.
Board oversight
The Board promotes the support of local charities in all our global oces.
Outcomes
The Group and its sta have been involved in various charitable initiatives,
examples of which are provided in the Our Tomorrow section on pages
32 to 39.
Environment
Why we engage
CMC recognises that the Group has a duty to support the environment in
the areas that we operate. Our approach to our sustainability strategy can be
found in the Our Tomorrow section on pages 32 to 39.
How we engage
We continue to review the Group’s Scope 1, 2 and 3 emissions and how we will
seek to reduce our impact on the environment. More information is included in
the Our Tomorrow section.
Board oversight
The Board has considered the appropriate sustainability targets during
the year under review and emissions data in order to better understand the
Group’s carbon footprint. The Our Tomorrow section sets out details of the
data on our greenhouse gas emissions.
Outcomes
We have reported against the Task Force on Climate-Related Financial
Disclosures requirements and have provided further information in the Our
Tomorrow section of this report.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 27
Annual Report and Financial Statements 2024
Technology and innovation
As CMC continues on its digital transformation
journey the ongoing investment in technology,
underpinned by a global technology strategy,
is accelerating new product development and
ensuring CMC’s technology remains cutting edge
and able to deliver innovative and robust trading
technology to its retail and institutional customers.
New product
development and
operational eciency
continue to be
underpinned by
CMC’s digital
transformation and
technology strategy
Global teams, global standards
CMC delivers financial technology solutions to the consistently high standard
CMC and its customers expect based on a set of foundational technology
principles that underpin every new area of development. These principles
ensure that all individuals are aligned and can work unhindered towards
CMC’s overarching Group strategy. Our principles ensure alignment but
foster autonomy, never stifling innovation. Quality, security, and reliability are
paramount in every output.
Continued expansion of cloud technology
This year the technology teams have again further expanded CMC’s
cloud technology footprint. The platform components for both CMC’s new
Options product and its Cash Equities product have all been built fully cloud
native within CMC’s Open API architecture. Ongoing cloud adoption and
modern cloud engineering practices continue to underpin CMC’s product
development roadmap across all business areas. CMC fully commits to its
hybrid-cloud model, recognising the value in on-premises self-managed
systems augmented with cloud-native technology solutions. This is a powerful
and strongly favoured model, rather than a pure and sometimes headline
grabbing “race to the cloud” approach.
Operational eciency through technology
While CMC’s investment in product diversification and innovation is very
visible to its clients and shareholders, what is far less visible from the outside is
CMC’s continued commitment to using technology to strive for the highest level
of operational eciency. Through continuously investing in the automation of
internal processes and procedures CMC reduces operational costs as well as
manual error. CMC technology allows its operational sta to focus on the thing
that matters: servicing its clients.
Talented, focused people
Great technology is nothing without talented and committed people to
continually evolve and operate it. The most sought-after technology sta
want to work on fast-moving and progressive technology platforms. CMC’s
proprietary systems, exciting change programme and strong underpinning
technology strategy have allowed CMC to attract and retain some of the most
talented tech sta in the industry. A model of smaller, highly talented teams
brings continuous innovation to CMC’s platforms.
10%
reduction in 99th percentile
executiontime
99.95%
consistent uptime – Group wide
above99.95%
4x
increase in trade execution at
ourlowlatency colocation site
28 – CMC Markets plc
Annual Report and Financial Statements 2024
Case study:
CMC’s new Options product
CMC’s new Options product has been seamlessly integrated
into its proprietary desktop and mobile trading platforms, all built
on top of CMC’s strategic cloud-native “Open API” architecture
running in the AWS cloud.
Options products, pricing and execution are fully integrated into
CMC’s proprietary core systems, and powered by a third-party
pricing and matching engine.
The world of options trading brings many challenges from a
technology perspective, with a vast universe of underlying
options contracts having the potential to flood existing systems
with data.
Coupled with this, the complex mechanics of an Options product
can take a huge amount of time and investment to bring a
product to market.
CMC’s use of cloud technology, investing in existing proprietary
systems, and integrating third-party vendor platforms are key
pillars of CMC’s technology strategy and all helped greatly
accelerate CMC’s Options product delivery and reduce time
to market.
See more at www.cmcmarkets.com
Technological and business teams working as one
While it’s interesting for technology teams to deliver innovative technology
solutions and then present them to the commercial and operational teams, true
value has been unlocked through CMC’s digital transformation programme
where the technology, product development and operational teams now work
hand in hand throughout the software development process. This is CMC’s
approach. IT sta can leverage the expertise of business teams at every stage
of a build to ensure technology deliverables meet product objectives and
embed themselves smoothly into the operational running of our business.
Operational excellence supporting
leading-edge innovation
We have continued to maintain the high levels of resilience expected by clients,
regulators and investors in the financial services industry. The Group’s focus
on the importance of operational resilience is reflected in the consistently high
uptimes for each of the core platforms. The trading platform saw uptime in line
with previous years at 99.96%, Invest UK continued its strong performance at
99.98% while Invest Australia saw improved uptime at 99.95%, and the new
institutional oering under CMC Connect saw uptime at 99.94%.
In addition, execution performance improved with a further 11% reduction
in the 99th percentile execution times, showing the continual improvement
and also consistently fast execution clients demand. CMC Connect and
our low latency connectivity are continuing to grow at pace with four times
as many trades executed through that site when compared to the previous
year. Asalways we continue to invest in core infrastructure and technology
tosupport the business ambition and technology strategy.
Options
CMC continues to invest in products and technology, with the launch in
early 2024 of our new Options platforms. We will continue to invest and
expand our oering over the coming months when we plan to launch further
Options products.
In due course the Options platform will be available to our full suite of clients,
including CMC Invest clients, institutional clients and our B2B business
platforms, through white/grey label and API connectivity. We will also roll
theplatform outto our oces globally over the coming months.
Options are one of the fastest growing financial instruments globally and
the most requested by our clients and we see Options as a major growth
opportunity for the Group.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 29
Annual Report and Financial Statements 2024
Technology and innovation continued
APAC CMC Invest –
technology
Cryptocurrencies (AU only)
CMC Invest Australia partnered with blockchain infrastructure and custody
provider Paxos to power our new digital asset oering. Launching in late 2023,
clients can trade eight well-known cryptocurrencies, 24/7, on our award-
winning platforms from as little as $25. There is no need to pre-load a virtual
wallet with foreign currency as all trades are placed directly from their available
AUDaccount balance.
New trading features
In addition to platform redesign and enhanced UX, we unveiled an array
of exciting trading features throughout the year, benefiting all CMC Invest
clients. These included sought-after TradingView charts, thematic stock and
ETF watchlists, ESG risk ratings, mobile push notifications, new international
order types (market to limit, GTC and GTD), Salesforce Chat integration, and
theintroduction of cryptocurrencies to our Australian clientele.
Global expansion
CMC Markets’ strategic initiative to expand its Invest business globally
prompted a comprehensive overhaul of both the back and front ends of
our trading platforms in FY24. Collaborating with top industry vendors, we
seamlessly integrated new electronic ID and KYC services to streamline
our onboarding process. Teaming up with Forgerock bolstered identity
management and security through multi-factor authentication (“MFA”). We
also upgraded our back oce systems to support multiple trade currencies
and integrated a JPMorgan Wallet for convenient local payments all powered
by our cloud-first strategy on AWS.
Singapore launch
CMC Invest Singapore provides access to 15 markets without any minimum
order size and oers commission-free trading in five key markets, including
Singapore, the UK, the US, Canada, and Hong Kong, spanning shares, ETFs,
and REITs. Investors can explore over 40,000 listed securities accompanied
by fundamental screening tools, TradingView charts for in-depth technical
analysis, and ESG risk ratings. Crucially, there are no platform, settlement,
custody, or withdrawal fees. With access to our analysts, conferences, brokerage
rebates, a comprehensive trading toolkit, and a dedicated 24/5 client service
team, the Invest platform serves as a one-stop super app to fulfil all our
clients’ needs.
We designed Invest to be
“radical” – radically customer
focused, radically transparent
pricing, and radically simple to
use. But don’t let simplicity fool
you. After all, some of the best
investing in the world is as
simple as consistent regular
investing that compounds over
time. It helps to have a low cost,
transparent partner on your
growth journey. That’s why we
built Invest. Yourcompounding
friend.”
Chris Forbes
Head of CMC Invest Singapore
30 – CMC Markets plc
Annual Report and Financial Statements 2024
Pricing model
Constructed on a foundation of three tiers (with a fourth slated for launch
soon), our pricing model revolves around a monthly subscription that
incorporates zero brokerage fees, with additional considerations for tiered
FX settlement and AUM per customer pricing: the more assets with CMC,
the better value for your savings and investments – we grow with you. This
approach is detailed on our website and oers clients transparency on fees
and oers flexibility depending on a client’s trading frequency and strategy.
Visit www.cmcinvest.com/en-sg/ for more information.
Client engagement
Thus far, CMC has hosted three roadshows, organised five conferences,
and delivered over 162 research pieces tailored for retail customers, aiding
in the digestion of information, generating trade ideas, and enhancing their
awareness of opportunities – all of this in four months since launch. Paired
withour active presence on various social media platforms such as Instagram,
Facebook, Telegram, LinkedIn, and TikTok, we are empowering investors
to engage with others in fostering a more informed and inclusive investment
community.
Brand ambassador
Our brand ambassador, Shanti Pereira, serves as an exemplary model of
success, both in her athletic achievements and beyond. Holding a CMC
Invest account herself, she maintains a diversified portfolio comprising
single securities and ETFs across various sectors, including yield (bonds),
semiconductor ETFs, S&P ETF, emerging markets ETF, and exposure to
AIviaMicrosoft, and sports apparel companies.
Looking to the future
Invest is looking to oer options and wealth management services in
the future, featuring a Robo Advisory solution and a regular savings plan
tailored for investors aiming to achieve diverse financial goals, ranging from
purchasing a car to funding education, retirement, or even a family wedding.
Options represent on the largest and most rapidly expanding markets globally.
OTC Options oer unparalleled customisation in terms of size and expiry to
align with individual preferences. Unlike Exchange Options, which are dictated
by contract size or multiplier, OTC Options maintain a one-to-one relationship,
empowering users to determine both size and premium according to their
needs. This unparalleled flexibility will position our product at the forefront of
the industry.
Investing in the user experience
Central to this transformation was prioritising user experience (“UX”).
Adoptinga UX/UI-first approach, we developed a robust design system
tailored for our new web platform. This scalable solution, ingrained into
our codebase, ensures long-term eciency gains in feature development,
prioritises accessibility, and eortlessly accommodates our extensive white
label oerings, facilitating swift expansion into new markets in the future.
Leveraging this design system, we launched our inaugural cloud-based
trading platform for the Singapore market in August 2023 and expect to roll
this out to Australian clients in mid-2024.
Redesigned platform
The revamped web platform introduced a user-friendly dashboard summarising
client positions, a streamlined main menu for intuitive navigation, and a responsive
design optimised for mobile devices. Simultaneously, our highly rated native
mobile apps were updated to seamlessly integrate with Singaporean functionalities,
including robust MFA support and SGD account currency compatibility.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 31
Annual Report and Financial Statements 2024
Our five
sustainability
pillars
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Our commitment to
responsible practices
and values ensures that
we are aligned with the
worldwide shift towards
a sustainable future
within capital markets.”
Our Tomorrow:
taking a positive
position
Last year we introduced the
Group’s Our Tomorrow
sustainability strategy and its
fivecore pillars structured to
focus delivery on our material
environmental, social and
governance (“ESG”) risks.
We remain focused on equipping both our clients
and employees with the necessary tools to invest
in a better future and strive to achieve this by
oering cutting-edge technological solutions
that protect, educate, and motivate our clients
and employees to invest in a way that has positive
impacts now and for the future. Our commitment
to responsible practices and values ensures that
we are aligned with the worldwide shift towards a
sustainable future within capital markets. We have
updated the work we completed in FY23 on the
materiality of the ESG risks across our business.
Through FY24 we have continued to follow the
five sustainability pillar approach to sustainability
detailed in last year’s report.
Sustainability
32 – CMC Markets plc
Annual Report and Financial Statements 2024
The Group acknowledges the presence of risks
and potential financial losses associated with our
products and their potential impact on our clients.
We always aim to enhance client experience while
ensuring that the Group maintains alignment
with global regulatory bodies. We continue to
monitor our overall commitment to our client
baseexperience.
A key indicator of client experience are satisfaction metrics such as Qualtrics
and Net Promoter scores. In FY23 we had an upper quartile Net Promoter
Score (“NPS”) for the UK and Singapore. In FY24 we are pleased to confirm
we have maintained that position.
In 2023 we confirmed we were fully committed to understanding how to best
cater to the needs of these diverse and less experienced investors, with a
central focus on education. To support this commitment, we established a
freely accessible Learning Hub on our website for all investors. This resource
aimed to assist new clients in navigating the distinctions between our product suite
and FX trading, as well as providing insights into key thematic trends in the
market. Through this initiative, we aim to empower investors with knowledge
and help them make informed decisions.
Consumer Duty
The FCA’s Consumer Duty Regulation gave CMC the chance to analyse and
review the retail client journey to determine whether our clients are receiving
good outcomes. This involves providing evidence that we are acting in good
faith, avoiding causing foreseeable harm and enabling clients to pursue their
financial objectives. CMC’s Consumer Duty programme is anchored across
the culture of the organisation. The programme implemented and embedded
at CMC received a positive report when audited by Grant Thornton our
internal auditors, in FY24.
Client Positive
We have always held ourselves to the highest
standards when conducting our business
and strive to be industry leaders through
our commitment to business ethics and
professionalintegrity.
Delivery of sustainable outcomes should be embedded as part of our
everyday business practices, so we have made all functions responsible
for delivering in the sustainable way. To further embed sustainability
into the everyday management of our business we have changed the
terms of reference for our Sustainability Committee to be a senior level
oversight function responsible for ensuring sustainability is delivered in
a commercially appropriate way. In FY23 we were compliant with 9 of 11
of therecommendations of TCFD’s 2021 guidance in accordance with
ListingRule 9.8.6. 11. In addition:
– In FY23 all Executive Directors were set objectives relating to DEI across
the business. For FY24 this has been broadened to include wider ESG
measures with a direct link to annual reward.
– Female representation on our Board remains at 33% and for our
Non-Executive Directors 66%. Furthermore, in FY24 we appointed
anewCFO who is of North African heritage.
– To support gender growth in senior roles we now track the diversity of
succession candidates through our succession planning processes.
– The Board training plan for FY25 includes sustainability themes where relevant.
– Through our Modern Slavery Steering Committee, we have now improved
the monitoring of modern slavery practices in our supply chain through a
risk-based questionnaire in the tendering process.
Whilst we acknowledge that we do not comply with the diversity targets set
out by the Listing Rules at present, as disclosed in the Nomination Committee
report on page 93, we will continue to ensure that full and proper consideration
is given to gender and ethnic diversity as part of the process for making
appointments to the Board and keep our position in relation to appropriate
targets under review.
Change Positive
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 33
Annual Report and Financial Statements 2024
Sustainability continued
Platform Positive
During FY24 we have continued to actively
exploreopportunities in sustainable investment
and expanding our range of investment products
and platforms to provide our clients with more
options to direct their investment capital to assets
that prioritise ESG and sustainability.
We are committed to oering our clients an investment product suite that
enables them to invest responsibly and understand the growing trends
towards sustainable investments. Last year we integrated Sustainalytics data
into our CMC Invest UK platform. This enables clients to obtain sustainability
data on assets they are considering making investments in. We have also
integrated tools for clients to set preferences and screen assets according to
their own sustainability preferences and values.
In FY23 89% of assets on the CMC Invest platform were supported by ESG
data from Sustainalytics which has increased to 90% in FY24. In addition:
– ESG risk ratings have been available on both our web and mobile
platformssince early 2023 and cover over 3,000 domestic and
international instruments.
– We released Opto thematic watchlists onto the mobile apps in late 2023.
These group instruments into 44 themes including “Clean Energy”,
“Recycling”, “Solar”, “Wind”, “Biotechnology” and “Carbon Transition”.
Approximately 60% of the Opto themes oered on the Invest app currently
have an ESG exposure.
– We released our ESG preferences feature which allows users to select their
ESG preferences. When the user views an asset on the app they are then
informed that it does or does not meet those preferences. This feature was
awarded the “best ESG feature” award by finder.com.
– We continued to strive to ensure the products we provide and the platforms
on which we provide them are accessible to all. In FY24 our platforms were
actively used by 13% females compared to 10% in FY23.
Case study: Platform Positive
Empowering sustainable
investing: Opto’s
commitment to ESG
Opto is revolutionising thematic investing with a strong focus
on environmental, social, and governance (“ESG”) principles.
Our app oers a diverse range of investment themes, including
wind energy, clean energy, solar power, hydrogen, uranium,
and electric vehicles. Each theme is designed to provide
investors with opportunities that align with their commitment
tosustainability and positive impact.
In addition to these investment options, Opto provides exclusive
content that oers in-depth analyses of each theme. This includes
market trends, emerging technologies, and detailed Company
insights, enabling users to make informed investment decisions.
By highlighting the leaders in innovation and sustainability, Opto
empowers investors to build portfolios that support both their
financial goals and their ethical values.
We are committed to oering
ourclients an investment product
suite that enables them to invest
responsibly and understand
thegrowing trends towards
sustainable investments.”
34 – CMC Markets plc
Annual Report and Financial Statements 2024
People Positive
People remain core to all that CMC achieves
and ensuring we attract, develop, and motivate
the best in our industry remains critical to our
future success.
FY24 has, however, proved a challenging year for the firm and its employees
and we have had to take dicult steps to ensure we have a profitable long-
term future and adapt to an ever-changing business landscape.
As our investment cycle moves into another phase, underwent two
significant restructures resulting in redundancies for approximately 15% of
our employees. In addition, in July we took the decision to move from a hybrid
working organisation to one that was oce based five days per week. Whilst
voluntary turnover has only been partially impacted at 23% (20% in FY23) the
uncertainty this created has impacted our full engagement score which has
reduced from 72% to 37% globally. The firm remains committed to providing
an environment where employees can grow their careers and prosper
economically and looking to take action to improve engagement in the coming
financial year.
Whilst overall we have reduced our headcount, we continue to hire in all
markets to ensure we have skill sets that reflect the diverse business we are
now developing. The majority of our hires are delivered through our internal
talent team and employee referral program, significantly reducing cost
whilst improving the quality of the candidates we hire. We continue to focus
on providing quality career development for our employees with 75 being
promoted internally or making a developmental role change.
Our diverse workforce brings together individuals with dierent backgrounds,
experiences, and perspectives. By working to improve our data collection
processes and trust from our employees we have improved the reporting of
diversity-related data across the business. For example in FY24 47% of our
employees provided ethnicity data compared to 17% in FY23. CMC is proud
to have employees of may dierent ethnicities across its 14 oces. Our global
gender balance has remained at 29% female this year, with Females in senior
management roles (using the FTSE 250 Women Leadership Framework) at
19% in March 2024 (20% in March 2023). We also delivered inclusivity training
to all our global senior managers and plan to deliver this to allemployees in
FY25. We actively support colleagues and applicants with disabilities through
our Equal Opportunities and Flexible Working Policies and our training,
development and career paths are accessible to all.
We have continued to invest in early careers, delivering paid internships,
apprenticeships and graduate trainees through a range of channels, ensuring
we provide opportunities to those whose access to financial services careers
would be limited. We have maintained our long-term partnership with Making
the Leap, sponsoring its careers fair and providing mentors for its young
people and permanent roles where appropriate.
Case study: People Positive
Improving our Diversity Data
Our “Count Me In” campaign reviewed our processes for
collecting diversity data and took proactive measures to build
employee trust. This has resulted in CMC more than doubling
the amount of employees entrusting the business with their
diversity-related data. We are now able to better reflect that
datain the way we do business, so ensuring we continue to
hire,retain and motivate the best talent in our industry.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 35
Annual Report and Financial Statements 2024
In talent development we have continued our commitment to employees’
professional growth and advancement and giving employees opportunities
to learn new skills, acquire knowledge, and develop their talents. Despite the
market challenges faced by the organisation we maintained our investment in
learning at FY23 levels and we enhanced our ability to support employees’
development by recruiting Learning Managers in our London and Sydney oces.
Community engagement remains a core commitment for CMC with regionally
led programmes of activity supporting a range of causes:
– Our European oces initiated their inaugural charity programme this year,
with charity partners that closely align with our sustainability goals. We
identified a team of “Charity Champions” to support the delivery of the
programme, led by our Head of Europe.
– Our UK oces completed their three-year partnership with three charity
partners focused on social mobility from school age to young adults making
their first steps into the professional world. We have continued to support
our employees’ charity fundraising through pound for pound matching and
other fundraising initiatives. Looking forward, we have renewed our long-term
commitment to support Making the Leap, a leading charity driving social
economic change for young people from all backgrounds. We are also
realigning our charitable programme to support teams of employees looking
to take part in group-based fundraising challenges and introduce charitable
grants to support employees’ own work in the community.
– Our APAC & Canada oces have a dedicated team of “Charity Champions”
that develop and implement a yearly plan of initiatives which include many
volunteering opportunities such as providing a food service for women who
have experienced domestic abuse and supporting their independence
and economic empowerment. Our partners also provide support with
numeracy through education and learning of young children.
Case study: People Positive
Charitable giving
andvolunteering
Below: In April 2023, CMC Markets hosted an impactful networking
event in collaboration with our charity partner, Making the Leap. The
event featured mock interviews and career guidance for 22 young
participants, who had the opportunity to engage with various CMC
Markets sta members working in the fields they aspire to pursue. This
initiative aimed to equip these young individuals with valuable insights
and practical experience to help them advance in their career journeys.
Our UK oces completed
their three-year partnership
with three charity partners
focused on social mobility
from school age to young
adults making their first steps
into the professional world.”
Sustainability continued
22
young participants took part in an
impactful networking event
People Positive continued
36 – CMC Markets plc
Annual Report and Financial Statements 2024
Left: In September 2023, we held a rae
and bake sale to raise funds for our Boycott
Your Bed event, supporting CMC’s Dream
Team as they braved the cold and slept out
in Paternoster Square.
The sleep out, supporting activities and
CMCmatched funding raised £21,037
forActionfor Children.
£21
,
037
raised for Action for Children
Right: 30 employees from our Sydney oce
took part in the Balmoral Run in aid of the Humpty
Dumpty Foundation which provides support for
sick children in hospitals. CMC was also the main
sponsor of the event.
People Positive continued
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 37
Annual Report and Financial Statements 2024
Sustainability continued
Planet Positive
Upstream activities Downstream activitiesReporting company
Purchased
electricity,
steam, heating
and cooling
for own use
Scope 2
Indirect emissions
Scope 3
Indirect emissions
Scope 1
Direct emissions
Scope 3
Indirect emissions
CO
2
CH
2
HFC SF
6
NF
3
PFCN
2
O
Company
vehicles
Employee
commuting
End-of-life
treatment of
sold products
Franchises
Useofsold
products
Processing of
sold products
Transportation
and distribution
Transportation
and distribution
Investments
Purchased goods
and services
Fuel and energy-
related activities
Leased assets
Business travel
Waste generated
in operations
Leased assets
Capital goods
Company
facilities
Throughout 2024 we continued to improve
ourunderstanding of our impacts on the
environment within the context of being an
oce-based service provider.
We have continued to improve our oce spaces throughout 2024 including
a major refurbishment of our London head oce at 133 Houndsditch and the
relocation of our main data centre to a third-party venue. In specifying these
developments, we have emphasised on the need for green credentials and
utilised data provided by BREEAM ratings, or local equivalents. The data
centre relocation and works to improve the heating and lighting in the London
oce are already delivering electrical energy savings. All our energy supplies
to our buildings where CMC has direct control over the supplier relationship
are now sourced from renewable sources with the exception of one location
where the supply is 80% renewable.
We have worked with suppliers, contractors, and partners to encourage
sustainable practices, reduce emissions, and promote responsible sourcing.
We have now adopted a risk-based approach to assessing potential suppliers
for their sustainable practices.
We continue to work with Normative to support our climate strategy and
helps us to calculate our carbon emissions. Normative uses the Greenhouse
Gas (“GHG”) Protocol and a database of emissions factors to bring scientific
accuracy to emissions accounting.
We also successfully launched electric vehicle leasing schemes in London
and Australia as a benefit to our employees.
The table below defines the three scopes of corporate emissions according
tothe GHG Protocol as adopted by CMC.
Source: Normative Emissions Calculation Methodology Version 1.1 – Jan 2023: The three scopes of corporate emissions according to the GHG Protocol.
Our FY24 emissions performance
– Scope 1 emissions at CMC only relate to the cars provided to employees
through the salary sacrifice car benefit arrangement in the UK and Australia.
These schemes only provide electric vehicles with zero emissions. As
we have no operational control of energy consumption in our buildings
emissions relating to premises are included under Scope 2.
– Scope 2 decreased from 281.2 tCO
2
e in 2023 to 168.3 tCO
2
e due to
improved data quality and reduced consumption primarily in the UK due
tothe relocation of the data centre.
– Scope 3 decreased slightly from 12,219.7 tCO
2
e in 2023 to 12,153.4
tCO
2
e in 2024.
– Emission intensity ratio decreased from 43.3 tCO
2
e/£m in 2023 to
37.0tCO
2
e/£m in 2024.
38 – CMC Markets plc
Annual Report and Financial Statements 2024
Case study: Planet Positive
Refurbishment of our
London head oce space
and the relocation of our
data centres
During FY24 CMC extended the lease for its head oce at
133 Houndsditch in the City of London until 2029. This also
included a significant refurbishment of the space to provide
a more modern environment better suited to oce-based
working in 2024. As part of the refurbishment all aspects of
sustainability were considered including upgrading all the
oce lighting to LED and improvements to the heating and air
conditioning systems. Our technology production team also
completed the relocation of the majority of our data centre from
133 Houndsditch to a specialist third-party provider. Despite
these projects only completing during the year we are already
seeing tangible net reductions in our Scope 2 energy use in the
United Kingdom.
Planet Positive
Our calculation methodology:
GHG emissions are calculated in alignment with records used to produce the
consolidated Financial Statements for the relevant accounting period. CMC’s
GHG footprint follows the operational control approach and if we operate
and control an area, the associated emissions will fall into Scope 1 & 2 and
all other emissions fall into Scope 3. Our gas consumption is categorised as
Scope 2 due to the fact we do not have operational control over the boilers in
our multi-tenanted buildings, for example, we do have a contract with the gas
supplier for our London oce and the energy is paid for though the service
fees to the landlord.
Our approach for any errors, updates or restatements involves applying
a threshold of 5%. In the event of an error or update identified in the prior
period or the baseline, we will restate our GHG emissions if the error exceeds
this threshold. Furthermore, we recognise the significance of acquisitions,
disposals, and changes withing the Group from both a size and operating
perspective. The figures below include emissions data from all our global
oces where data is available. In some cases, estimates or extrapolation
methods are used to calculate emissions where actual consumption figures
are not available.
For Scope 2 to determine the carbon impacts for the electricity use we used
emissions factors from the Association of Issuing Bodies (“AIB”). Cooling is
regional/district-specific and is otherwise covered by electricity databases.
Gas emissions are included on a net CV basis.
For Scope 3 we used emission factors from the Department of Business and
Trade (“DBT”), for fuel and energy related activities, business travel and waste
generated, coupled with the Exiobase, which is an environmentally- extended
input-output model (“EEIO”), for capital goods, purchased goods and
services, and upstream transportation.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 39
Annual Report and Financial Statements 2024
Sustainability continued
A – Scope 1/0%
B – Scope 2/1%
C – Scope 3/99%
B
C
Global energy
emissions
(tCO
2
e)
byscope
Greenhouse gas emissions by scope
Unit
Year ended
31 March 2024
Year ended
31 March 2023
Year ended
31 March 2015
(base year)
Scope 1: direct greenhouse emissions that occur from sources that are controlled or
owned by an organisation
tCO
2
e 0.0 0.0 —
kWh 0.0 0.0 —
Scope 2: indirect market-based emissions from utility companies, such as electricity,
heat, cooling and suppliers of steam
tCO
2
e 168.3 281.2 3,560.4
kWh 3,531,068.0 4,051,055.5 5,940,440.0
Scope 3 indirect value chain greenhouse gas emissions except Scope 2 categories,
upstream and downstream tCO
2
e 12,153.5 12,219.7 —
Total global emissions: sum of emissions of various gases tCO
2
e 12,321.8 12,500.9 3,560.4
kWh 3,531,068.0 4,051,055.5 5,940,440.0
Net operating income £m 332.8 288.4 143.6
Headcount number 1,175.0 1,087.0 473.0
Intensity ratio (total global emissions/net operating income) tCO
2
e/£m 37.0 43.3 24.8
Intensity ratio (total global emissions/employee) tCO
2
e/HC 10.4 11.5 7.5
Renewable % for electricity 95% 95% —
Global energy consumption by location in kWh
Year ended
31 March 2024
Year ended
31 March 2024
(%)
Year ended
31 March 2023
Year ended
31 March 2023
(%)
UK 2,990,245.0 85% 3,406,794.0 86%
Rest of the World 540,823.0 15% 644,261.5 14%
Total 3,531,068.0 100% 4,051,055.5 100%
Global energy emissions by location in tCOe
Year ended
31 March 2024
Year ended
31 March 2024
(%)
Year ended
31 March 2023
Year ended
31 March 2023 (%)
UK 4,714.9 38% 4,901.6 36%
Rest of the World 7,606.9 62% 7,599.3 64%
Total 12,321.8 100% 12,500.9 100%
40 – CMC Markets plc
Annual Report and Financial Statements 2024
Group non-financial information and sustainability statement
Set out below is the information required by Sections 414CA and 414CB of the Companies Act 2006 (the “Act”) necessary for an understanding
of the Group’s development, performance and position in relation to the matters set out in the table below. Group policies can also be found at
www.cmcmarkets.com/group/about-us/governance/policies-and-documents.
Reporting requirement Group policies and statements Commentary, outcomes and KPIs
Environmental matters
Our Tomorrow and Climate-Related Financial
Disclosures section pages 32 to 51
Employees
– Equal Opportunity Policy
– Anti-Harassment and Bullying Policy
– Diversity and Inclusion Statement and Policy
– Board Diversity Policy
– Group Health and Safety Policy
– Group Grievance Procedure
– Whistleblowing Policy
Our Tomorrow section pages 32 to 39
Nomination Committee section pages 90 to 93
Social matters
– Equal Opportunity Policy
– Accessibility Statement
– Diversity and Inclusion Statement and Policy
– Board Diversity Policy
Our Tomorrow section pages 32 to 39
Nomination Committee section pages 90 to 93
Human rights
– Group Anti-Slavery Policy
– Modern Slavery Statement
Our Tomorrow section pages 32 to 39
Nomination Committee section pages 90 to 93
Anti-corruption and
anti-bribery matters
– Group Anti-Bribery and Corruption Policy
– Group AML Policy
– Group Financial Sanctions Policy
– Group Politically Exposed Persons Policy
Principal risks section pages 61 to 68
Principal risks
Principal risks section pages 61 to 68
Business model
Our business model section pages 12 and 13
Non-financial key
performance indicators
Key performance indicators section pages20 to 22
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 41
Annual Report and Financial Statements 2024
CMC acknowledges the systemic challenges posed by
the climate crisis to business and society. We also know
that we have a role to play in mitigating our own impacts
on the climate whilst ensuring the resilience of its
business. CMC reported against the recommendations
of the TCFD for the first time in its 2022 Annual Report
and Financial Statements and built on that with the launch
of the “Our Tomorrow” strategy in 2023.
In 2024 we have consolidated our approach to
delivering sustainability at CMC, rationalising the
governance structure to ensure delivery is embedded
in the relevant functions and the Executives are closely
involved to a level that reflects the nature and size of
the business.
In accordance with Listing Rule 9.8.6 R, the
climate-related financial disclosures are consistent with
8 out of 11 of the TCFD recommended disclosures.
Where we are not yet compliant (recommendations
9 and 11 relating to metrics and targets and 4 relating
to climate strategy), we explain our position and
forward-looking plan in the relevant sections. Our TCFD
disclosures are also in accordance with the climate-
related financial disclosure requirements contained in
section 414CB of the Companies Act 2006 (referred
to as ‘UK CFD’) We will continue to refine our approach
to build resilience against the potential physical and
transition risks of climate change whilst also identifying
ways to reduce the Group’s impacts on the planet. We
have not applied requirements g & h of the UK CFD this
year due to the lack of availability of suitable Metrics
and Targets (See section on Page 48).
Task Force on
Climate-Related
Financial Disclosures
(“TCFD”)
TCFD
Governance
The Board oversees the Group’s Our Tomorrow sustainability strategy, which
encompasses oversight of the risks and opportunities of the climate crisis.
TheBoard receives updates on the Our Tomorrow strategy at least three
times each year and approves relevant KPIs and targets, including those
related to climate change.
In 2024 the Board considered sustainability matters at five meetings, receiving
updates on the Group’s progress to implement its sustainability strategy
and establish the Sustainability Committee and discussing or approving the
KPIs against which progress of the strategy will be measured and reported.
Specific climate risk and opportunity metrics and targets have not been
established.
Following a review of the structure of the business the opportunity was
takento review the governance and delivery approach underpinning the
“OurTomorrow” strategy. As a result, the newly appointed Chief Financial
Ocer now has overall responsibility for sustainability. The Group Head
of HR will chair the Sustainability Committee for which climate-related risk
management is a key component.
The Sustainability Committee reports up to the Board at least three times
annually in accordance with its terms of reference. The Sustainability Committee
includes three Board members, the Chief Financial Ocer, the Deputy CEO
and the Head of Asia Pacific & Canada, who represent the Board’s position
on climate-related topics and in turn act as advocates for the priorities of the
Committee at the Board level. In addition, key senior managers sit on the
Committee including the Group Head of HR, whose responsibility not only
includes our people agenda but also covers our facilities footprint, and the
Head of Technology Development, who is also responsible for procurement.
A key focus for the sub-committee during FY25 is to consider risk metrics and
targets , the potential impact of chronic climate-related risks on the business
and to develop plans to transition CMC to a lower carbon business in line with
the UK’s Net Zero 2050 target.
The Committee not only provides a process through which climate-related
matters are governed but also a forum through which senior management is
able to debate climate-related change that will impact CMC in the medium and
long term. It will also oversee the review and updating of the climate-related
risk register and scenario analysis which will happen at least every three years
or earlier if there is a fundamental change in the nature, strategy or physical
footprint of the Group. To provide subject matter expertise and input to the
assessment of future climate and sustainability centred risks the Committee
is supported by retained consultants who are considered subject matter
experts in the field.
Given the business had made no material changes to its strategy and
geographic footprint in FY24 no changes were considered necessary to
the climate risk assessment exercise completed in FY23. A full review of the
assessment will be undertaken in FY25.
The Board and relevant Committees consider climate-related issues when
considering its decisions and guiding major plans of action that could aect
our climate impact aspirations in the Our Tomorrow sustainability strategy.
Italso considers the risks and opportunities that climate change impacts
haveon its operations.
42 – CMC Markets plc
Annual Report and Financial Statements 2024
CMC’s governance of climate risks and opportunities
Management
Sustainability Committee
The Committee ensures robust governance of the OurTomorrow
strategy and provides the Board with updates on sustainability
considerations and developments focused onthe alignment to
regulatory requirements, and managing risk including identifying
climate-related risks and opportunities andoverseeing the
mitigation of and resilience to those risks.
The Board
Provides oversight of the Group’s Our Tomorrow sustainability
strategy, which encompasses monitoring KPIs and targets
for climate-related risks and opportunities and approving the
contents of this TCFD statement.
Group Audit Committee
The Committee ensures an independent review of reporting on
climate change risks within this TCFD statement as part of its
consideration of the Annual Report and Financial Statements.
Group Risk Committee
The Committee receives reports from the Executives on the
principal risks to the business and reviews the TCFD statement
in order to make a recommendation on its approval to the Board.
Nomination Committee
The Committee considers the balance of skills on the Board
and ensures that any gaps are identified and considered when
new Board members are appointed and when any training needs
for existing Non-Executive Directors are discussed. This will
include consideration of the knowledge required by the Board in
relation to sustainability matters.
Remuneration Committee
The Committee considers the performance of the Executive
Directors against performance objectives which are linked to
remuneration packages. including a sustainability objective.
Please see the Group governance structure diagram
on page 79.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 43
Annual Report and Financial Statements 2024
Risk management
On pages 46 to 49 in our summarised risk register, we provide further detail on
how we manage each identified risk.
Risk identification and assessment
In 2023 the Group conducted a review of our register of identified climate
risks and the Group’s approach to climate risk assessment. This review
was conducted at a Group level. The review was supported by external
consultants from Ever Sustainable, and the exercise included:
– research to enhance existing intelligence on industry and
geographicalconsiderations;
– mapping climate risks to our identified principal risks to better understand
the interplay with our core business risks; and
– conducting internal interviews with stakeholders from departments and
subsidiaries acrossthe business.
Additionally, we defined time horizons to assess climate-related risks and
identified potential metrics to support the monitoring of risks in accordance
withthe TCFD’s guidance on cross-sector metrics. We undertook this
exercise in order to:
– enhance our understanding of the climate risks facing our business;
– determine whether any changes to the materiality of identified risks
had occurred;
– uncover whether new climate-related risks had been identified;
– devise stronger monitoring capabilities for the identified risks;
– review and enhance our approach to integrating climate-related risks
intothe Group’s enterprise risk management systems; and
– enhance our understanding of the key risks to be assessed in climate
scenario analysis.
The risk review led to several changes to our climate risk assessment
methodology. We streamlined the overarching risk identification taxonomy
used to assess CMC’s climate-related risks from four categories (physical,
transition, liability and transboundary) to two (physical and transition),
which achieves greater consistency with the climate disclosure standards
adopted by our industry. We also elected to consolidate our twelve identified
risks to nine risks, which further supports alignment to recognised climate
risks impacting our industry and improves consistency with CMC’s internal
risk language. We disclose these risks and their potential impacts on
pages 46 to 49.
Given there are no material changes to the business that would impact the
risk assessment, along with no developments in the climate science, we are
comfortable that the approach is appropriate for this reporting period. We
have, however recategorised the risks to align to the UK CFD requirements.
Risk assessment and prioritisation
The risk assessment criteria align closely to the Group’s risk evaluation
matrices in order to enhance integration with the Group’s overarching risk
management systems and the judgements and estimates applied in our
Financial Statements. The likelihood assessment reflects the probability
of therisk crystallising over the assessed time period, taking into account
industry and geographical considerations. The impact assessment reflects
the potential financial losses incurred if the risk were to be realised.
We acknowledged the novelty of climate-related risks, which makes it challenging
to define precise financial impacts for the business and continue to iterate its
assessment criteria as greater understanding of financial implications at the
entity level become known. For FY24 we have continued to use the threshold
defined for a critical financial impact as greater than £5 million, which aligns
approximately to Group risk appetite as at year end.
At that time, the Group deemed that the potential impacts of climate-related
risks did not surpass this threshold and are not expected to over the next
three years, the period over which we provide a viability statement. We have
therefore determined that no action currently needs be taken to adjust our
Financial Statements and regard these disclosures to be consistent with the
information contained herein. Additionally, we have determined that climate
change will remain categorised as an emerging risk rather than a principal
risk due to the result of the current assessment which concluded that critical
thresholds are not expected to be breached.
We will continue to monitor this designation closely as we enhance the
Enterprise Risk Management (“ERM”) framework. See page 59 for more
details on emerging risks. Should climate risk assessed as no longer an
emerging risk additional resources will be allocated as required.
TCFD continued
44 – CMC Markets plc
Annual Report and Financial Statements 2024
Group risk assessment criteria
Impact
Minor Important Significant Major Critical
£0 to £50k £50k to £250k £250k to £2m £2m to £5m >£5m
Highly possible >80%
Possible 40–80%
Unlikely 20–40%
Remote 10–20%
Very remote <10%
Very high
High
Medium
Low
Very low
Likelihood
Strategy
The Group identified and assessed climate risks and opportunities to
understand their potential impact on dierent areas of our business and the
Group’s strategy over the short, medium and long term. These time horizons
align with our business and financial planning timelines, including our viability
assessment period as noted above, as well as the timelines defined by others
in our industry. These time horizons are defined as short term (2024–2025),
medium term (2026–2035) and long term (2036+).
Dierent areas of the business including HR, facilities, technology, procurement,
finance and operations were all considered as part of the risk assessment
process. Our assessment of the potential consequences to dierent business
units is captured through our mapping of each climate risk to the Group’s
principal risks. Over the short, medium and long term, the Group’s technology
department represents the portion of the business with the greatest exposure to
both physical and transition risks. The Group’s HR and facilities departments
are limited in their exposure in the short term, although in the medium to long
term, physical risk exposure is likely to increase.
Additionally, the Group monitors variations in the potential climate risks across
the geographic locations of the Group’s operations and markets, including
the UK, Europe, and APAC & Canada. The Group has determined that its
exposure to physical risk is most critical in the APAC & Canada region over the
medium and long term. We will continue to monitor our exposure carefully and
consider more granular assessment of our business units and geographical
exposure as appropriate. The results of our assessment of the potential
impact and likelihood of our identified climate risks across three climate
scenarios are disclosed in the tables on pages 50 and 51.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 45
Annual Report and Financial Statements 2024
TCFD continued
Strategy continued
Summary of CMC’s climate risk and opportunity register
Physical risks – Acute - Floods and storms
Risk/opportunity description: the risk of floods, storms, and other extreme weather events causing damage to premises/other physical assets
and/or wider infrastructure on which we are reliant and disrupting operations. Time horizon - long term.
Mapping to principal risks
– Business continuity and disaster recovery risk
– Information technology and infrastructure risk
– Procurement and outsourcing risk
Potential financial impacts
– Revenue losses linked to outages or loss of technical services that
aectclient relationships and trust in CMC’s platforms and products.
– Increased costs through damage repair, asset replacement or data
service provision if providers are forced to invest more in adaptation and
resilience measures.
CMC’s response: we will continue to monitor the exposure of its assets and geographies to extreme weather events. As new facilities and data
service providers are introduced to the business, climate considerations will be increasingly embedded into decision-making processes.
Physical risks – Acute - Heatwaves
Risk/opportunity description: the risk of extreme heat disrupting operations through damage to premises/other physical assets and/or wider
infrastructure on which we are reliant, or aecting the physical safety and security of our people. Time horizon - medium to long term.
Mapping to principal risks
– Business continuity and disaster recovery risk
– Information technology and infrastructure risk
– People risk
– Procurement and outsourcing risk
Potential financial impacts
– Revenue losses linked to outages or loss of technical services that
aectclient relationships and trust in our platforms and products.
– Increased costs for energy (including outsourced services) to
keep key equipment and premises cool and employee absences or
productivity losses.
CMC’s response: the Group will continue to monitor the exposure of its assets and geographies to heat stress. In particular, we will look to embed
consideration of the exposure of our digital infrastructure and location of data centres as we make procurement decisions in the medium to long term.
Transition risks – Technology - Energy price and supply
Risk/opportunity description: the risk of rising energy prices and unstable energy supplies increasing our costs and disrupting our services.
Time horizon - short to medium term.
Mapping to principal risks
– Information technology and infrastructure risk
– Procurement and outsourcing risk
Potential financial impacts
– Revenue losses linked to disruption to energy supply could result in the
loss of technical services aecting client relationships and trust in CMC’s
platforms and products.
– Increased costs for running business operations and outsourced
data services.
CMC’s response: the business continuity team held an incident response exercise to prepare for a real-life major incident, in response to the energy
crisis. These learnings will inform our ongoing approach to preparing for potential energy insecurity.
46 – CMC Markets plc
Annual Report and Financial Statements 2024
Transition risks – Policy - Regulatory and compliance
Risk/opportunity description: the risk that climate-related policy may aect business expansion, current product or service oerings and
business operations. Time horizon - short to long term.
Mapping to principal risks
– Preparedness for regulatory change
– Regulatory and compliance risk
– Tax and financial reporting
Potential financial impacts
Increased costs and/or reduced revenues through:
– additional resources to meet new regulatory requirements or disclosures;
– fines in the event of non-compliance;
– restrictions to product oerings; and
– taxes to fund national climate policies.
CMC’s response: we continue to monitor the evolving regulatory environment closely.
Transition risks – Legal and Reputational -
Reputational damage
Risk/opportunity description: the risk that stakeholders perceive that our response to climate change is insucient or inaccurate, leading to
reputational damage. Time horizon - short to medium term.
Mapping to principal risks
– Reputational risk
– People risk
– Procurement and outsourcing risk
Potential financial impacts
– Decreasing revenues as customers leave for more climate-friendly
competitors.
– Increased costs and/or reduced access to capital through damaged
relationships with investors and banks.
– Increased costs through heightened employee recruitment and
retention challenges.
CMC’s response: through the Our Tomorrow sustainability strategy, we are increasing our engagement with key stakeholders to better understand
their priorities and ensure we are addressing any concerns.
Transition risks – Market
Risk/opportunity description: the risk that product/service oerings don’t align with evolving customer preferences or that climate-related
factors negatively aect the value of assets on our platform, impacting revenues and profits. Time horizon - short to medium term.
Mapping to principal risks
– Strategic/business model risk
Potential financial impacts
– Reduced revenues and profitability linked to declining customer
demand for products and services.
– Increased costs of R&D into products or services that support the low
carbon transition.
CMC’s response: ongoing diversification of our product oering and client base helps to de-risk our exposure. The Group is investing in the
integration of ESG considerations into its products and platforms to ensure our oering is aligned with the trajectory of consumer demand.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 47
Annual Report and Financial Statements 2024
TCFD continued
Transition risks – Legal and Reputational - Litigation
Risk/opportunity description: the risk that a perceived failure on behalf of the Group to consider, mitigate or adapt to the risks associated with
climate change results in litigation. Time horizon - medium term.
Mapping to principal risks
– Legal risk
– Reputational risk
Potential financial impacts
– Increased costs through legal fees and settlements to cover the costs
oflitigation.
– Reduced revenues as reputation and brand equity are damaged.
CMC’s response: we monitor our regulatory requirements closely to ensure our exposure to litigation remains minimal.
Transition risks – Market - Investment
Risk/opportunity description: the risk that our business becomes less attractive to investors as a result of our approach to managing climate
risks or that climate risks aect the value of our investments. Time horizon - medium term.
Mapping to principal risks
– Market risk
Potential financial impacts
– Reduced capital inflows as a result of impacts on investment attractiveness.
– Reduced investment returns as climate factors impact the value
ofinvestments.
CMC’s response: the Group has a holistic strategy for addressing sustainability topics including climate change to better address the concerns of
investors and to bolster our risk management systems to account for climate risk.
Transition risks – Market - Cost of capital
Risk/opportunity description: the risk of rising costs to the business as a result of increasing borrowing rates and/or insurance premiums due to
climate-related factors. Time horizon - medium to long term.
Mapping to principal risks
– Insurance risk
Potential financial impacts
– Increased cost of borrowing aecting investment in the business and
its development.
– Rising cost of insurance premiums and/or losses resulting from
unpaid insurance claims will increase the running costs of operations.
CMC’s response: we are a low debt business and regularly engage with banking counterparties to understand their expectations and
forward-looking plans.
Opportunities – Climate-related products and services
Risk/opportunity description: the opportunity to provide financial products that help our client base to invest in the energy transition and
climate-friendly investments.
Mapping to principal risks
– Reputational risk
– Strategic/business model risk
Potential financial impacts
– Increased revenue from new clients that are attracted to the platform
due to its ESG capabilities.
CMC’s response: we have introduced ESG filters within our investment platforms that allow clients to access climate-friendly investments.
Strategy continued
Summary of CMC’s climate risk register continued
48 – CMC Markets plc
Annual Report and Financial Statements 2024
Opportunities – Enhanced stakeholder relationships
Risk/opportunity description: through proactive action on climate-related issues, we can enjoy reputational benefits with our employees,
customers and investors as leaders on climate action in the financial services sector.
Mapping to principal risks
– Reputational risk
– Strategic/business model risk
Potential financial impacts
– Enhanced access to capital through positive investor relationships.
– Increased revenue through improved productivity and innovation
through engagement with employees.
– Increased revenue from new clients attracted to the platform for its
positive climate reputation.
CMC’s response: we are taking proactive action to improve our climate-related credentials and we proactively engage with employees, investors
and other stakeholders.
Evaluating resilience with climate scenario analysis
To enhance the Group’s understanding of our exposure to identified climate risks and to assess our strategic resilience, we conducted a climate scenario analysis
exercise facilitated by external consultants for three distinct scenarios. The parameters used to define the scenarios are summarised in the table.
Parameter Selection Rationale
Scenario source Network for Greening the Financial System (“NGFS”)
Climate Scenarios for central banks and supervisors
(Phase III) 2022
– The NGFS has the most comprehensive coverage of
risks and opportunities for the financial sector.
– It brings together the complex dynamics of the energy,
economy and climate systems – including a strong
focus on policy and technology variables – and so has
strong alignment with CMC’s driving forces.
– Phase III scenarios were published in late 2022 and take
account of the latest trends, data and developments.
Base scenarios 1.5C – Net Zero 2050 Scenario (“NZ”) – transition risk – The NZ Scenario is the most ambitious scenario and
closely aligned with the Paris Agreement.
1.6C – Delayed Transition Scenario (“DTS”) – transition risk – DTS provides a middle ground to test higher transition
and physical risks than NZ.
3C+ – Current Policies (“CP”) – physical risk – CP is the least ambitious scenario, assuming warming in
line with current policy measures, giving a sense of what
“business as usual” would mean for CMC.
Timeframe Short term: 2024–2025
Medium term: 2026–2035
Long term: 2036–2050
– The world needs to halve emissions by 2030 in order
to reach net zero by 2050 and therefore limit the global
rise in temperature by 1.5C above pre-industrial
levels by 2100.
Geographies Global with basic focus on Australasia and Europe/UK
as benchmark markets
– As this was the first time the Group has conducted a
rigorous scenario analysis exercise, the focus has been
kept broad to identify significant areas of risk and inform
whether more tailored geographical focus is necessary
moving forward.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 49
Annual Report and Financial Statements 2024
Delayed Transition
Key characteristics
– Temperature: below 2°C
– GDP: -2% by 2030 and -6% by 2050
– Risk level: higher physical and transition risks over the medium
and long term
– Policy implementation level: delayed until 2030, then sudden, with
high regional variation
Strategic impact
We would expect to increase our need for liquidity in the medium term for
our institutional businesses in anticipation of customers sitting on cash to
ride out a period of market volatility and uncertainty. Our trading business
would likely benefit from increased volatility in the marketplace.
Risk category Risk Short Medium Long
Physical risk
Floods and storms
Heatwaves
Transitional risk
Technology risk (energy)
Regulatory and compliance risk
Reputation risk
Market risk
Litigation risk
Investment risk
Cost of capital risk
TCFD continued
Net Zero 2050
Key characteristics
– Temperature: below 2°C
– GDP: -3% by 2030 and -4% by 2050
– Risk level: physical risks are relatively low, but transition risks
are higher
– Policy implementation level: immediate and stringent but orderly
with low regional variation
Strategic impact
Considering higher carbon prices, clients in the APAC & Canada region
may reduce trading on our investment platform as the economy adjusts
given the region’s emphasis on heavy industry. High inflation may also lead
to increased sta overheads, and high interest rates may initially reduce
trading activities if cash is preferred as a more stable alternative to markets
initially. Initial periods of high volatility and market instability would likely have
a positive impact on the Group’s trading business.
Risk category Risk Short Medium Long
Physical risk
Floods and storms
Heatwaves
Transitional risk
Technology risk (energy)
Regulatory and compliance risk
Reputation risk
Market risk
Litigation risk
Investment risk
Cost of capital risk
Strategy continued
Evaluating resilience with climate scenario analysis continued
These dimensions were mapped in 2023 to our climate risk register to help
focus the content of the scenarios to risks with higher ongoing risk ratings;
however, the focus of this exercise was kept broad to encompass the full
register of risks. Given there have been no significant changes to our locations
and products we are comfortable the mapping remains accurate.
In doing so, we aimed to further enhance our understanding of the identified
risks. Using the revised climate risk assessment criteria and as part of the
climate scenario exercise, we assessed each of our identified climate risks
across the short, medium and long term for each of the assessed scenarios,
as shown in the tables below.
50 – CMC Markets plc
Annual Report and Financial Statements 2024
Current Policies
Key characteristics
– Temperature: +3°C
– GDP: -3% by 2030 and -8% by 2050 (up to -20% by 2100)
– Risk level: substantial physical risks over the medium and long term
– Policy implementation level: low; assumes that only currently
implemented policies are preserved
Strategic impact
Short-term impact is likely to be limited. As physical climate stress
increases in the medium and longer term, the Group’s technology
infrastructure could be increasingly exposed to heat-related stress in
particular. The Australian market would likely be exposed as dampening
GDP prospects decrease the appeal of the Group’s investing platform.
Risk category Risk Short Medium Long
Physical risk
Floods and storms
Heatwaves
Transitional risk
Technology risk (energy)
Regulatory and compliance risk
Reputation risk
Market risk
Litigation risk
Investment risk
Cost of capital risk
A workshop was held comprised of the TCFD working group, a cross-functional
group of individuals representing senior team members. Each scenario was
presented and interrogated to assess the potential impacts on the Group’s
strategic resilience. Based on the resulting risk heat map, additional exercises
were devised for each of the three scenarios and tailored to the time periods
where our climate risk exposure was greatest for each scenario.
The Group’s trading business is unlikely to be negatively impacted and may
in fact benefit from periods of volatility across the dierent scenarios. The
investing platform may experience more duress if sluggish markets and real
economy growth translate into less disposable income among our client base
in geographies that are hit harder by physical and transition risks. APAC & Canada
has been identified as the region most likely to be impacted, according to
our desktop assessment of core geographies, and future scenario analysis
exercises will be tailored to this region to explore how these challenges may
unfold. Diversification of geographical exposure and client base was identified
as the fundamental mitigating action that can be taken to increase climate
resilience, a strategy already in place. Overall, we believe our strategy remains
resilient in all three scenarios, with impacts likely to be negligible.
Metrics and targets
We have made progress to improve our data capabilities when it comes to
climate change and its impact on the environment. This year, we began to
define our Scope 3 emissions working towards setting net zero goals and
will be reviewing our options to align with the Science Based Targets initiative
(“SBTi”) in 2024. Our first step to setting goals has been to obtain a better
understanding of the Group’s carbon profile. Information on our Scope 1, 2 and
3 data definition, our carbon accounting methodology and current carbon
profile can be found on page 40.
While we have made progress this year in assessing our climate risks through
the updates to our climate risk register and scenario analysis, we are not yet
ready to disclose metrics and targets related to these risks. We are quickly
progressing our understanding of the nature of these risks and their potential
impacts to our business; however, this process remains ongoing. Our focus
over FY25 is to improve the processes in place to collect data and so provide
ameaningful basis for setting targets aligned to the level of risk this poses to
our business.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 51
Annual Report and Financial Statements 2024
Driving eciencies
by leveraging our
scale to deliver
growth and margin
expansion
Financial review
The significant investment made across our
platforms over recent years, along with our
institutional first approach and focus on high
value retail clients, has resulted in strong
financial performance across our businesses.
Having reached the peak of our investment
cycle, our cost eciency programme and
continued robust levels of growth will support an
expansion in profit margins in the years ahead.
I am delighted to announce
another year of strong financial
performance for CMC Markets.
Our net operating income has
reached a record level for the
Group, excluding the exceptional
circumstances of the COVID-19
aected 2021, and this
achievement is a testament to
thededication and hard work
ofour team, as well as the
successful execution of our
strategic vision, which continue
todrive our progress. We are
veryenthusiastic about the
futureprospects of our
businessas we go into 2025.”
Albert Soleiman
Chief Financial Ocer
52 – CMC Markets plc
Annual Report and Financial Statements 2024
Summary
Net operating income of £332.8 million increased by £44.4 million (15%) compared to 2023. This performance was driven by a strong performance in our trading
business in H2, and a 152% increase in interest income, largely as a result of higher global interest rates on client and own cash balances.
Adjusted operating expenses, including variable remuneration, of £267.2 million increased by £33.3 million (14%), primarily due to higher sta costs and an
impairment of £12.3 million mainly relating to internally developed platforms for the UK Invest and cash equities oerings. Adjusted operating expenses is an
alternative performance measure that includes impairment of intangible assets, a reconciliation to the primary statements is provided on page 180.
This resulted in a statutory profit before tax of £63.3 million (2023: £52.2 million) and PBT margin of 19.0%, up from 18.1% in the prior year.
Summary income statement
2024
£m
2023
£m
Change
£m
Change
%
Net operating income 332.8 288.4 44.4 15%
Adjusted operating expenses (267.2) (233.9) (33.3) (14%)
Operating profit 65.6 54.5 11.1 20%
Loss on share of associates (0.3) — (0.3) —
Finance costs (2.0) (2.3) 0.3 16%
Profit before taxation 63.3 52.2 11.1 21%
PBT margin
1
19.0% 18.1% 0.9%pts —
Profit after tax 46.9 41.4 5.5 13%
2024
Pence
2023
Pence
Change
Pence
Change
%
Basic EPS 16.7 14.7 2.0 14%
Ordinary dividend per share
2
8.3 7.4 0.9 12%
Net operating income overview
2024
£m
2023
£m
Change
%
Trading net revenue 259.1 233.1 11%
Investing net revenue (excl. interest income) 34.0 37.9 (10%)
Net revenue
1
293.1 271.0 8%
Interest income 35.0 13.9 152%
Other operating income 4.7 3.5 34%
Net operating income 332.8 288.4 15%
1 CFD and spread bet revenue net of rebates and levies, and stockbroking revenue net of rebates.
The components of the presentation above are alternative performance measures, a reconciliation to the primary statements is provided on page 180.
1 Statutory profit before tax as a percentage of net operating income.
2 Ordinary dividends paid/proposed relating to the financial year, based on issued share capital as at 31 March of each financial year.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 53
Annual Report and Financial Statements 2024
Trading performance overview
2024
£m
2023
£m
Change
%
Trading net revenue (£m) 259.1 233.1 11%
Trading revenue per active client (£) £4,685 £3,968 18%
Trading net revenue increased by £26.0 million, representing an 11% increase against the prior year due to a strong second half performance, driving an increase
in revenue per active client of £717 (18%) to £4,685. Revenue per active client was a record high level, reflecting the growing proportion of trading volumes
generated by high-value, institutional clients.
Investing performance overview
2024 2023 Change %
Net
revenue
£m
Active
clients
1
Net
revenue
£m
Active
clients
1
Net
revenue
£m
Active
clients
B2C 24.4 168,760 14.6 125,326 67% 35%
B2B 9.6 42,816 23.3 92,984 (59%) (54%)
Total 34.0 211,576 37.9 218,310 (10%) (3%)
1 ANZ customers are classified as B2B prior to integration in March 2023. Post-integration, they are managed as CMC Retail customers and classified as B2C.
Investing net revenue was 10% lower at £34.0 million (FY23: £37.9 million), primarily driven by a £2.9 million unfavourable FX movement from a weaker
Australian dollar. Underlying performance on a constant currency basis was 3% lower than the prior year, as weaker domestic trading was largely oset by
stronger international trading and the introduction of cash crypto trading for retail customers, with the second half of the year seeing stronger trading activities,
particularly in Q4.
Interest income
Interest income increased by £21.1 million, representing a 152% increase, to £35.0 million driven by elevated base rates and higher cash balances for both own
funds and clien funds.
The majority of the Group’s interest income is earned through our segregated client deposits in our UK, Australia and New Zealand business. Our investing
business generated 31% of the Group’s interest income, with 69% being generated in our trading business. The Group continually monitors its returns on both
own and segregated client deposits to ensure optimal returns.
Expenses
Total costs increased by £33.3 million (14%) to £269.5 million.
2024
£m
2023
£m
Change
%
Net staff costs – fixed (excluding variable remuneration) 100.8 84.9 (19%)
IT costs 39.7 33.7 (18%)
Marketing costs 31.1 32.3 4%
Sales-related costs 4.5 6.0 25%
Premises costs 6.7 5.7 (17%)
Legal and professional fees 13.9 8.6 (62%)
Regulatory fees 4.3 9.4 54%
Depreciation and amortisation¹ 27.4 15.6 (75%)
Irrecoverable sales tax 5.5 3.0 (97%)
Other 15.6 18.0 14%
Adjusted operating expenses excluding variable remuneration 249.5 217. 2 (15%)
Variable remuneration 17.7 16.7 (6%)
Adjusted operating expenses including variable remuneration 267.2 233.9 (14%)
Loss on share of associates 0.3 — —
Interest 2.0 2.3 16%
Total costs 269.5 236.2 (14%)
1 Including impairment of intangible assets
Financial review continued
54 – CMC Markets plc
Annual Report and Financial Statements 2024
Net sta costs
Net sta costs, including variable remuneration, increased £16.9 million (17%) to £118.5 million. This was driven by the annualisation of higher headcount levels for
much of the year, along with increases in gross pay within certain areas of the business to ensure the Group continues to remunerate sta in line with market rates
to assist talent retention within the organisation, as well as the higher termination benefits resulting from the reduction in global headcount.
Variable remuneration increased in light of the strong financial performance in the year.
2024
£m
2023
£m
Change
%
Gross staff costs, excluding variable remuneration 110.7 92.9 (19%)
Performance-related pay 14.9 14.5 (3%)
Share-based payments 2.8 2.2 (24%)
Total employee costs 128.4 109.6 (17%)
Contract staff costs 1.7 3.1 45%
Net capitalisation (11.6) (11.1) 5%
Net staff costs 118.5 101.6 (17%)
Depreciation and amortisation costs
Depreciation and amortisation have increased by £11.8 million (75%) to £27.4 million, primarily due to the impairment of internally developed trading platforms for
the UK Invest platform and cash equities oerings.
Sales-related costs
Sales-related costs decreased by £1.5 million (25%) to £4.5 million driven by lower transactional costs in Invest Australia as a result of the lower volumes traded by
clients, and lower levels of promotional and compensation payments.
Marketing costs
Marketing costs reduced to £31.1 million, down 4%, reflective of the more targeted approach we have taken with regard to marketing spend in the last year as we
have focused our attention on product development and expansion across our platforms.
IT costs
IT costs increased by £6.0 million (18%) to £39.7 million, primarily as a result of our expanded product oering, higher software costs and an increase in market
data costs. Inflationary pressures in light of the wider global environment also contributed significantly to these cost increases.
Legal & Professional fees
Legal and professional fees increased by £5.3 million (62%), primarily driven by an increase in project related consultancy fees, along with smaller increases in
legal and audit fees.
Regulatory fees
Regulatory fees decreased by £5.1 million (54%) primarily as a result of a lower FSCS levy.
Premises costs
Premises costs increased £1.0 million (17%) due to higher utility costs, service charges and additional rent costs driven by the new oce in Dubai, partially oset by
lower rates.
Irrecoverable Sales Tax
Irrecoverable sales tax increased by £2.5 million (97%) mainly due to a non-recurring VAT refund received in the prior year.
Other expenses
Other expenses decreased by £2.4 million (14%) mainly due to lower recruitment fees as a result of the high level of new hires in the prior year.
Taxation
The eective tax rate for 2024 was 26.0%, up from the 2023 eective tax rate, which was 20.6%. This increase in the eective tax rate was mainly due to the
increase in the UK corporate tax rate.
Profit after tax for the year
The increase in profit after tax for the year of £5.5 million (13%) was due to higher levels of net operating income being partially oset by an increase in expenses,
including the one-o impairment charge and non-recurring costs relating to the global headcount reduction.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 55
Annual Report and Financial Statements 2024
Dividend
Dividends of £13.7 million were paid during the year (2023: £35.0 million), with
£10.9 million relating to a final dividend for the prior year paid in August 2023,
and £2.8 million relating to an interim dividend paid in January 2024 relating to
current year performance. The Group has proposed a final ordinary dividend
of 7.30 pence per share (2023: 3.90 pence per share).
Non-statutory summary Group balance sheet
2024
£m
2023
£m
Intangible assets 28.9 35.3
Property, plant and equipment 15.3 14.1
Net lease liability (3.0) (2.7)
Fixed assets 41.2 46.7
Cash and cash equivalents 160.3 146.2
Net amounts due from brokers 221.9 179.2
Financial investments 50.9 30.6
Other assets 12.3 2.0
Net derivative financial instruments — 1.1
Title transfer funds (119.6) (49.4)
Own funds 325.8 309.7
Working capital 31.4 8.2
Net tax receivable / (payable) (0.2) 8.6
Investment in associates 2.4 —
Deferred tax net asset 2.9 0.8
Net assets 403.5 374.0
The table above is a non-statutory view of the Group Balance Sheet and line names do not necessarily
have their statutory meanings. For the relevant line names, a reconciliation to the primary statements can
be found on page 180 in the 2024 Annual Report and Financial Statements.
Fixed assets
Intangible assets decreased by £6.4 million to £28.9 million (2023: £35.3 million)
which is predominantly a result of the impairment charges.
Own funds
Net amounts due from brokers relate to cash held at brokers either for initial
margin or balances in excess of this for cash management purposes. The
increase in client trading exposures throughout the year, particularly in equities
and bullion, resulted in increases in holdings at brokers for hedging purposes.
Cash and cash equivalents have increased during the year primarily as a
result of an increase in non-segregated balances and operating cash inflow.
Financial investments mainly relate to UK government securities and short-
term financial investments.
Title transfer funds increased by £70.2 million, which reflects high levels of
account funding by a small population of mainly institutional clients.
Working capital
The £23.2 million increase in working capital requirements year on year is
primarily the result of movements in stockbroking receivable and payables
arising from clients trading yet to settle at the period end.
Net tax receivable
Tax moved to a broadly flat position due to the utilisation of receivables
during the year.
Deferred tax net asset
Deferred net tax assets increased to £2.9 million over the period, due to a true
up of deferred tax in the UK.
Impact of climate risk
We have assessed the impact of climate risk on our balance sheet and have
concluded that there is no material impact on the Financial Statements for the
year ended 31 March 2024.
Regulatory capital resources
The Group and its UK regulated subsidiaries fall into scope of the FCA’s
Investment Firms Prudential Regime (“IFPR”), with the Group’s German
subsidiary, CMC Markets Germany GmbH, subject to the provisions of the
Investment Firms Regulation and Directive (“IFR/IFD”).
The Group’s total capital resources increased to £340.1 million (2023: £326.8
million) with increases in retained earnings for the year being partly oset
by the proposed final dividend distribution. In accordance with the IFPR all
deferred tax assets must now be fully deducted from common equity tier 1
capital (“CET1 capital”).
At 31 March 2024 the Group had a total OFR ratio of 312%, down from 369% in
2023. This is a result of an increase in own fund requirements to £109.0 million
(2023: £88.6 million).
The following table summarises the Group’s capital adequacy position at the
year end. The Group’s approach to capital management is described in note
30 in the 2024 Annual Report and Financial Statements.
2024
£m
2023
£m
CET1 capital¹ 383.1 363.1
Less: intangibles and net deferred tax assets
2
(43.0) (36.3)
Total capital resources after relevant deductions 340.1 326.8
Own funds requirements (“OFR”)
3
109.0 88.6
Total OFR ratio (%)
4
312% 369%
1 Total audited capital resources as at the end of the financial year of £403.5 million, less proposed dividends.
2 In accordance with the IFPR, all deferred tax assets must be fully deducted from CET1 capital.
Deferredtax assets are the net of assets and liabilities shown in note 14 of the 2024 Annual Report and
Financial Statements.
3 The minimum capital requirement in accordance with MIFIDPRU 4.3.
4 The OFR ratio represents CET1 capital as a percentage of OFR.
Financial review continued
56 – CMC Markets plc
Annual Report and Financial Statements 2024
Liquidity
The Group has access to the following sources of liquidity that make up total
available liquidity:
– Own funds: The primary source of liquidity for the Group. It represents
the funds that the business has generated historically, including any
unrealised gains/losses on open hedging positions. All cash held on
behalf of segregated clients is excluded. Own funds consist mainly of cash
and cash equivalents. They also include investments in UK government
securities, short-term financial investments, amounts due from brokers
and amounts receivable/payable on the Group’s derivative financial
instruments. Formore details refer to note 30 of the 2024 Annual Report
andFinancialStatements.
– Title transfer funds (“TTFs”): This represents funds received from
professional clients and eligible counterparties (as defined in the FCA
Handbook) that are held under a title transfer collateral agreement
(“TTCA”), a means by which a professional client or eligible counterparty
may agree that full ownership of such funds is unconditionally transferred
to the Group. The Group does not require clients to sign a TTCA in order
to be treated as a professional client and as a result their funds remain
segregated. The Group considers these funds as an ancillary source
ofliquidity.
The Group also has access to a committed facility of up to £55.0 million which
is available to fund margins required to be posted at brokers to support the
trading business. The facility consists of a one-year term facility of £27.5
million (2023: £27.5 million) and a three-year term facility of £27.5 million (2023:
£27.5 million). The maximum amount of the facility available at any one time
is dependent upon the initial margin requirements at brokers and margin
received from clients. There was no drawdown on the facility as at 31 March
2024 (2023: £nil).
The Group’s use of total available liquidity resources consists of:
– Blocked cash: Amounts held for operational purposes to meet the
requirements of local regulators and exchanges, in addition to liquidity in
subsidiaries in excess of local segregated client requirements to meet
potential future client requirements.
– Initial margin requirement at broker: The total GBP equivalent initial
margin required by prime brokers to cover the Group’s hedge derivative and
cryptocurrency positions.
Own funds have increased by £16.1 million to £325.8 million (2023: £309.7 million).
2024
£m
2023
£m
Own funds 325.8 309.7
Title transfer funds 119.6 49.4
Total available liquidity 445.4 359.1
Less: blocked cash (68.5) (68.8)
Less: initial margin requirement at broker (184.7) (106.1)
Net available liquidity 192.2 184.2
Client money
Total segregated client money held by the Group for trading clients was £517.6
million at 31 March 2024 (2023: £549.4 million). Client money represents
the capacity for our clients to trade and oers an underlying indication of the
health of our client base.
Client money governance
The Group segregates all money and assets held by it on behalf of clients
excluding a small number of clients which have entered a TTCA with the firm.
This is in accordance with, applicable client money regulations in countries
in which it operates. The majority of client money requirements fall under
the Client Assets Sourcebook (“CASS”) rules of the FCA in the UK, BaFin in
Germany and ASIC in Australia. All segregated client funds are held in client
money bank accounts with major banks that meet strict internal criteria and
are held separately from the Group’s own money.
The Group has comprehensive client money processes and procedures in
place to ensure client money is identified and protected at the earliest possible
point after receipt as well as governance structures which ensure such
activities are eective in protecting client money. The Group’s governance
structure is explained further on pages 75 to 82 of the 2024 Annual Report and
Financial Statements.
Viability statement
The Directors of the Company have considered the Group’s current financial
position and future prospects and are confident that the Group will be able to
continue in operation and meet its liabilities as they fall due over the period of
the assessment. In reaching this conclusion, both the prospects and viability
considerations have been assessed.
Long-term prospects
The Group has invested significantly in recent years in product development
to deliver future revenue diversification. This investment has culminated in
strong progress being made on strategic initiatives during the year with the
release of the Invest Singapore platform, as well as cash equities and Options
products being launched on the Next Generation platform, all of which are
expected to support the growth and revenue diversification in upcoming
years along with the ongoing growth and improvement in monetisation of our
institutional oering. These releases represent the peak of this investment
cycle, with the Group taking action to reduce the cost base as announced in
February 2024 which will support profit margin expansion in the medium term.
On this basis, the Group maintains its belief that it will continue to generate
sucient cash to support operations.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 57
Annual Report and Financial Statements 2024
Viability statement continued
Long-term prospects continued
Conservative expectations of future business prospects through delivery
of the Group strategy (see pages 18 and 19 of the 2024 Annual Report and
Financial Statements) are presented to the Board through the budget process.
The annual budget process consists of a detailed bottom-up process with a
12-month outlook which involves input from all relevant functional and regional
heads. This includes a collection of resource assumptions required to deliver
the Group strategy and associated revenue impacts with consideration of
key risks. This is used in conjunction with external assumptions such as a
region-by-region review of the regulatory environment and incorporation
of any anticipated regulatory changes, revenue modelling, market volatility,
interest rates and industry growth that could materially impact the business.
The process also covers liquidity and capital planning and, in addition to
the granular budget, a three-year outlook is prepared using assumptions
on industry growth, the eects of regulatory change, revenue growth from
strategic initiatives and investment required to support growth. The budget
was reviewed and approved by the Board at the March 2024 Board meeting.
The process for ongoing review and monitoring of risks is outlined in the Risk
Management section of the 2024 Annual Report and Financial Statements
(pages 59 to 68). The Board approved budget is then used to set targets
across the Group.
The Directors concluded that three years is an appropriate period over which
to provide a viability statement as this is the longest period over which the
Board reviews the success of Group strategic projections and this timeline is
also aligned with the period over which internal stress testing occurs.
Viability
The Group performs regular stress testing scenarios. Available liquidity
and capital adequacy are central to understanding the Group’s viability and
stress scenarios, such as adverse market conditions and adverse regulatory
change, and are considered in the Group’s Internal Capital Adequacy and
Risk Assessment (“ICARA”) document, which is shared with the FCA on
request. The results of the stress testing showed that, due to the robustness
of the business, the Group would be able to withstand scenarios, including
combined scenarios across multiple principal risks, over the financial planning
period by taking management actions that have been identified within the
scenario stress tests.
The Group’s revenue, which is driven by client transaction fees and interest
income on both own and client funds, has seen increases resulting from the
monetisation of client trading activity and the annualised impact of increases
in global interest rates during the prior year, despite lower overall active
client numbers. Projections of the Group’s revenue have included revenue
benefits from new product releases over the three-year period, which will
serve to reduce risks to the Group’s viability as a result of increased revenue
diversity. In addition, conservative estimates of market volatility were assumed
for the current businesses over the three-year period. Projections also
include assumptions on interest rates that are derived from central bank rate
forecasts, where available. No significant changes to regulatory capital and
liquidity requirements have been assumed over the forecasting period.
In addition to considering the above, the Group also monitors performance
against pre-defined budget expectations and risk indicator, which provide
early warning to the Board, allowing management action to be taken where
required including the assessment of new opportunities.
The Directors have no reason to believe that the Group will not be viable over a
longer period, given existing and known future changes to relevant regulations.
Going concern
The Group satisfies its ongoing working capital requirements through its
available liquid assets. The Group’s liquid assets exclude any funds held in
segregated client money accounts. In assessing whether it is appropriate
to adopt the going concern basis in preparing the Financial Statements,
the Directors considered the resilience of the Group, taking account of its
liquidity position and cash generation, the adequacy of capital resources,
the availability of external credit facilities and the associated financial
covenants, stress testing of liquidity and capital adequacy that take into
account the principal risks faced by the business. Further details of these
principal risks and how they are mitigated and managed are documented in
the Risk Management section on page 59 of the 2024 Annual Report and
FinancialStatements.
Having given due consideration to the nature of the Group’s business, and
risks emerging or becoming more prominent, the Directors consider that the
Company and the Group are going concerns and the Financial Statements
are prepared on that basis.
Albert Soleiman
Chief Financial Ocer
20 June 2024
Financial review continued
58 – CMC Markets plc
Annual Report and Financial Statements 2024
Risk management
Our Risk Management Framework enables
a consistent approach to the identification,
mitigation and management of risks, which is
essential to achieve our strategic objectives.
The Group’s business activities naturally expose it to strategic, financial and
operational risks which are 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
it is exposed. However, eective risk management ensures that risks are
managed to an acceptable level.
To assist the Board in discharging its responsibilities, it has in place an
Enterprise Risk Management (“ERM”) framework to support identification,
mitigation and management of risk exposures in line with the Group’s risk
appetite. The Group regularly reviews the ERM framework, risk tooling
and resources to ensure they remain eective to support the achievement
of the Group’s strategic objectives and in line with market practices and
regulatoryexpectations.
There have been a number of improvements to the ERM framework during
the year including enhancements to risk monitoring and reporting, and
the consequent risk mitigation strategies. There have also been some
organisational changes, to better align our people to the needs of the Group.
The Board, through its Group Risk Committee, is ultimately responsible for
the implementation of an appropriate risk strategy and the main areas which it
encompasses are:
– identifying, evaluating and monitoring the principal and emerging risks to
which the Group is exposed;
– implementing the risk appetite of the Board in order to achieve its strategic
objectives; and
– establishing and maintaining governance, policies, systems and controls
toensure the Group is operating within the stated risk appetite.
Risk management is acknowledged to be a core responsibility of all
colleagues at CMC and the oversight of risk and controls management is
provided by Management and Board Committees as well as the Group risk
and compliance functions.
The Group’s ERM framework is designed to manage rather than eliminate
risk, in line with risk appetite, and follows the “three lines” model to ensure clear
risk ownership and accountability. Risk management and the implementation
of controls are the responsibility of the business teams which constitute the
first line. Oversight and guidance are provided primarily by the Group’s risk
and compliance functions which constitute the second line, and third line
independent assurance is provided by the Group’s internal audit function.
The Board has implemented a governance structure which is appropriate
for the operations of an online financial services group and is aligned to the
delivery of the Group’s strategic objectives and product oering. The structure
is regularly reviewed and monitored, and any changes are subject to Board
approval. Furthermore, management considers root cause analysis to drive
resilient improvements to processes and procedures and to embed good
corporate governance throughout the Group.
The Board undertakes a robust assessment of the eectiveness of its risk
management and internal controls and reviews principal risks, emerging risks
and risk appetite on at least an annual basis.
01
Board
Ultimately responsible for defining risk appetite,
risk strategy and the evaluation of the adequacy
of our risk framework. Achieved through
Boardsub-committees.
02
Executive Committees
Responsible for execution of Board’s risk strategy
including risk appetite and management of our
key risks.
03
Second line and
control functions
The second line is responsible, with support
from certain control functions, for oversight
and advice. The second line comprises the
risk management function (including financial,
liquidity and operational risk), compliance and
financial crime. Legal, finance, data privacy and
security functions are also considered to provide
control function activities within the Group.
04
First line business functions
Responsible for identification, assessment
and management of risks. Includes the design,
implementation and monitoring of suitable
controls, issue management, KRIs and risk
appetite reporting.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 59
Annual Report and Financial Statements 2024
The Group’s risk appetite is an articulation of the nature and type of risks that
the Group is willing to accept, or wants to avoid, in order to achieve its business
objectives and strategy. This process is assessed as part of the Board’s review
of the Group’s Risk Appetite Statement (“RAS”), which is a unified view of
the Group’s risk appetites and tolerances. It is important that the integrated
risk appetite remains in line with business strategy to support the Group’s
strategic objectives. Risk appetite plays a key part in the Group’s risk, capital
and liquidity management, with the setting of risk appetites being an essential
element in achieving eective risk control across the Group and achieving
positive client outcomes.
The Board has carried out an assessment of the emerging and principal
risks facing the Group, including those that would threaten its business model,
future performance, solvency, or liquidity. In FY23 we determined that climate
change was an emerging risk based on a climate risk assessment which
concluded that critical thresholds are not likely to be breached. Given the
criteria supporting that assessment have remained unchanged in FY24 we
are comfortable that climate change risk remains an emerging risk. More
information is available within the TCFD report on pages 42 to 51.
The principal risks reported here are those attracting the greatest focus, and
to which the Group has the largest exposure. The principal risks are linked to
risk appetite and key risk indicator (“KRI’’) measures for reporting. In assessing
all risks, CMC considers the reputational impacts of risks materialising and
the impacts on its clients of negative publicity, and risks to the achievement of
business objectives. The following top principal risks were considered; their
management is set out in the principal risks, and they are:
– Regulatory and compliance risk: the Group is exposed to a significant
number of dierent regulations and legislation, which continues to expand
in line with our global footprint. During the year the most significant change
was the successful implementation of the FCA Consumer Duty. Looking
forward the key changes on the horizon include the introduction of new
Digital Operational Resilience Act (“DORA”). Enhancements within our
business change governance processes mean that regulatory projects
within the Group are appropriately prioritised to ensure compliance and
ongoing process improvement. We are actively managing a number of
audit findings in our German subsidiary.
– Information and data security risk: cyber-criminal activity continues to
increase in sophistication, severity and frequency and attacks in the form
of ransomware and Distributed Denial of Service (“DDoS’’) are particularly
relevant for the Group given the online nature of the business. Dedicated
specialist in house IT security resource, strong partnerships with leading
security vendors and continued improvement in internal controls and
governance help to mitigate the risk for CMC and its clients.
– Business change risk: as we continue to grow the business and implement
strategic change, project delivery risk naturally becomes heightened.
During the year a number of projects, including the launch of a new OTC
Options product, have concluded, reducing the pressure on the business.
Prioritisation of projects and the establishment of delivery pillars with
ring-fenced resources have helped maintain dedicated resource pools
andallocations to strategic projects.
– People risk: our people are the key to delivering on our purpose and
strategy. Failure in our ability to attract and retain key talent puts at risk
our strategic delivery and slows our velocity and our ability to maintain
our high service standards. There have been organisational changes
during the year to align our resource needs to the scale and priorities of
the Group, resulting in a reduction of the global headcount. This has been
primarily achieved by merging support functions across multiple business
lines, streamlining reporting lines and automating processes. Key people
metrics continue to beclosely monitored as we still face a number of
marketheadwinds.
Further information on the structure and workings of the Board and
Management Committees is included in the Corporate governance report.
Risk management continued
60 – CMC Markets plc
Annual Report and Financial Statements 2024
Principal risks
Business and strategic risks
Strategic Risk
Key risk description
Strategic risk is the potential threat the Group
couldface that could aect its ability to perform and
execute its business strategy. It includes risks that
can result from decisions made by the Board of
Directors concerning the products or the services
theGroupprovides.
Risk exposure and appetite
CMC is exposed to, and has appetite for, strategic
risk through the definition or execution of our
strategic initiatives where there is the risk of failing to
successfully deliver what we set out to achieve.
As part of our strategic risk, CMC is exposed to
potential damage to our brand and reputation with
the market, clients and regulators. Failure to manage
reputational risks will have a significant impact on our
ability to implement our strategic plan.
During the year, enhanced focus on our key strategic
priorities has strengthened how we deliver on our
strategic goals.
Key mitigations and controls
We remain within our appetite by taking the following actions:
– Robust governance, challenge and oversight from independent Non-Executive Directors
– Ensuring significant new initiatives align to the corporate strategy
– Assessing the risks associated with strategic initiatives
– Establishing accountable owners to ensure successful delivery of initiatives and appropriate risk
mitigations are in place
– Ensuring all material products and strategic initiatives go through the product governance
process with approval by the Board
Financial risks
Market Risk
Key risk description
The risk that the value of our residual portfolio will
decrease due to changes in market risk factors. The
three standard market risk factors are price moves,
interest rates and foreign exchange rates.
Risk exposure and appetite
CMC is exposed to financial risks due to the nature
of our business as an online trading provider for
various products. We act as a principal to our clients,
predominantly across CFD and spread bet trades,
exposing us to a substantial amount of market risk and
liquidity risk.
We have appetite to retain some market risk, balanced
with low appetite for liquidity and capital risk.
Key mitigations and controls
We remain within our appetite by taking the following actions:
– Trading risk management monitors and manages the exposures it inherits from clients on a real-
time basis and in accordance with Board-approved appetite
– The Group predominantly acts as a market maker in linear, highly liquid financial instruments in
which it can easily reduce market risk exposure through its prime broker arrangements. This
significantly reduces the Group’s revenue sensitivity to individual asset classes and instruments
– Financial risk management runs stress scenarios on the residual portfolio, comprising a number
of single and combined Company-specific and market-wide events in order to assess potential
financial and capital adequacy impacts to ensure the Group can withstand severe moves in the
risk drivers to which it is exposed
– Implementation of aggregate stop loss level at global and asset class level to mitigate the impact
of extreme market shocks
– Monitoring the cost of funding requirements from a liquidity perspective where we are actively
managing market risk
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 61
Annual Report and Financial Statements 2024
Financial risks continued
Liquidity Risk
Key risk description
The risk that there is insucient liquidity available to
meet the liabilities of the Group as they fall due or can
only secure required liquidity at excessive cost.
Risk exposure and appetite
CMC is exposed to Liquidity Risk through our
principal business, in particular our payments (margin
calls) to prime brokers to eect our hedging strategies,
and when there are unfunded commitments in the
matched principal business (e.g. failed settlements) or
obligations to lodge margins with central counterparty
clearing house to cover client cash and derivative
trading obligations.
We have low appetite for liquidity risk and during the
year we have continued to develop our framework,
which includes the implementation of a revised stress
testing model.
Key mitigations and controls
We minimise our exposure to and impacts of liquidity risk by:
Principal:
– Modelling our liquidity requirements on a forward-looking basis both under normal conditions as
well as under stress conditions to ensure the Group can meet its obligations
– Maintaining adequate amounts of unencumbered, high quality liquid assets and diversified
funding sources
– Establishing a liquidity facility to draw on if needed with appropriate analysis and modelling
– Arranging contingency funding levers in certain scenarios up to and including orderly wind down
– Monitoring market conditions to ensure the liquidity impact of significant market moves aligned to
client positions is able to be met
Matched Principal and Exchange traded:
– We only oer assets that are liquid as determined by our asset suitabilityassessment
– Producing daily cash position reports that show surplus liquidity, unencumbered liquidity and
short-term forecasts
– Perform stress testing to ensure the Group has sucient liquidity to meet its ongoing business
requirements under normal conditions as well as periods of stress (forecast for 15 months)
Credit and Counterparty Risk
Key risk description
The risk of losses arising from a counterparty failing to
meet its obligations as they fall due.
Risk exposure and appetite
CMC is exposed to credit and counterparty risk from
its clients as well as from the financial institutions with
which it operates.
We have limited appetite for credit and counterparty
risk, which we manage through our mitigants
and controls.
2023 saw a banking crisis in the US with the collapse
of several regional banks. Although CMC was not
impacted by these events, credit risk exposure
management continues to be a focus, and over the
year we have made significant improvements to our
stress testing modelling.
Key mitigations and controls
We manage our exposure to credit risk by:
– Applying sucient margins, including a tiered margin structure, to manage positions that are
deemed riskier
– Utilising our liquidation feature to reduce exposure when the client total equity falls below a pre-
defined percentage of the required margin for the portfolio held
– Guaranteed stop loss orders allow clients to remove their chance of debt from their position(s)
– Setting limits and utilising our potential credit risk exposure models to stress and quantify
counterparty client credit risk exposure across CFDs and Spreadbet
– Reviewing credit worthiness of the counterparties at least annually
– Managing our exposure to concentration risk with external hedge counterparties such as PBs,
where we have at least two per asset class
– Seeking to work with counterparties that hold investment grade credit rating, setting limits and
monitoring exposures daily
– Establishing intermediary limits and monitoring them daily to report and escalate
large exposures
Principal risks continued
62 – CMC Markets plc
Annual Report and Financial Statements 2024
Insurance Risk
Key risk description
Risk of failure in insurance for risks and perils that
the insurance company has agreed to provide
indemnity for.
Risk exposure and appetite
CMC is exposed to insurance risk where we have
an insurable risk event that is either not included in
Group insurance or where the insurance provider has
justifiable reason to not pay out on the event.
We have limited appetite for insurance risk. Due to
uncertainties associated with crypto insurance that
aects the cost of insurance, the Group does not
include crypto within our insurance.
Key mitigations and controls
We mitigate our exposure by:
– Use of a reputable insurance broker which ensures cover is placed with financially
secure insurers
– Adhering to rigorous claim management procedures with our brokers
– Operating a risk-based approach to identify insurable risks across relevant departments
– Full engagement with relevant business areas regarding risk and coverage requirements and
related disclosure to brokers and insurers
Operational risks
Operational Risk is an expected consequence of normal business operations. It is not possible, or eective, to eliminate all risks that are inherent in our activities,
so we minimise our exposure to these risks through implementation of robust controls. We strive to always comply with applicable regulations and legislation.
Business Disruption and Resilience
Key risk description
Risk of inability to maintain and restore essential
functions of the business.
Risk exposure and appetite
Our extensive use of a wide range of technology,
people and third-party providers, as well as our
physical presence across the globe, exposes us to a
variety of internal and external events that can cause
business disruption. This ranges from cyber attacks
and technology failures to human errors and physical
damage to our facilities that can impact on our ability
to deliver important business services to clients.
We have low appetite for business disruption and
resilience and implement strong monitoring and
controls to ensure we continue to deliver services
to our clients. During the year we have faced both
voluntary and involuntary sta turnover which is now
stable following management action. This has been
noted as a key risk in the Risk Management Report;
ongoing process developments will further reduce
the potential impact of underlying drivers.
Key mitigations and controls
We limit our exposure to business disruption by:
– Multiple data centres and systems to ensure core business activities and processes are resilient
to individual failures
– Periodic testing of business continuity processes and disaster recovery
– Clear identification of our critical business services with defined impact tolerances for each
critical business service
– Ensuring an eective contingency plan is in place, including where we have key person
dependencies for critical business activities and functions
– Implementing a consistent and Group-wide approach to the reporting and management of
incidents, in line with our Incident Management Policy and Group Crisis Communication Manual
– Developing overarching strategies to recover from incidents and ensuring senior management is
suciently knowledgeable and prepared in case of an incident
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 63
Annual Report and Financial Statements 2024
Operational risks continued
Internal Fraud
Key risk description
The risk of fraud attempted or perpetrated by an
internal party (or parties) against our organisation, our
customers or our suppliers, including instances where
an employee is acting in collusion with external parties.
Risk exposure and appetite
CMC is exposed to internal fraud risks where
employees have access to systems and physical/
electronic assets belonging to CMC or access to
client data and assets.
We have no appetite for fraud and will take prompt
action if it does occur.
Key mitigations and controls
We minimise our exposure to internal fraud risk by:
– Establishing a stringent screening processes and background checks when on boarding new
employees as well as adhering to local screening requirements within the geographies we
operate in
– Detecting unauthorised trading through trade surveillance reports to prevent internal trade
manipulation
– Segregating payment system administration, payment creation and payment authorisation to
prevent internal payment fraud
– Prompt identification and investigation of fraud cases such that any harm done to clients can be
eectively remediated
External Fraud
Key risk description
The risk of fraud attempted or perpetrated against our
organisation or our customers, by an external party
(i.e. a party without a direct relationship to the Group)
without the involvement of an employee or aliate of
the organisation.
Risk exposure and appetite
CMC is exposed to fraudsters due to our large
online presence as a financial organisation. Our
engagement with multiple third parties also exposes
us to external fraud risk where third parties could
potentially engage in fraudulent activity.
We have no appetite for fraud and will take prompt
action if it does occur.
Key mitigations and controls
We minimise our exposure to external fraud risk by:
– Timely reporting and escalation of fraud cases to internal and external stakeholders to support
the recovery of losses
– Ensuring we only do business with suitable third parties that can operate appropriate controls
against the risk of fraud
– Prompt identification and investigation of fraud cases such that any harm done to clients can be
eectively remediated
Physical Security and Safety
Key risk description
The risk of damage or theft to the Group’s physical
assets, client assets, or public assets, for which the
Group is liable, and injury to the Group’s employees
oraliates.
Risk exposure and appetite
CMC is exposed to physical security and safety risk
in all locations where we have a physical presence,
where either our employees, physical assets, or data
assets reside.
We have low appetite for material loss or damage to any
firm or client assets, including employees or aliates.
Key mitigations and controls
We minimise our exposure to physical security and safety risks by:
– Implementing layers of security including physical access controls across our oce locations to
prohibit unauthorised access
– Implementing additional authorisation controls for buildings with more sensitive assets, such as a
two-factor security measure for access to our data centres
– Implementing health and safety assessments, including regulatory risk assessments,
occupational health assessments and fire drills
– Regular mandatory employee health and safety online training
Principal risks continued
64 – CMC Markets plc
Annual Report and Financial Statements 2024
Financial Crime
Key risk description
The risk of money laundering, terrorist financing,
sanctions violations, bribery and corruption, and
KYC failure.
Risk exposure and appetite
CMC is exposed to financial crime risk as we are
a financial institution holding and processing a
significant volume of client confidential information
including client money and client assets. We are
exposed to the risk of money laundering as we
deal with a broad range of clients and some of
ourrelationships with clients are short term.
We have low appetite for instances of Financial Crime
and implement preventative and detective controls
to mitigate any potential exposure. To ensure we
stay within our risk appetite, we are improving some
monitoring processes and investing in people and
system enhancements .
Key mitigations and controls
We mitigate our exposure to financial crime risk by:
– Establishing and maintaining risk- based Know Your Customer (“KYC”) procedures, including
Enhanced Due Diligence (“EDD”) for those customers presenting higher risk, such as Politically
Exposed Persons (“PEPs”)
– Establishing and maintaining risk-based systems for surveillance and procedures to monitor
ongoing customer activity
– Improving procedures for reporting suspicious activity internally and to the relevant law
enforcement authorities or regulators as appropriate
– Improving procedures relating to mitigation of risk derived from clients that are repeat oenders
of market abuse
– Maintaining a restricted list of individuals and legal entities for which an account should not be opened
– Risk classifying customers or entities during onboarding, allowing us to evaluate the risks
associated with each new account
– Implementing appropriate systems and controls for transaction monitoring to identify and block
transactions that breach regulatory guidelines and violate applicable sanctions laws
– Training and awareness for all employees
Information Security and Data Privacy
Key risk description
The risk of information security incidents, including
the loss, theft, misuse of or unauthorised access to
data/ information; this covers all types of data, e.g.,
client data, employee data, and the organisation’s
proprietary data, and can include the failure to comply
with rules concerning information security.
Risk exposure and appetite
CMC is exposed to information security and data
privacy risk where we hold large amounts of data
electronically and in paper form that is confidential,
highly confidential or sensitive, including personally
identifiable information (“PII”).
We have low appetite for loss or misuse of client,
employee or firm confidential information and minimise
exposure through robust preventative controls.
Key mitigations and controls
We minimise our exposure to information security and data privacy risks by:
– Only storing data that is necessary and only for the purpose that is needed
– Access controls based around least privileged access to ensure everyone can only access
information that they require
– Information classification to ensure data is accurately classified and appropriately controlled
– Physical security controls to prevent unauthorised access to buildings and sensitive area
– Implementing regular system access reviews across the business
Technology Risk
Key risk description
The risk associated with the failure or outage of
systems, including hardware, software and networks.
Risk exposure and appetite
CMC is exposed to extensive technology risk as a
result of being a fintech company.
We have low appetite for failure or outage in our
systems and minimise exposure through robust
preventative and detective controls.
Key mitigations and controls
We minimise exposure to technology risk by:
– Investing in our technology stack to ensure we provide resilient platforms that our customers can rely on
– Utilising systemic monitoring tools for identification of system downtime or performance issues
– Ensuring adequate resources are available across IT production, with coverage across regions
to monitor functionality of our systems and provide support to prevent and remediate any
system downtime
– Planning and provision of sucient system and infrastructure capacity to allow for growth or
spikes in client and market activity
– The provision of contingent capacity by the IT production team 24 hours a day, 5 days a week to
support and remediate issues
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 65
Annual Report and Financial Statements 2024
Operational risks continued
Legal Risk
Key risk description
The risk of errors in legal procedures and processes
and breaches of CMC’s legal obligations.
Risk exposure and appetite
CMC is exposed to legal risk through contracting with
clients, third parties, and employees, where we may be
exposed to legal liabilities, including litigation, resulting
from non-performance of obligations or breaches of
applicable law.
We have low appetite for failures in our legal processes
or obligations.
Key mitigations and controls
We minimise our exposure to legal risk by:
– Timely involvement of the legal and compliance departments in all strategic initiatives, new
products, andonboarding of suppliers and partners (i.e. third-party intermediaries such as
introducing brokers)
– Avoiding and appropriately handling disputes that could potentially escalate to legal disputes or
litigation cases, including the timely involvement of the legal department
– Ensuring all amendments to legal terms (including terms with clients, partners and suppliers) are
reviewed andapproved by the legal department and relevant stakeholders
Third-Party Risk
Key risk description
Risk of failure to implement eective oversight over
outsourced arrangements and other third-party
relationships.
Risk exposure and appetite
CMC is exposed to third-party risk as we contract
with external third parties for the provision of goods
and services. CMC is also exposed to third-party
outsourced providers and to internal outsourcing
arrangements where our UK entity provides
operational services to dierent legal entities.
We have low appetite for failure by our third parties.
The Group makes extensive use of intra-group
outsourcing, which is an area in which we are investing
in processes to drive consistency and clarity.
Key mitigations and controls
We maintain inventories of all third-party relationships with vendor classification that informs the
level of control and oversight required, and for our critical third parties, we will:
– Implement robust onboarding and due diligence processes for third parties with SLAs in place
for all critical outsourcing and vendor provisions
– Perform quarterly service review meetings and Ml to monitor the critical relationships with
relevant external vendors
– Perform annual due diligence on critical vendors
Where we outsource processes, we will do this in line with the outsourcing policy, We ensure that
internal outsourcing arrangements deliver on the needs of the aected legal entities through:
– Documented intra- group agreements with appropriate service level agreements
– Adequate oversight arrangements, including monitoring and reporting against service levels
People
Key risk description
The risk of breaching employment legislation,
mismanaging employee relations, and failing to
ensure a safe work environment.
Risk exposure and appetite
At CMC, we align our people plan to our business
strategy which results in expansion and contraction in
line with delivery of strategic initiatives.
Key mitigations and controls
We are proactive in limiting our exposure to people risk by:
– Recruiting and retaining the best skilled sta for the job regardless of gender, ethnicity,
religion, etc.
– Aligning our recruitment process globally where possible, whilst abiding by local market
practices, regulatory requirements and legislation
– Establishing diversity and inclusion targets within our people plan to strive towards
Principal risks continued
66 – CMC Markets plc
Annual Report and Financial Statements 2024
Transaction processing and execution
Key risk description
Failure to process, manage and execute transactions
and/or processes (such as change programme)
correctly and/ or appropriately.
Risk exposure and appetite
CMC is exposed to transaction processing and
execution risk throughout the lifecycle of our client
service provision and our hedging transactions.
Operational errors occur in the normal course of
business and it is not possible or desirable to eliminate
them all. However, we have low appetite to incur
material loss as a result of failures in our processes
and manage our exposure through robust processes
and controls.
Key mitigations and controls
We limit our exposure to transaction processing and execution risk by:
– A high degree of straight through processing
– Implementing operational process controls (manual processes and manual intervention)
suchasfour-eyed checks
– Training our people on our processes and providing procedural documentation
– Immediately rectifying any transaction processing issues as and when they do occur
– Implementing a range of reconciliation controls to ensure timely detection of errors
– Balancing the requirements of BAU activities and strategic initiatives to maintain the timely
delivery of projects
– Performing root cause analysis on any incidents for continuous improvement
Compliance with Regulation and Legislation
Key risk description
Failure to manage and comply with any legal or
regulatory obligations.
Risk exposure and appetite
The complex regulatory landscape that CMC
operates across exposes CMC to regulatory and
compliance risk.
We have no appetite for failure to meet our regulatory
and legislative obligations and always strive to comply
with applicable laws and regulation. To reflect our
growing diversified business we are investing in our
European compliance and governance structures.
In some instances remediation has been identified
and we are making appropriate investment to ensure
we maintain eective relationships and deliver on
regulatory expectations.
Key mitigations and controls
We minimise our exposure to compliance risk by:
– Taking a proportionate risk-based approach interpreting regulatory requirements by considering
the financial and legal impact of our decisions
– Ensuring adequate resources that are appropriately trained and supervised
– Performing regular horizon scanning on new regulations/ legislation, including the assessment
ofthe impact to our business
– Performing clear analysis of regulation and legislation across regions, particularly in evaluation of
new initiatives
– Eective compliance oversight and advisory/technical guidance provided to the business
– Comprehensive monitoring and surveillance programmes, policies and procedures designed
bycompliance.
– Strong regulatory relations and regulatory horizon scanning, planning and implementation
Conduct and Improper business practices
Key risk description
Failure to act in accordance with customers’ best
interests, fair market practices, and codes of conduct
to deliver good outcomes.
Risk exposure and appetite
We are exposed to conduct risk where sta do not
adhere to our Group code of conduct policy.
CMC seek to conduct our business to deliver
suitable, fair and clear outcomes for our customers
and support the integrity of the markets in which
we operate.
Key mitigations and controls
We minimise our exposure to conduct risk and improper business practices by:
– Setting standards of appropriate behaviour and business practice in our Group code of conduct
that sta must adhere to
– Monitoring the use of business systems, where permissible by law, for the detection and
prevention of crime or breaches of our code of conduct
– Implementing stringent monitoring over the outcomes of Consumer Duty, including Products and
Services, Consumer Support, Price and Value and Consumer Understanding, the standards for
which are documented in our Consumer Duty Policy and Best Execution Policy
– Establishing policies such as Whistleblowing, Anti-Harassment and Grievance Policies to
ensure all employees are treated with dignity and respect and are encouraged to raise concerns
wherever they witness unethical behaviours
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 67
Annual Report and Financial Statements 2024
Operational risks continued
Statutory Reporting and Tax
Key risk description
Risk of failing to meet statutory and regulatory
reporting and tax payments/ filing requirements.
Risk exposure and appetite
CMC is exposed to the statutory reporting and
tax laws requirements of the geographies we
operate within.
We have low appetite for failures to meet our statutory
and tax reporting requirements. We ensure that
where we have financial exposures they are fully
accounted for and disclosed in our annual report
and accounts.
Key mitigations and controls
We minimise our exposure to statutory reporting and tax risks by:
– Performing horizon scanning to establish applicable local taxation laws and accounting rules for
all the jurisdictions we operate
– Maintaining constructive relationships with regulators and tax authorities
– Establishing robust processes for accurate and transparent statutory reporting
Data Management
Key risk description
The risk of failing to appropriately manage and
maintain accurate data, as well as retaining and
disposing of data in line with our internal policy and
regulatory requirement (data includes client data,
employee data and the Group’s proprietary data).
Risk exposure and appetite
CMC is exposed to data management risk across
the data lifecycle through the creation, consumption
and recording of extensive data within our platforms,
systems and accounting ledgers.
We have low appetite of losses resulting from poor
data management.
Key mitigations and controls
We minimise our exposure to data management risks by:
– Implementing controls on market data, including pricing checks
– Ensuring that data is of sucient quality to meet business, legal and regulatory requirements by
deploying data validation techniques, such as accuracy, formatting and consistency checks, e.g.
defining what our key data is, the source and data quality characteristics
– Establishing documented procedures for the appropriate storing, management and
disposing of data
Model Risk
Key risk description
The risk of incorrect model design, improper
implementation of a correct model, or inappropriate
application of a correct model.
Risk exposure and appetite
CMC is exposed to model risks through the use
of models to facilitate our financial risk processes,
including liquidity projections, stress testing and
capital calculations. Models are also used in our
platforms to calculate prices and spreads.
We seek to minimise errors resulting from models by
implementing strong governance over model design
and change.
Key mitigations and controls
We minimise our exposure to model risk by:
– Maintaining a model inventory for all models that captures model limitations, model lifecycle, key
stakeholders, model classification (tiering based on complexity), and validation mark
– Validating tier 1 risk models at least annually to evaluate their conceptual soundness and quality
of outputs. The validation report is then reviewed by either the Executive Risk Committee or the
entity board of directors
– Assessing our model risk as part of the yearly risk identification and assessment (“RIA:’) as
required by the model risk policy
Principal risks continued
68 – CMC Markets plc
Annual Report and Financial Statements 2024
Governance
70 Chairman’s governance overview
72 Board of Directors
75 Corporate governance
83 Group Audit Committee report
87 Group Risk Committee report
90 Nomination Committee report
94 Remuneration Committee report
115 Directors’ report
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 69
Annual Report and Financial Statements 2024
Chairman’s governance
overview
The Board has remained
focused on delivery of the
Group’s strategy and long-term
sustainable success
During the year, the Board
has continued to review its
own composition to ensure
it remains appropriate to
oversee the delivery of the
Group’s strategy.”
James Richards
Chairman
Dear shareholder,
On behalf of the Board, I am pleased to present the Group’s Governance
report for the year ended 31 March 2024.
In my Chairman’s statement on page 8, I refer to some of the key strategic
decisions and challenges for the Group during the year. In an uncertain
economic and geopolitical environment, the Board has remained focused
on delivery of the Group’s strategy and long-term sustainable success and in
ensuring value for our shareholders and stakeholders. The Board continues
to recognise that eective governance is key to the Group’s success and
our governance framework enables decisions to be taken which are most
appropriate for the business. During the year the Board has overseen,
supported and challenged management to execute our strategy for the
benefit of all our stakeholders.
During the year the Group continued to enhance its Enterprise Risk Management
(“ERM”) framework and governance practices to monitor risk in response to
recommendations arising from the recent governance review undertaken by
Independent Audit Ltd, and last year’s external review of our ERM framework.
The Board, supported by the Group Risk Committee, assessed and approved
plans for our implementation of the FCA’s Consumer Duty and the embedding
of processes to ensure we deliver good outcomes for our retail customers.
We have also continued our programme of internal controls improvements,
both in relation to areas previously identified and to ensure we are well placed
to comply with new reporting requirements being introduced.
70 – CMC Markets plc
Annual Report and Financial Statements 2024
The balance of skills, experience and independence of the Board and
individual Directors is subject to ongoing review by the Nomination Committee.
ESG and sustainability
The Board continues to support the Group’s focus on sustainable business.
Last year the Group introduced the Our Tomorrow sustainability strategy
with its five core pillars, focused on the delivery of our material environmental,
social and governance (“ESG”) risks. This year, we have continued to follow
the five sustainability pillar approach. More information is included in the Our
Tomorrow section on pages 32 to 39.
Stakeholder engagement
Our stakeholders are essential to the success of the Group and the Board
recognises the importance of engagement with them. The Section 172
statement, our summary of engagement with stakeholders on pages 23
to 27 and the statements on pages 81 and 83 of the Governance report
provide more details in relation to how the Group has managed stakeholder
engagement in the year under review.
As Chairman, I am responsible for the eective communication between
shareholders and the Company and for ensuring the Board understands
the views of major shareholders and I will also always make myself available
to meet any of our shareholders who wish to discuss matters regarding the
Company. To that end I have, with the Senior Independent Director, met with
a number of shareholders over the course of the last 12 months. The principal
communication with private shareholders is through our full-year and interim
results announcements, ad hoc updates, the Annual Report and our Annual
General Meeting (“AGM”). We are holding our AGM on Thursday 25 July
2024 and hope that our shareholders will attend. My fellow Directors and I
will be available to answer any questions that shareholders may have about
the Company.
Priorities for the year ahead
In the year ahead, the Group will continue its strategy of growth and of product
and geographical diversification, with a particular focus on institutional clients
and the business-to-business sector. The Board will remain focused on
delivering for our stakeholders and ensuring that the Group’s governance
framework supports the requirements of the Group as it develops. This will
include consideration of Board succession and my succession as Chairman
as the year progresses.
James Richards
Chairman
20 June 2024
UK Corporate Governance Code
As a company listed on the Main Market of the London Stock Exchange,
CMCMarkets plc is subject to the Principles and Provisions of the
UK Corporate Governance Code 2018 (the “Code”) published by the
FinancialReporting Council (“FRC”) and available at www.frc.org.uk.
For the financial year ended 31 March 2024, the Board considers that the
Company complied with the Principles and Provisions of the Code throughout
the period. Details of our corporate governance framework are available
on page 79.
The Governance report and individual Committee reports on pages 75 to 114
each set out the ways in which the Company has applied the Principles and
complied with the Provisions of the Code and describe the activities of the
Board and its Committees and the matters they have considered during the
financial year.
The 2024 UK Corporate Governance Code (the “2024 Code”) was published by
the FRC in January 2024. The 2024 Code will begin to apply to CMC Markets
from 1 April 2025. We are already considering the changes introduced in the
2024 Code and will report on progress at the appropriate time.
Leadership
It is critical that the Board has the right composition so it can provide balanced
leadership for the Group and the independent discharge of its duties to
shareholders. This relies on the Board having the right balance of skills,
experience and objectivity, as well as a good working knowledge of the
Group’s business.
During the year, the Board has continued to review its own composition
to ensure it remains appropriate to oversee the delivery of the Group’s
strategy. Further details of the Board’s skills and experience are available on
pages 72 to 74.
The Board and its Committees have continued to perform eectively during
the year, as confirmed by our Board performance review. Further details of the
review are set out on page 92.
During the year the Board was pleased to approve the appointment of Albert
Soleiman as Chief Financial Ocer and Executive Director with eect from
1 September 2023, following the resignation of Euan Marshall. Euan retired
from the Board on the same date but remained with the Group for the next
few months to support the orderly transition of the CFO role. Albert first joined
CMC in 2005, having qualified as a chartered accountant with KPMG. He
has extensive knowledge of the Group and prior to his appointment as CFO,
he led the launch of our CMC Invest UK business, which is a key part of our
diversification strategy and enables our clients to generate long-term wealth
through its investing platforms.
His appointment has added to the diversity of the Board in terms of experience
and viewpoint and also means that at least one member of the Board is from a
minority ethnic background. 60% of the Non-Executive Directors are female.
Susanne Chishti has advised she is not putting herself up for re-election at
this year’s AGM. I would like to thank Susanne for her dedication to the role
as a Non-Executive Director at CMC and the insights she brought to Board
discussions particularly in relation to people matters. We wish her well in her
future endeavours.
Board biographies can be found on pages 72 to 74. More details on Board
changes, our assessment of the balance of leadership skills and experience,
and our talent and succession planning processes can be found in the
Nomination Committee report on pages 90 to 93.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 71
Annual Report and Financial Statements 2024
Board of Directors
Committee membership
A
Group Audit Committee
R
Remuneration Committee
G
Group Risk Committee
M
Executive Risk Committee
N
Nomination Committee
E
Executive Committee
Chairman
James Richards
Independent Chairman
Appointment
1 April 2015
Committee membership
G
R
N
Skills and experience
James joined the Group as a
Non-Executive Director in April 2015
and was appointed as Chairman
with eect from 1 January 2018 and
Chair of the Nomination Committee
from 31 January 2018.
He has previously held positions
as Chair of the Remuneration
Committee and interim Chair of the
Group Risk Committee and Audit
Committee, and been a member
of the Nomination Committee and
Group Audit Committee. James
was admitted to the roll of solicitors
in England and Wales in 1984 and
in the Republic of Ireland in 2012.
James was a partner at Dillon
Eustace, a law firm specialising in
financial services in Ireland (2012 to
2016). Prior to this he was a finance
partner at Travers Smith LLP for
14 years. Having occupied various
senior positions within leading
law firms, James has extensive
experience in derivatives, debt
capital markets and structured
finance and his leadership skills are
key to the long-term sustainability
ofthe Group.
Current external appointments
None
Paul Wainscott
Senior Independent
Director
Appointment
19 October 2017
Committee membership
A
G
R
N
Skills and experience
Paul joined the Group as an
independent Non-Executive
Director in October 2017 and acts
as the Group’s Senior Independent
Director. Paul served as finance
director at the Peel Group for 27
years until March 2018. During his
time at the Peel Group, Paul gained
wide experience at board level and
in several dierent business sectors,
including real estate, transport,
media and utilities. Paul’s financial
experience, gained via a variety of
sectors, is key to his contributions
and to the long-term sustainability
ofthe Group.
Current external appointments
None
Lord Peter Cruddas
Chief Executive Ocer
Appointment
3 June 2004
Committee membership
E
Skills and experience
Peter founded the Group and
became its Chief Executive Ocer
in 1989. Peter held this role until
October 2007 and again between
July 2009 and June 2010. Between
2003 and March 2013, he also
served as the Group’s Executive
Chairman. In March 2013, he
once again became the Group’s
Chief Executive Ocer and is
responsible for running the Group
on a day-to-day basis. Prior to
founding the Group, Peter was chief
dealer and global group treasury
adviser at S.C.F. Equity Services,
where he was responsible for all the
activities of a dealing room whose
principal activities were trading in
futures and options in currencies,
precious metals, commodities
and spot forwards on foreign
exchange and bullion. His continued
entrepreneurial leadership is
important to the long-term growth
and sustainability of the Group.
Current external appointments
– The Peter Cruddas Foundation
– director
– Finada Limited
– director
– UK House of Lords
– member
72 – CMC Markets plc
Annual Report and Financial Statements 2024
Sarah Ing
Independent
Non-Executive
Director
Appointment
14 September 2017
Committee membership
A
G
R
N
Skills and experience
Sarah joined the Group as a
Non-Executive Director in
September 2017. She has over
30years’ experience in accountancy,
investment banking and fund
management, including time with
HSBC and UBS. She is a chartered
accountant and was a top-rated
equity research analyst covering
the general financials sector. Sarah
also founded and ran a hedge fund
investment management business.
Sarah’s investment and financial
knowledge and the experience
she brings from her other plc
appointments add value to the
ongoing sustainability of the Group.
Current external appointments
– Marex Group plc – non-executive
director, chair of the audit and
compliance committee and
member of the remuneration,
nomination andrisk committees
– XPS Pensions Group plc –
non-executive director, chair of
the sustainability committee and
audit and risk committees and
member of theremuneration and
nominationcommittees
– City of London Investment Group
PLC - non-executive director,
member of the audit, nomination
and remuneration committees
Clare Francis
Independent
Non-Executive
Director
Appointment
19 December 2022
Committee membership
A
G
R
N
Other responsibilities:
Consumer Duty Champion
Skills and experience
Clare joined the Group as a
Non-Executive Director in December
2022. Having started her career
at NatWest, she has over 25 years’
experience operating at board level in
large companies in the UK and overseas
and has spent over 25 years in banking
and markets. She has experience in
driving emerging markets across Asia,
Africa and the Americas. She is an
honorary fellow of the Association of
Corporate Treasurers and has sat on the
boards of AFME and BAB.
Clare was most recently the global
banking head of Europe, chief executive
of Standard Chartered Bank UK and
global head of investors and insurance at
Standard Chartered Bank. Clare has also
held roles as head of global corporates/
international and global head of financial
market sales at Lloyds Banking Group
and was head of European financial
market advisory at HSBC. She is also a
senior adviser to Provenance Blockchain,
which provides insight into fintech and
the disruption of financial services, and
a non-voting member of the investment
management company, Baillie Giord.
Clare is also a non-executive at Bank of
America (MLI). Clare’s extensive global
experience and her input into the ongoing
improvements to the Group’s risk and
internal controls management are key to
the long-term sustainability ofthe Group.
Current external appointments
– Department of International Trade
TAG – board member
– Infrastructure Exports: UK –
board member
– Baillie Giord – voting member of the
risk committee
– Bank of America (MLI) – non-executive
Susanne Chishti
Independent
Non-Executive
Director
Appointment
1 June 2022
Committee membership
A
G
R
N
Other responsibilities:
Non-Executive Director for
workforceengagement
Skills and experience
Susanne joined the Group as a
Non-Executive Director in June 2022.
She started her career working for
a financial technology (“fintech”)
company in Silicon Valley. She has
25 years’ experience in fintech,
banking, investment management
and consulting, including time with
Deutsche Bank, Lloyds Banking
Group, Morgan Stanley Investment
Management and Accenture.
Susanne is the co-author of
seven fintech books published
by Wiley. She is often invited
to share her fintech thought
leadership at international fintech
conferences and as a judge at
fintech competitions. Her extensive
knowledge of the fintech sector
and experience of advising on
leadership and engagement matters
are invaluable to the long-term
sustainability of the Group.
Current external appointments
– FINTECH Circle – chair
– Crown Agents Bank Limited
–
non-executive director
– CAB Payments Holdings PLC
–
non-executive director
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 73
Annual Report and Financial Statements 2024
Board of Directors continued
Committee membership
A
Group Audit Committee
R
Remuneration Committee
G
Group Risk Committee
M
Executive Risk Committee
N
Nomination Committee
E
Executive Committee
Chairman
David Fineberg
Deputy Chief
ExecutiveOcer
Appointment
1 January 2014
Committee membership
E
M
Skills and experience
David joined the Group in November
1997, working on the trading desk
and developing the Group’s multi-
asset CFD and spread bet dealing
desk. As a Senior Dealer he was
responsible for managing the UK
and US equity books. Between
April 2007 and September 2012, he
was the Group’s Western Head of
Trading, covering all asset classes
for the western region. In September
2012 David was appointed to the
role of Group Head of Trading and
in January 2014 was appointed as
the Group Director of Trading, with
overall responsibility for the trading
and pricing strategies and activities
across the Group.
In June 2017 his role further
expanded when he became Group
Commercial Director, and then
in April 2019 he was promoted
to the position of Deputy Chief
Executive Ocer.
David’s in-depth knowledge of the
business and the opportunities
for growth and evolving strategy
is important to the long-term
sustainability of the Group.
Current external appointments
None
Albert Soleiman
Chief Financial Ocer
Appointment
1 September 2023
Committee membership
E
M
Skills and experience
Albert joined the Group in 2005
and became Group Head of Tax in
2008. After a short period working
with a fintech company, Albert
became CEO of our CMC Invest
UK business, where he built a deep
understanding of the strategic fit for
the business within the CMC Group
and its position in the market. Albert
was appointed Group CFO on 1
September 2023, with responsibility
for the management of all finance
functions globally and investor
relations. Albert has extensive tax
and commercial experience, having
operated in tax consultancy roles
with KPMG and William Buck (an
Australian accounting firm) before
joining CMC. Albert holds a Bachelor
of Business (Accountancy) from
the Royal Melbourne Institute of
Technology and completed the
Chartered Accountant programme
with the Institute of Chartered
Accountants in Australia.
Albert’s extensive knowledge of the
Group will support the execution of
its diversification strategy.
Current external appointments
None
Matthew Lewis
Head of Asia Pacific
&Canada
Appointment
1 November 2019
Committee membership
E
M
Skills and experience
Matthew joined the Group in
September 2005 and has held a
variety of roles including Senior
Dealer, Head of Eastern Equities,
Head of Sales Trading ANZ, Head of
Trading Eastern Region and Director
of Asia. In his current role as the
Head of Asia Pacific & Canada, he
is responsible for implementing the
Group’s business strategies across
the APAC & Canada region for both
the retail and wholesale CFD and
foreign exchange business. He is
also responsible for the Group’s
Invest Australia business. Prior to
joining the Group, Matthew worked
for Commonwealth Securities,
Australia’s largest provider of
financial services, dealing in equities
before moving into derivatives as
an options trader and warrants
representative. Matthew has over
20 years’ experience in financial
services and holds a Bachelor of
Economics from the University
of Sydney.
Matthew’s understanding of the
APAC business and its growth
and development is important
to the long-term sustainability
ofthe Group.
Current external appointments
None
74 – CMC Markets plc
Annual Report and Financial Statements 2024
Corporate governance
The Board
The role of the Board
The Board provides entrepreneurial leadership and strategic oversight in
relation to the long-term, sustainable success of the Company.
The Board, taking account of relevant stakeholder interests, is responsible
for the establishment of the Group’s purpose, values and strategy and has
oversight of implementation within necessary financial, human resources
andcultural frameworks.
The Board has ultimate responsibility to prepare the Annual Report and Financial
Statements and to ensure that appropriate internal controls and risk management
systems are in place in order to assess, manage and mitigate risk.
The Board delegates the in-depth review and monitoring of internal controls
and risk management to the Group Audit Committee and Group Risk
Committee respectively.
The terms of reference of these Board Committees (and the Remuneration
and Nomination Committees) are available on the CMC Markets plc Group
website (www.cmcmarkets.com/group/about-us/governance/committees).
Board leadership and purpose
The Board provides entrepreneurial leadership and oversight of the delivery
of strategic objectives and the long-term, sustainable success of the
Company, taking into account dierent stakeholder priorities and employee
engagement feedback.
The Board considers any material diversification of the Company’s product
oerings to ensure a robust range of products designed to be successful
within a changing regulatory environment and appeal to changing stakeholder
requirements, with the objective of preserving long-term value.
Board composition
The Directors who held oce during the financial year, and their attendance at scheduled meetings, is shown below.
Name Position
Board
meetings
Group Audit
Committee
Group Risk
Committee
Nomination
Committee
Remuneration
Committee
Number of meetings 7 7 7 7 8
James Richards
1
Chairman 7(7) — 6(7) 6(7) 7(8)
Paul Wainscott
2
Senior Independent Director 7(7) 7(7) 6(7) 6(7) 8(8)
Sarah Ing Independent Non-Executive Director 7(7) 7(7) 7(7) 7(7) 8(8)
Clare Francis Independent Non-Executive Director 7(7) 7(7) 7(7) 7(7) 8(8)
Susanne Chishti Independent Non-Executive Director 7(7) 7(7) 7(7) 7(7) 8(8)
Lord Cruddas Chief Executive Officer 7(7) — — — —
David Fineberg Deputy Chief Executive Officer 7(7) — — — —
Matthew Lewis Head of Asia Pacific & Canada 6(7) — — — —
Albert Soleiman
4
Chief Financial Officer 4(4) — — — —
Euan Marshall
5
Chief Financial Officer 2(2) — — — —
The figures in brackets denote the number of meetings the Director was eligible to attend.
1 James Richards missed three Committee meetings due to illness.
2 Paul Wainscott missed two Committee meetings due to illness.
3 Matthew Lewis sent his apologies for one Board meeting which had been called at short notice and took place in the evening in the UK, making it impractical for him to attend due to the time dierence.
4 Albert Soleiman was appointed as Chief Financial Ocer on 1 September 2023.
5 Euan Marshall retired from his position as Chief Financial Ocer on 1 September 2023.
Stakeholder and employee-related matters form part of the Board’s
decision-making processes, facilitated by the investment in employee
engagement surveys, the work of the designated Non-Executive Director for
workforce engagement, ongoing shareholder dialogue and market feedback.
Our Section 172 statement on pages 23 and 24 and the separate reports of
the various Board Committees provide more detail on how the Board and its
Committees have discharged their duties during the year. The Our Tomorrow
section on pages 32 to 39 sets out the work being done by the Group in
relation to sustainability matters and the Strategic report on pages 1 to 68
provides more detail on some of the activities to continue the investment
and diversification of the business. The Board’s leadership recognises the
importance of a working culture which promotes inclusion and acceptance of
diering approaches to facilitate the successful delivery of strategic projects
and initiatives. We have a culture that is focused on providing a superior
technology experience for our clients which is aligned to our purpose, values
and strategy. To support this it is important that our people are engaged with
this goal and have the knowledge to ensure they are motivated to provide a
good client experience. Our Section 172 statement, Stakeholder engagement
section and Our Tomorrow section provide information on some of the
initiatives undertaken throughout the year to engage with employees.
The Group has an established process in relation to the reporting and
processing of employee-related issues. Within a structure ultimately
overseen by the Board, any employee can raise a matter of concern at any
time through day-to-day management reports or whistleblower channels as
appropriate. The Board receives a whistleblowing report annually which will
highlight matters raised and any updates to the whistleblowing procedures
andGroup policy.
The Board recognises the importance of understanding employee engagement
and the prevailing Group culture to enable alignment with delivery on strategy
in a way that ensures a commitment to the Group’s values.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 75
Annual Report and Financial Statements 2024
Corporate governance continued
The Board continued
Board composition continued
The Board also met on various occasions on an ad hoc basis throughout the
year to discuss matters such as potential investments, final and interim results,
dividends and the appointment of the new CFO.
Activities of the Board
The Board has a comprehensive meeting planner that ensures all matters for
Board consideration are presented and reviewed in a timely manner.
Key areas of focus during this financial year were:
– consideration and approval of the Annual Report and Financial Statements,
half-year results and interim dividend approvals;
– selection and appointment of the Group CFO;
– review of the eciency and cost reduction proposals for the Group
and the impact on employees and of the subsequent employee
engagement surveys;
– approval of Group property management issues;
– ongoing review of CMC Markets plc governance arrangements;
– consideration of intra-group outsourcing and service arrangements;
– the development and launch of new products and expansion of our
business intonew regions;
– risk management and risk appetite including adoption of the Enterprise
Risk Management Framework and associated Risk Appetite Statements;
– the review and approval of ICARA and other regulatory documents;
– oversight of CASS reporting and compliance;
– approval of Board policies, e.g. whistleblowing;
– consideration of the sustainability strategy, targets and KPIs;
– assessment of the impact on the Group of the FCA’s Consumer Duty
regulations; and
– insurance renewal arrangements and approvals.
Some of the key decisions made by the Board impacting stakeholders during
the year are described in the Section 172 statement on pages 23 and 24.
Board balance
Provision 10 of the Code considers that a Director may not be regarded as
independent after serving for more than nine years on the Board. As noted
on page 80, the Chairman joined the Board on 1 April 2015, and after 1 April
2024 had served on the Board for more than nine years. During the year
ended 31 March 2024 the Chairman was considered to be independent under
the criteria of Provision 10 of the Code but was no longer considered to be
independent from 1 April 2024. In line with the Code, over half of the Board
members, excluding the Chair, are independent non-executive directors.
There is a clear division of responsibilities between the executive leadership
and the Board as noted on page 78.
Board support
The Board operates in accordance with the provisions of the Articles
of Association and established processes and approved policies, as
appropriate, and has access to relevant resources as required.
Each Director has access to the Company Secretary, who is responsible
for advising the Board on governance matters and supporting the ecient
functioning of the Board and its Committees. The Company Secretary provides
meeting papers to Directors in a timely manner to allow for conducive and
eective Board and Board Committee meetings and attends all Board and
Committee meetings in order to provide appropriate advice on corporate
governance and matters of procedure. The appointment and removal of the
Company Secretary are matters for the Board.
As stated in each of the Board Committees’ terms of reference, the Directors
may take independent professional advice at the Company’s expense.
76 – CMC Markets plc
Annual Report and Financial Statements 2024
Matters reserved for
theBoard
It is recognised that certain matters cannot, or should not, be
delegated and the Board has adopted a schedule of matters
reserved for Board consideration and approval. The matters
reserved for the Board fall into the following areas:
– strategy and management;
– structure and capital;
– financial reporting and controls;
– internal controls and risk management;
– contracts;
– communications;
– Board membership and other appointments;
– remuneration;
– delegation of authority;
– corporate governance matters;
– policies;
– political and charitable donations;
– appointment of principal professional advisers;
– material litigation;
– whistleblowing;
– Modern Slavery Statement;
– pension schemes; and
– insurance.
The schedule of matters reserved for the Board is
availableonthe CMC Markets plc Group website,
www.cmcmarkets.com/group/about-us/governance.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 77
Annual Report and Financial Statements 2024
Corporate governance continued
Division of responsibilities
Chairman
Responsibilities of the Chairman include:
– leadership of the Board, with responsibility for its overall
eectiveness in directing the Company, and ensuring open and
eective communication between the Executive and Non-
Executive Directors;
– ensuring Directors receive accurate, timely and clear information
and that Board meetings are eective by setting appropriate
and relevant agenda items, creating an atmosphere whereby
all Directors are engaged and free to enter healthy and
constructive debate;
– ensuring eective communication between major shareholders
and the Board;
– overseeing each Director’s induction and ongoing training; and
– leadership of the Board eectiveness process through his role as
Chair of the Nomination Committee.
CEO
Responsibilities of the CEO include:
– day-to-day management of the Group’s business and
implementation of the Board-approved strategy;
– acting as Chair of the Executive Committee and leading the senior
management team in devising and reviewing Group development
for consideration by the Board;
– responsibility for the operations and results of the Group; and
– promoting the Group’s values, culture and standards.
Senior Independent Director
Responsibilities of the Senior Independent Director include:
– acting as a sounding board for the Chairman and serving as an
intermediary for the other Directors as necessary;
– acting as lead independent Non-Executive Director;
– leading the Non-Executive Directors in the performance evaluation
ofthe Chairman, with input from the Executive Directors; and
– being available to shareholders in the event that the Chairman,
ChiefExecutive Ocer or other Executive Directors are unavailable.
Non-Executive Directors
Responsibilities of the Non-Executive Directors include:
– providing strategic guidance and constructively challenging
management proposals and providing advice in line with their
respective skills and experience;
– helping to develop proposals on strategy;
– reviewing the performance of management and individual
Executive Directors against agreed performance objectives;
– having a prime role in appointing and, where necessary,
removingExecutive Directors; and
– having an integral role in succession planning.
The roles of the Chairman and Chief Executive Ocer (“CEO”) are separate,
clearly defined in writing and agreed by the Board.
78 – CMC Markets plc
Annual Report and Financial Statements 2024
Governance structure as at 31 March 2024
Independent
assurance
External auditor
Group Risk
Committee
Group Board
Nomination
Committee
Remuneration
Committee
Regulated
subsidiaries
Group Audit
Committee
Sustainability
Committee
Treating Customers
Fairly and Conduct
Committee
Client
Money and Asset
Protection Committee
Subsidiaries
Internal assurance
Independent assurance
Direct reporting line
Reporting line for certain matters
Board/Board Committee
Senior Management Committee
Management Committee
Executive
Committee
Executive Risk
Committee
Product & Programme
Governance Committee
Internal
assurance
Group internal
audit
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 79
Annual Report and Financial Statements 2024
Election and re-election of Directors
The 2024 Annual General Meeting (“AGM”) will be held at 10:00 a.m. on
25July2024 at 133 Houndsditch, London EC3A 7BX.
Directors newly appointed to the Board are required to submit themselves
for election by shareholders at the AGM following their appointment. In
accordance with the Code all other current Directors, other than Susanne
Chishti who is stepping down from the Board at the AGM, will oer themselves
forre-election at the forthcoming AGM.
Following recommendations from the Nomination Committee and review by
the Chairman, the Board considers that all Directors continue to be eective,
remain committed to their roles and have sucient time available to perform
their duties. Biographies for each Director, which set out the reasons why the
Board believes each Director’s contribution is, and continues to be, important
to the Group’s long-term, sustainable success, are available on pages 72 to 74.
Chairman’s tenure
James Richards was appointed to the Board on 1 April 2015 and had therefore
served on the Board for nine years with eect from 1 April 2024. Out of these
nine years, he served for two years and nine months as a Non-Executive
Director and will have served six years and three months as Chairman.
Having regard to the Provisions of the 2018 UK Corporate Governance
Code,the Nomination Committee, led by the Senior Independent Director,
met without James present in May 2023 and February and March 2024 to
discuss the Chairman’s succession.
In line with a recommendation from our major shareholder and CEO, the
Committee considered and agreed to recommend to the Board that James’
appointment to the Board and as Group Chairman be extended until the
close of the AGM in 2025 in order to provide continuity while we navigate
through our diversification strategy, increase our product range and expand
our institutional business. This proposal was approved by the Board and
a resolution in relation to James’ re-election will therefore be presented to
shareholders for approval at the 2024 AGM.
From 1 April 2024 James was no longer considered to be independent. In line
with Provision 11 of the Code, excluding the Chairman, at least half of the Board
comprises independent Non-Executive Directors who are considered to
beindependent.
The Committee will continue to consider succession plans for the Chairman.
After 1 April 2024, James stood down as a member of the Risk and
Remuneration Committees but remained a standing invitee of both
Committees. James remained the Chair and a member of the Nomination
Committee but will not participate in the process to select a successor as
Chairman of the Board.
Independence of Non-Executive Directors
andtime commitment
The Board carries out a review of the independence of its Non-Executive
Directors on an annual basis and considers each of the Non-Executive
Directors, including the Chairman, to be independent in character and
judgement. Each Director is aware of the need to allocate sucient time
to the Company in order to fulfil their responsibilities and is notified of all
scheduled Board and Board Committee meetings. Non-Executive Directors
are expected to obtain the agreement of the Chairman before accepting
additional commitments that might aect the time they are able to devote to
their role in the Company.
Directors’ induction, training and evaluation
On appointment, new Directors receive a comprehensive and formal
induction, which is facilitated by the Company Secretary in consultation with
the Chairman.
The Nomination Committee ensures that an annual evaluation of the Board,
Board Committees and individual Directors is undertaken. More information is
provided in the Nomination Committee report on page 92.
The Board undertook a skills assessment of the Directors which, together
with any observations made as part of the Board evaluation process, is used
by the Company to tailor induction meetings and training requirements for
each Director. One-to-one meetings are arranged between the Director
and the management teams in relevant areas of the business as part of the
induction. This allows an incoming Director to familiarise themselves with
the management team and their respective roles and responsibilities and to
gain a greater understanding and awareness of the firm’s business and the
industry in which it operates. These meetings also provide an opportunity for
new Directors to discuss the business strategy and model, risk management,
governance and controls, the requirements of the regulatory framework and
the culture of the Group. These meetings and training arrangements form a
key part of the learning and development plan for any new Director appointed
to the Board.
Non-Executive Directors attend internally and externally facilitated training
sessions and have access to online and digital platform-based training and
information resources including on relevant financial services matters with
emphasis on responsibilities with regard to regulation and compliance. They
also have access to other knowledge resources and education programmes
oered by third-party service providers with which the Group has established
relevant links.
Corporate governance continued
Accountability
80 – CMC Markets plc
Annual Report and Financial Statements 2024
Scheduled 2024/25 key shareholder events
Board responsibilities in relation to the Annual
Report and Financial Statements
The Board has ultimate responsibility for reviewing and approving the Annual
Report and Financial Statements and it has considered and endorsed the
arrangements enabling it to confirm that the Annual Report and Financial
Statements, taken as a whole, is fair, balanced and understandable and
that it provides the information necessary for shareholders to assess
the Company’s position and performance, business model and strategy.
Withtheassistance of the Group Audit Committee, the Board ensured that
sucient time and resources were available to encompass the disclosure
requirements to which the Group is subject and that the Annual Report and
Financial Statements met all relevant disclosure requirements.
The Board believes in the governance principles of being open, transparent
and compliant with the Principles of the Code. Following review by the Group
Audit Committee, which considered the processes and controls in place for the
preparation and verification of the Annual Report and Financial Statements, the
Board concluded that the Annual Report and Financial Statements contained
the necessary information for shareholders to assess the Company’s performance,
strategy and overall business model.
Group Audit Committee
The Group Audit Committee has been delegated responsibility for the
monitoring and oversight of the external and internal audit and financial
internal controls. The Committee’s responsibilities, main activities and
priorities for the next reporting cycle are set out on pages 83 to 86.
Group Risk Committee
The Group Risk Committee has been delegated responsibility for the
monitoring and oversight of risk management, mitigation and recommendation
for and approval of the risk appetite to the Board. The Committee’s responsibilities,
main activities and priorities for the coming year are set out on pages 87 to 89.
Shareholder engagement
The Board recognises the importance of good communication with shareholders.
Board members regularly meet with a cross-section of the Company’s
shareholders to ensure that the Group strategy takes due consideration of
shareholder views.
During the year the Board was regularly apprised of shareholder sentiment
and shareholder correspondence was also shared with the Board as appropriate.
Investor relations reports are distributed to the Board and considered at each
Board meeting.
In addition to meetings held between our Executive Directors during the year
we oered major shareholders the opportunity to meet with our Chairman and
other Non-Executive Directors. Two shareholders expressed an interest to
meet in May 2023 and the feedback from these meetings was discussed with
the wider Board.
The principal communication method with private investors is through
our finalresults, half-year report, any ad hoc market announcements and
the AGM. At the AGM, separate resolutions are proposed for each item of
business presented to shareholders for approval, with voting conducted
by a poll. All valid proxy appointment forms are recorded and counted and
information regarding votes is published on the Company’s website. The
notice is posted to shareholders at least 21 days before the date of the AGM.
June 2024
2024 full-year results
July 2024
Q1 2025 trading update and Annual General Meeting 2024
November 2024
H1 2025 interim results
April 2025
Pre-close trading update
Should a significant proportion of the votes cast be against any resolution, the
Company is required to explain when announcing the results what action it
will take to understand why this has been the result. There were no significant
votes against any of the resolutions put to shareholders at the 2023 AGM.
In accordance with the Companies Act 2006, members representing at least
5% of the voting rights, or at least 100 members having a right to vote, can
requisition the Board to circulate a resolution or statement in relation to the
AGM to members.
Our Stakeholder engagement report on pages 25 to 27 sets out some other
engagement methods with shareholders and how their views impact Board
discussions and decisions.
Stakeholder engagement
The Board recognises its various legal, fiduciary, statutory and governance
obligations and duties in relation to stakeholder engagement, including those
specified in the Principles and Provisions of the Code and its duty to promote
the success of the Company under Section 172 of the Companies Act 2006.
The Board receives updates on stakeholder engagement, including in the
Board papers provided to facilitate Board decision making. Please also see
the Stakeholder engagement section on pages 25 to 27 for a summary of
the Group’s stakeholders, the engagement that has taken place during the
year and its impact on decision making. The Our Tomorrow section on pages
32 to 39 provides further details of engagement with our key stakeholders
regarding responding to stakeholders’ needs.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 81
Annual Report and Financial Statements 2024
Employee engagement
Susanne Chishti is our designated Non-Executive Director for workforce
engagement with responsibility for engaging with (and overseeing engagement
with) the Group’s employees to discern the views of the workforce and report
back to the Nomination Committee regularly. Susanne also plays an active
role in ensuring the views of the workforce are, within the matters reserved for
the Board and the Nomination Committee terms of reference, considered as
part of Board and Committee discussions and decision making. She brings
over 25 years of industry expertise, including at Board level, with a strong focus
on governance. As noted earlier in this Report, Susanne is stepping down
from the Board at the forthcoming AGM, and an announcement in relation to
a successor as the designated Non-Executive for workforce engagement will
be provided in due course.
During the year, the workforce engagement activities focused on by Susanne
for the Group included:
– being involved in Women@CMC initiatives;
– meeting with employees to seek further feedback on responses to the
annual sta engagement survey;
– meeting with new joiners as part of the “Meet the Exec Team” initiative;
– celebrating the success of employees and key initiatives both in private and
in public; and
– continuing the “Ask the NED” channel, an anonymous way of engaging with
her on any employee matters.
Initiatives to reflect feedback from the workforce engagement processes
include a Group-wide mentoring scheme which has been introduced across
all regions.
The Board believes this engagement mechanism has worked well during
the year and that it continues to be an eective way of ensuring direct and
independent Board understanding of the views of the workforce.
The Nomination Committee reviews and considers the results of the various
employee engagement and pulse surveys undertaken throughout the year
and reports to the Board accordingly.
The Board has considered a number of employee-related initiatives during
theyear as set out in the Our Tomorrow section on pages 32 to 39.
Internal control and risk management systems
over financial reporting
The Board is responsible for the Company’s risk management, internal
control systems and their eectiveness. It is also involved in the process for
identifying, evaluating and managing those principal risks and reviews these
systems regularly. The Group has an internal control framework and risk
management systems, as set out below, in place to ensure that the financial
information produced is accurate, reliable and timely such that it can be used
by all stakeholders to monitor performance and aid eective decision making.
This framework has been in place during the year and up to date the date of
approval of the Report.
– Expertise: The utilisation of appropriately qualified and experienced
colleagues and regular knowledge sharing within the team.
– Forecasting and budgeting: The Group has a detailed forecasting and
budgeting process in place that is well embedded across the Group.
– Financial accounting and reporting: The finance team produces Group
consolidated accounts on a monthly basis. There are full reconciliation
and reporting processes in place to ensure that any issues are identified
and resolved in a timely manner. Detailed reconciliations are completed
between the trading systems and the general ledger to ensure completeness.
– Management reporting: The Group has a detailed suite of management
information (“MI”) that is prepared daily, weekly, monthly and quarterly. This
MI was prepared and improved throughout the year to reflect appropriate
measurements as the business has changed.
– Tax: The Group has a formal tax strategy, reviewed and approved annually
by the Group Audit Committee, in addition to monthly tax compliance
monitoring, quarterly attestations with items raised within the Group’s Tax
Risk Committee.
– Segregation of duties: Appropriate segregation of duties to ensure that no
individual controls the end-to-end process.
– IT environment: The Group is heavily reliant on its IT systems and
has procedures and controls to ensure that they are operational and
accessible at all times. There have been no significant IT issues in the year
without appropriate mitigation that could impact the financial reporting of
the Group.
Information on the Group’s risk management systems and how the Board
oversees risk management is detailed in the Risk management section on
pages 59 to 68.
James Richards
Chairman
20 June 2024
Corporate governance continued
Accountability continued
82 – CMC Markets plc
Annual Report and Financial Statements 2024
Paul Wainscott
Senior Independent
Director and
Chair of the Group
Audit Committee
Group Audit Committee report
Members and attendance
Paul Wainscott
Committee Chair
Susanne Chishti
Independent Non-Executive Director
Clare Francis
Independent Non-Executive Director
Sarah Ing
Independent Non-Executive Director
Attended meeting
Did not attend meeting held during tenure
Dear shareholder,
As Chair of the Group Audit Committee (the “Committee”), I am pleased to
present the Group Audit Committee report for the year ended 31 March 2024.
The role of the Committee is to assist the Board in discharging its
responsibilities for monitoring the integrity of the Financial Statements of
the Company, and monitor the eectiveness of the management systems
and internal controls relating to financial reporting and the performance and
objectivity of the internal and external auditors. This report summarises the
activities, key responsibilities and future focus of the Committee.
Principal responsibilities of the Group
Audit Committee
The Committee operates within agreed terms of reference, which outline its
key responsibilities.
The Committee’s terms of reference can be found on the Group’s website:
www.cmcmarkets.com/group/about-us/governance/committees.
In accordance with its terms of reference, the Committee is required to
evaluate its own performance. In the year under review this was done as part
of the wider Board and Committee evaluation, as described on page 92.
Areas of focus in 2023/24
The Committee’s main responsibilities, in compliance with the requirements
ofthe Code, are as follows:
– to monitor the integrity of the Financial Statements of the Group;
– to consider any material information presented within the Financial
Statements insofar as it relates to audit and to review the final and half-year
results before making recommendations to the Board on their contents and
whether they are fair, balanced and understandable;
– to review and report to the Board on significant financial reporting issues
and judgements;
– to assess the adequacy and eectiveness of the Group’s internal control
systems and identify, assess, manage and monitor financial reporting risks
and report to the Board on any key findings;
– to review on an annual basis the procedures for detecting fraud and
financial crime;
– to review the tax strategy of the Group;
– to review and approve the internal audit charter and annual internal audit plan;
– to review the findings of all internal audit reports, make recommendations
as appropriate and monitor resolution plans;
– to review the performance of the internal audit function and consider the
structure of the function;
– to review the eectiveness and independence of the Company’s
external auditor including the appointment, reappointment, removal and
remuneration of the external auditor;
– to review and approve the policy on the provision of non-audit services by
the auditor; and
– to review the findings of the external auditor and how any challenges made
to management, and responses to such challenges, have been dealt with,
including in relation to key judgements.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 83
Annual Report and Financial Statements 2024
Composition and advisers
The Committee is chaired by Paul Wainscott with Susanne Chishti,
Clare Francis and Sarah Ing as members. The Committee is considered
independent of management and the members are all independent
Non-Executive Directors.
The Code requires the inclusion on the Committee of at least one member
determined by the Board as having recent and relevant financial experience.
The Committee Chair is considered to continue to fulfil this requirement. The
Committee as a whole has competence in relation to the trading, investing and
institutional business sectors in which the Company operates.
The Committee held six meetings during the financial year. The key activities
and discussion points are outlined in the relevant section of this Committee
report. Committee attendance is presented on page 83.
The Group Chairman, Chief Executive Ocer, Deputy Chief Executive
Ocer, Chief Financial Ocer, Head of Asia Pacific & Canada, Group Head
ofFinance, Company Secretary and Head of Investment Operations & CASS
attend Committee meetings by invitation. Representatives of Deloitte LLP
(“Deloitte”), the external auditor, and Grant Thornton LLP, the internal auditor,
also attend the Committee meetings by standing invitation.
Internal audit
The Group’s internal audit function is externally facilitated by Grant Thornton
LLP. The internal audit function has a reporting line to the Committee and has
direct access to the Committee Chair and each Committee member. The
Committee reviews all internal audit reports, follows up verification reports on
any findings identified by internal audit together with management’s response,
and reviews progress of remediation by management to address audit
findings. The Committee annually reviews and approves the internal audit
planand charter.
Representatives of the internal auditor attend each meeting where internal
audit reports are presented. The Committee regularly discusses with them
progress against the internal audit plan and any open audit actions. This allows
the Committee to review the eectiveness of the internal audit function on
a continual basis over the course of the year and provides an indication of
the maturity of the Group’s control framework. The lead internal auditor has
confirmed that the necessary resources, skillset and budget are in place to
deliver the internal audit plan, including having contingency to ensure that
the internal audit function can accommodate adding or bringing forward any
specific areas of focus.
External auditor
The Committee is responsible for overseeing the Group’s relationship with
the external auditor and the eectiveness of the audit process. It considers
the reappointment of the external auditor annually and such consideration
includes review of the independence of the external auditor and assessment
of the auditor’s performance.
Deloitte was appointed as the Group’s statutory auditor following a formal
tender process, commencing with the reporting period ended 31 March 2023.
Fiona Walker is the lead audit partner at Deloitte.
The Group confirms that it has complied with the provisions of the CMA
Order in respect of The Statutory Audit Services for Large Companies
Market Investigation (Mandatory Use of Competitive Tender Processes and
Audit Committee Responsibilities) Order 2014 for the financial year ended
31March 2024.
The Committee, in line with Financial Reporting Council (“FRC”) guidance,
continues to review the qualification, expertise, resources, eectiveness and
independence of the external auditor.
The Committee received reports during the year on the preparations made
by Deloitte to complete the half-year review and full-year audit in relation to the
year ended 31 March 2024. Deloitte challenged management on a number
of accounting judgements which were then discussed with the Committee
and the accounting judgements were subsequently approved. Following
discussion of the final audit report for the year, the level of appropriate
challenge, and the interactions with management and the Board, the
Committee believes that the audit has been eective for the year under review
and has recommended the reappointment of Deloitte as statutory auditor by
shareholders at the AGM to be held in July 2024.
During the period, a review was conducted of the eectiveness of the external
auditor following the 2023 audit cycle, and the results were presented to the
Committee. The views of key stakeholders were sought using a questionnaire,
with questions similar to those used in the prior year. The results concluded
that Deloitte’s performance was satisfactory, withan eective service for the
Group overall and a small number of focus areas identified.
The Committee continues to believe that Deloitte is independent by virtue of
the level of non-audit fees, procedures in place in relation to the employment
of ex-employees of the auditor, the internal processes and policies in place
at Deloitte to avoid conflicts and the nature of discussions held between the
Committee and Deloitte without representatives of management present.
Non-audit services policy
The Group has a number of relationships with independent advisory and
assurance firms which provide alternatives to using the external auditor.
During the year ended 31 March 2024, Deloitte provided non-audit services
to the Group. However, all services provided fall under categories explicitly
permitted under the FRC 2019 Ethical Standard.
The Group’s audit and other audit-related fees are disclosed in note 8 of the
Financial Statements. Other audit-related fees include the controls opinion
relating to the Group’s processes and controls over client money segregation,
compliance with The Capital Requirements (Country-by-Country Reporting)
Regulations 2013 and the mandatory regulatory audit of the Group’s
Germansubsidiary. The fees were well below the 70% non-audit fees cap.
In order to ensure compliance with the Ethical Standard issued by the FRC
regarding the requirement for safeguarding independence of the external
auditor, the Committee has in place a formal policy governing the engagement
of the auditor to provide non-audit services, which was reviewed and
reapproved in March 2024. The Committee approves any significant non-
audit services and fees and receives details of any other non-audit spend
approved by the Chief Financial Ocer and/or Committee Chair by way of
delegated authority by the Committee.
Priorities for financial year 2025
The Committee will continue to ensure that all relevant accounting practices
and disclosures are adhered to and that the work being done to improve
controls around these obligations promotes a strong culture of disclosure
andtransparency.
The Committee will oversee the work being done to ensure the Group can
comply with the Provisions of the new 2024 UK Corporate Governance Code
(the “2024 Code”) in respect of the role of the Group Audit Committee and the
additional disclosures relating to the monitoring and eectiveness of the risk
management and internal control framework. A number of the new Provisions
will take eect from the reporting period starting 1 April 2025 with the updated
Provision 29 relating to the risk management and control framework taking
eect for the reporting period starting 1 April 2026.
The Group has commenced a project based on the 2024 Code changes,
supported by dedicated resource to manage and oversee the project.
TheCommittee approved changes to its terms of reference in March 2024
toreflect some of the revised 2024 Code elements, for example to incorporate
key elements of the Audit Committee Minimum Standards which will be
further embedded into its activities in FY 2025.
Group Audit Committee report continued
84 – CMC Markets plc
Annual Report and Financial Statements 2024
At each scheduled meeting, the Committee:
– Receives a report from the Chief Financial Ocer on
the year-to-date financial performance of the Group.
– Receives an update on current and planned internal
audits and any internal audit issues highlighted in
completed audit reports.
– Receives a Group tax update.
– Receives an update on significant
accountingjudgements.
Main activities during the financial year
Agendas for scheduled Committee meetings are based on a pre-agreed annual meeting planner to ensure that the Committee fulfils its responsibilities in line with
its terms of reference and regulatory obligations.
July 2023
– Considered the draft Q1 trading update and
recommended to the Board for approval.
– Received a CASS audit update.
– Approved the internal audit plan.
– Discussed the annual evaluation of external
auditoreectiveness.
– Reviewed the annual report from the Money
Laundering Reporting Ocer (“MLRO”).
– Received an update on the DBT (BEIS) consultation
and internal controls project.
January 2024
– Received updates from the external auditor
regarding the FY24 audit plan and audit fees.
– Received a CASS update.
– Received an update on control observations relating
to key subsidiaries.
– Received an update on the DBT (BEIS) consultation
and internal controls project.
March 2024
– Received an update on pre-close trading.
– Received an Annual Report status update.
– Received a CASS update.
– Considered an update on the progress of the
year-end audit presented by the external auditor.
– Discussed the audit and control reporting with the
external auditor.
– Received an update on the DBT (BEIS) consultation
and internal controls project.
– Reviewed the non-audit services policy.
– Approved the internal audit charter.
– Reviewed the Committee annual calendar.
– Approved the Committee terms of reference.
May 2023
– Considered the year-end audit report presented by
the external auditor and discussed the audit with the
lead audit partner, including relevant significant audit
and accounting matters. In line with the Committee
terms of reference, the Committee met with the
Group auditor without management or the Executive
Directors being present.
– Reviewed the Annual Report and Financial
Statements, including the specific disclosures
such as going concern, viability, risk management
disclosures, the fair, balanced and understandable
assessment, and internal controls reporting, for
recommendation to the Board. The Committee also
reviewed and discussed the application of the group
accounting policies.
– Reviewed the draft final results announcement.
– Reviewed the proposed final dividend.
– Discussed non-audit services fees.
– Discussed with the auditor the accounting
treatment of a number of client trading and hedging
positions and the impairment analysis of certain
development costs.
– Recommended the reappointment of Deloitte as
Group auditor.
– Considered the eectiveness of the internal
controlframework.
– Received an update on the DBT (BEIS) consultation
and internal controls project.
November 2023
– Considered the half-year planning report presented
by the external auditor and discussed the report with
the lead audit partner.
– Reviewed the half-year report, including
consideration of significant accounting issues/
judgements, going concern, risk management and
internal controls reporting, for recommendation to
the Board.
– Reviewed the interim results and recommended to
the Board.
– Considered the management representation letter
and recommended to the Board for approval.
– Reviewed and recommended the proposed interim
dividend to the Board.
– Reviewed the draft half-year analyst presentation.
– Approved the FY24 audit engagement letter
and reviewed the remuneration and non-audit
services fees.
September 2023
– Considered and approved the tax strategy.
– Met with the internal auditor without management or
the Executive Directors being present.
– Received an update on the FY23 control point
remediation and H1 FY24 judgement areas including
commentary from the external auditor.
– Received the annual report on whistleblowing.
– Considered 2023 audit scope changes.
– Received an update on the DBT (BEIS) consultation
and internal controls project.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 85
Annual Report and Financial Statements 2024
Significant Matters Considered During the Year
Role of the Committee Responsibilities discharged Conclusion or action taken
Going concern and long-term viability
It is required that the Directors make statements
in the Annual Report as to the going concern and
longer-term viability of the Group.
The Committee reviewed reports from
management that assessed the impact of various
stress tests and longer-term business risks to
determine how the Group would be able to remain
viable through periods of liquidity or capital stress.
Following challenge of management on the
individual scenarios and impacts thereof, the
Committee agreed to recommend the going
concern and viability statement to the Board
for approval.
Control improvements and remediation
The Group continued its work to further enhance
its internal controls and considered the additional
requirements to be imposed on the Group arising
from the 2024 Code.
The Committee requested detailed and regular
progress updates from management in relation to
enhancements to the internal control framework.
The Committee requested to be kept informed on
the project to further improve internal controls and
continues to monitor progress on the proposed
implementation steps required.
Review of audit and control matters in key subsidiaries
A number of structural governance and audit
issues were identified in an operational subsidiary
that required engagement with the local regulator
and provision of additional resource to address
and resolve.
The Committee reviewed the list of audit issues
and met with the relevant local external audit
partners to ensure appropriate oversight of the
audit issues and approach to resolution. The
Committee was briefed on the requirements of the
local regulator to close the governance structure
and audit points to its satisfaction.
The Committee Chair and CFO conducted a site
visit to meet with local management to provide
support and agree the appropriate resource to
resolve the audit matters. The Committee received
updates relating to the local regulatory position and
will continue to provide oversight of the closure of
the audit issues within the deadline specified.
Oversight of CASS reporting
The appointment of a new Head of Investment
Operations and CASS, and the launch of the UK
Invest product, provided an opportunity to further
strengthen oversight of CASS matters.
The Committee now receives an update on CASS
matters at every meeting including developments
and improvements in client segregation
procedures.
The Committee has requested improvements in
CASS procedures.
Review of interim results and Annual Report and Financial Statements
The Committee is responsible for considering
the Annual Report and Financial Statements
and providing challenge to management and
the external auditor on significant accounting
judgements and treatments.
The Committee considered disclosures made in
the 2024 Annual Report and Financial Statements
and discussed significant areas with management
and the external auditor.
The main area of significant judgement considered
by the Committee was the capitalisation and
impairment assessment of the investment in
the cash equities business and investment in a
joint venture.
Paul Wainscott
Senior Independent Director and
Chair of the Group Audit Committee
20 June 2024
Group Audit Committee report continued
86 – CMC Markets plc
Annual Report and Financial Statements 2024
Clare Francis
Independent
Non-Executive
Directorand Chair
oftheGroup
RiskCommittee
Group Risk Committee report
Members and attendance
Clare Francis
Committee Chair
Susanne Chishti
Independent Non-Executive Director
Sarah Ing
Independent
Non-Executive Director
James Richards
Independent Group Chairman
Paul Wainscott
Independent Non-Executive Director
Attended meeting
Did not attend meeting held during tenure
Dear shareholder,
As the Chair of the Group Risk Committee (the “Committee”), I am pleased
to present the Committee report for the year ended 31 March 2024, which
describes our activities during the year.
The purpose of the Committee is to assist the Board in its oversight of risk,
including reviewing and monitoring the risk framework and appetite for the
Group, and reviewing the eectiveness of the Group’s risk management
systems and internal controls. The transition and diversification of the
business, both globally and through a product lens, is generating increased
risk which is reflected in the principal risks. These risks will continue to be
embedded within the course of the next financial year.
The responsibility for the Group’s Risk Management Framework and agreeing
the appropriate risk appetite sits with the Board. The Committee reviews and
advises the Board on changes to the Group’s risk appetite, advises on risk
strategy and monitors the eectiveness of, and improvements being made
to, the Group’s Risk Management Framework. The Committee ensures that
a robust risk culture continues to be embedded across the business and
actively monitors and discusses the latest risk and regulatory developments
aecting the Group.
The Group’s approach to risk management and how it evaluates and
manages the principal risks and uncertainties the Group faces is set out
within the Risk management section of the Strategic report as detailed on
pages 59 to 68.
During the year the Committee has considered the potential impacts of
continuing challenges arising from the external economic environment,
including inflationary pressures and higher interest rates and ongoing and
emerging geopolitical events. It has provided guidance, support and challenge
to management on how risks are managed and mitigated.
Consumer Duty remained a focus for the Committee during the year,
whilework continued to implement and embed the new duty in the Group’s
processes. The Committee received regular updates on the Group’s
Consumer Duty implementation plan and monitored the progress of the
project to deliver compliance with obligations.
The Committee has continued to consider the Group’s product diversification
and its geographical diversification in Dubai and Bermuda, including
regulatory requirements. The Committee also oversaw enhancements to
the Risk Management Framework and Risk Appetite Statement during the
year, continued to review the Group’s Enterprise Risk Management (“ERM”)
framework project, monitored changes in the regulatory landscape and
reviewed and made recommendations to the Board in respect of the Group’s
Internal Capital and Risk Assessment (“ICARA”), Internal Capital and Risk
Assessment (Liquidity) (“ICARA(L)”) and Contingency Funding Plan (“CFP”).
Principal responsibilities of the Group Risk Committee
The key responsibilities of the Committee include:
– monitoring the Group’s risk appetite, tolerance and strategy;
– review and recommendation of the Risk Appetite Statement and Risk
Management Framework;
– provision of advice and recommendations to the Board to assist in Board
decision making in relation to risk appetite and risk management;
– oversight of financial and liquidity risks including the responsibilities of the
risk management functions;
– review, challenge and recommendation to the Board with regard to the
Group ICARA, ICARA(L) and CFP;
– oversight of, and recommendations to the Board on, current risk exposures
and future risk strategy;
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 87
Annual Report and Financial Statements 2024
Main activities during the financial year
During the year, the Committee’s key activities included:
Principal responsibilities of the Group Risk
Committee continued
– consideration of the Group’s principal and emerging risks and related
disclosures in the Annual Report and Financial Statements;
– review of the risks associated with proposed strategic initiatives;
– approval of the annual risk plan;
– consideration of the Group’s compliance framework;
– review of risk taking by Directors and senior management as it impacts
theirremuneration incentives; and
– consideration of the Group’s compliance with regulations and how
management acts on any new obligations.
The Committee’s terms of reference can be found on the Group’s website
(www.cmcmarkets.com/group/about-us/governance/committees).
Composition and attendance
The Committee is chaired by Clare Francis, who is also the Group’s Consumer
Duty Champion, with James Richards, Susanne Chishti, Sarah Ing and Paul
Wainscott as members, all of whom were considered independent during the
year. James Richards ceased to be considered independent under the Code
from 1 April 2024 and accordingly he stepped down as a Committee member,
but remains an attendee, with eect from that date. Details of the skills and
experience of the Committee members can be found in their biographies on
pages 72 to 74.
The Committee held six scheduled meetings during the year under review and
attendance for the members is shown on page 87.
As part of the Board eectiveness review undertaken during the year, the Board
has assessed that the skills of the Committee members are appropriate in
providing oversight and challenge and that the Committee is operating eectively.
The Chief Executive Ocer, Deputy Chief Executive Ocer, Chief Financial
Ocer, Head of Asia Pacific & Canada and Company Secretary attend
Committee meetings by standing invitation. Representatives from other areas
of the business attend the Committee meetings by invitation as appropriate
to the matter under consideration. The Committee Chair also holds regular
individual meetings with the Executive Directors, the Company Secretary and
other relevant members of the Executive and senior management teams.
During the year the Committee Chair also met with Grant Thornton UK LLP,
to which third-line internal audit services are outsourced, and the external
auditor, Deloitte LLP.
Operation of the Committee
An annual Committee calendar is maintained, which is aligned with the
Committee’s terms of reference. The Chair of the Committee is supported in
preparing meeting agendas by the Company Secretary.
Following each Committee meeting, the Committee Chair reports to the
Board on its proceedings and the matters within its duties and responsibilities,
and makes recommendations to the Board and to other Board Committees,
as appropriate.
At management level, the Group has established an Executive Risk
Committee (“ERC”) within the Group’s governance framework. Reporting to
the Executive Committee, the purpose of the ERC is to assist the Executive
Directors in monitoring and assessing risk arising across the business and
external risk factors, and discussing appropriate mitigation plans and actions
to be taken in relation to significant and emerging risks. The risks discussed at
the ERC and the Executive Committee by the Executive Directors, as the first
line of defence, are then presented by the SMF4 to the Group Risk Committee.
Group Risk Committee report continued
May 2023
– Review of the ERM framework project.
– Robust assessment of the Group’s principal and emerging risks
andTCFD risks and opportunities.
– Annual review of eectiveness of the Group’s risk management
andinternal control systems.
– Review of the Annual Report and Accounts risk disclosures.
– Review of the annual risk plan.
– Annual planning for the Group ICARA and wind down plans.
– Update on the Consumer Duty implementation programme.
July 2023
– Review and approval of the Consumer Duty implementation.
– Review of the ERM framework project.
– Review of the Options project implementation.
– Consideration of the compliance update.
September 2023
– Review and recommendation of Group ICARA and the Contingency
Funding Plan.
– Review of the ERM framework project.
– Review of the Consumer Duty implementation programme.
– Approval of the Committee terms of reference.
November 2023
– Update on ERM framework project.
– Review and recommendation of principal risks and uncertainties
forthe half year.
– Review and recommendation of wind down plans.
– Review of annual non-BAU position limit summary report.
– Compliance update (including Consumer Duty).
– Review and recommendation of wind down plans.
January 2024
– Compliance update (including Consumer Duty).
– Review of the ERM framework project.
– Review and recommendation of the Group ERM Policy,
RiskManagement Framework and Risk Appetite Statement.
March 2024
– Review of Risk Appetite Statement metrics and escalation.
– Update on ERM framework project.
– Review of proposed Committee annual planner.
88 – CMC Markets plc
Annual Report and Financial Statements 2024
During the year, the Chief Risk Ocer left the Group and, while it was agreed
that she had performed a valuable role, in the context of the current Group-
wide restructuring and business simplification, it had been determined that
the Group CRO position would not be replaced. However, this would be kept
under regular review and monitored as business simplifications measures
were embedded. The CRO’s responsibilities have been reallocated amongst
the Executive team.
Risk Management Framework
During the year, the Committee reviewed enhancements to the Group’s risk
management systems following recommendations (as reported in the 2023
Group Risk Committee report) arising from the Group governance review
undertaken by Independent Audit Limited in 2021, which included a review
of the Group’s risk management systems, and a separately commissioned
external assessment of the Group’s ERM framework.
Following the transition to the Investment Firm Prudential Regime, (“IFPR”),
the FCA undertook a Supervisory Review and Evaluation Process (“SREP”).
As part of this the Committee engaged with the regulator and introduced
an enhanced liquidity, credit risk, stress testing and wind-down planning. To
support its oversight of the completion of the work, the Committee resourced
external consultancy support in addition to the standing internal audit
resource. The SREP was completed within the specified timeline.
Further details of these changes and the Group’s risk management systems
can be found in the Risk management section on pages 59 to 68.
Risk appetite and exposure
As part of its oversight of current risk exposures and future risk appetite
and strategy, the Committee reviews the risks associated with proposed
strategic transactions and the eectiveness of risk mitigation and
monitoringprocesses.
Throughout the year the Committee has monitored the Group’s top risks
and emerging risks. The Committee receives detailed management
reports throughout the year and routinely invites members of the senior
management team to present an overview of the risk management practice
and receives updates on key issues. In the financial year ended 31 March
2024 the Committee specifically discussed business resilience, people risk,
project delivery risk, IT security risk, financial performance and regulatory
risk. TheCommittee reviewed proposed changes to the Group Risk Appetite
Statement and Risk Management Framework and made recommendations
for Board approval of both documents. The Committee recommended the
Group’s ICARA, ICARA(L) and CFP to the Board for approval.
Risk management and internal controls
The Group Risk Committee and Group Audit Committee review internal
controls on behalf of the Board and receive reports from management, the
external and internal auditor, and functions such as Finance. The Chairs of
the Group Risk Committee and Group Audit Committee regularly brief the
Board on key matters discussed at these Committees. Throughout the year
ended 31 March 2024 and to date, the Group has operated a system of internal
control to provide reasonable assurance of eective operations covering
all material controls, including financial and operational controls. Processes
are in place to identify, evaluate and manage the principal risks facing the
Group. The Group Risk Committee received management’s assessment
of the eectiveness of internal controls, which included areas identified for
improvement, and concluded at its June 2024 meeting, acting as a Committee
of the Board, that, based on their assessment, the Group’s risk management
systems and internal controls were appropriate. The Board also considered
and supported this assessment.
Regulatory compliance
The Committee receives regular reporting of second-line compliance
assurance activity, details of regulatory change both in the UK and in other
jurisdictions that will have a significant impact on the Group, the assessment of
key financial crime controls and details of correspondence with our regulators.
In the year under review, this included the implementation of the FCA
Consumer Duty and engagement with local regulators in respect of a licence
application to establish an oshore entity, and meetings held with regard to
a number of audit issues identified in an operational subsidiary that require
additional resource to address and close within agreed timescales.
Priorities for financial year 2024/25
In the year ahead it is anticipated that geopolitical risk will remain heightened
and the challenging economic environment volatility will continue. The
Committee will pay close regard to impacts of the external environment
forourbusiness and customers, and focus on risks related to the Group’s
delivery of its strategic objectives.
The Committee will continue to constructively challenge management, will
ensure that a robust risk culture remains in place across the business and will
undertake deep dives on any areas of specific risk to inform its deliberations.
The Committee will maintain its active role in advising the Board on risk
matters and monitoring the risks associated with regulatory change and
theimpact that any changes could have on the Group.
Clare Francis
Independent Non-Executive Director
and Chair of the Group Risk Committee
20 June 2024
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 89
Annual Report and Financial Statements 2024
James Richards
Chairman and Chair
of the Nomination
Committee
Nomination Committee report
Members and attendance
James Richards
Committee Chair
Susanne Chishti
Independent Non-Executive Director
Clare Francis
Independent Non-Executive Director
Sarah Ing
Independent Non-Executive Director
Paul Wainscott
Independent Non-Executive Director
Attended meeting
Did not attend meeting held during tenure
Dear shareholder,
I am pleased to present the Nomination Committee (the “Committee”)
report, which summarises the work of the Committee during the year ended
31March 2024.
Throughout this period the Committee has continued its review of the
composition of the Board and succession planning at both Board and senior
management level, with changes made which will support the growth of the
business and strengthen our controls and risk processes.
Further information on our activities and our priorities for the next year is
provided on the following pages.
Principal responsibilities of the Nomination Committee
The Committee is responsible for keeping under review the composition of
the Board and senior management, succession planning, appointments to the
Board, the Board evaluation process, and the Group’s People Strategy.
Key roles and responsibilities of the Committee include:
– evaluating and reviewing the structure, size and composition of the Board
including the balance of skills, knowledge, experience and diversity of the
Board, and keeping under review the leadership needs of the Company to
ensure its continued ability to compete eectively in the marketplace;
– ensuring plans are in place for both an orderly and emergency succession
in relation to the Board and senior management and overseeing the
development of a diverse pipeline for succession, taking into account
the challenges and opportunities facing the Company and the skills and
expertise needed in the future;
– identifying and nominating suitable candidates for appointment to the
Boardincluding evaluating the balance of skills, knowledge, experience and
diversity on the Board and preparing a description of the role required for a
particularappointment;
– overseeing the Board evaluation process and, in analysing the results of the
evaluation, identifying whether there are any skill gaps or opportunities to
strengthen the Board;
– assessing the Board Directors’ conflicts of interest;
– assessing and keeping under review the independence, time commitment
andengagement of each of the Non-Executive Directors; and
– overseeing the Group’s People Strategy including talent management,
diversity and inclusion and workforce engagement.
The Committee’s full terms of reference are available on the Group’s website:
www.cmcmarkets.com/group/about-us/governance/committees.
90 – CMC Markets plc
Annual Report and Financial Statements 2024
Composition and attendance
The Committee is chaired by James Richards with Susanne Chishti, Clare
Francis, Sarah Ing and Paul Wainscott as members. All of the Committee’s
members, including the Chairman, were considered independent Non-
Executive Directors during the financial year. As noted on page 80, from 1 April
2024, the Chairman ceased to be considered independent. The Chairman
continued to chair the Committee and remained a member after 1 April 2024
as permitted by the 2018 UK Corporate Governance Code.
The Committee met seven times during the year under review and attendance
levels for the members are shown on page 90. In addition to the members of
the Committee, the Chief Executive Ocer, Deputy Chief Executive Ocer,
Chief Financial Ocer, Company Secretary and Group Head of Human
Resources attend by invitation when it is considered appropriate.
Board appointments
The Committee leads the process to consider Board appointments and
makes recommendations to the Board once appropriate candidates have
been found. The Committee will review the process for recruitment, including
whether an external search agency will be used, the role specification and
capabilities required for the role (taking into account the current balance of
skills and experience on the Board) and potential candidates both inside
and outside the organisation, ensuring a diverse pool of candidates are
considered. The Committee will also manage the structure of the interview
process, referencing requirements and engagement with the Board and other
Board Committees as appropriate.
During the year, the Committee recommended and the Board approved
the appointment of Albert Soleiman as Chief Financial Ocer, following the
resignation of Euan Marshall. The Committee set out the skills, knowledge
and experience required for the CFO position. The Committee considered
the selection process for the CFO and, taking into account the business
transformation that the Group was expected to make, expressed a preference
for an internal candidate already familiar with the business and organisational
structure. The Committee reviewed a number of internal candidates and, after
conducting an interview process, identified Albert as thepreferred candidate.
The Committee also discussed, without the Chairman present, the
succession arrangements for the Chairman once he reached nine-year
tenure on 1 April 2024. The Committee recommended to the Board, which
in turn has recommended to shareholders, that James be re-elected as
Chairman and a Director at the 2024 AGM. As the Chairman would no longer
be considered to meet the criteria for independence under the UK Corporate
Governance Code, it was agreed that he would step down as a member of the
Remuneration and Group Risk Committees but would remain as a standing
attendee to ensure continuity of information as Chairman of the Board. While
no longer considered to be independent under the Code, the Committee
continues to view James as providing independent guidance and insightful
and valuable input to the Board debate. Furtherinformation is provided
on page 92.
Shareholders have the opportunity to annually vote on resolutions proposing
each Director for re-election (or election if they have joined the Board since
the last AGM) at the AGM. Details of the Directors standing for election/
re-election at the 2024 AGM are included in the Notice of AGM and
information on each Director’s contribution to the Group is included in their
biography on pages 72 to 74 of this report. The Committee considers whether
to recommend Directors for election or re-election and has done so in relation
to all Directors standing at the 2024 AGM, including the Chairman, who will
have served on the Board for more than nine years after April 2024 (see page
80 for more information).
Main activities during the financial year
Agendas for scheduled Committee meetings are based on a
pre-agreed annual meeting planner to ensure that the Committee
fulfils its responsibilities in line with its terms of reference and
regulatory obligations.
March 2024
– Reviewed Board succession planning.
– Reviewed the employee engagement survey results.
– Approved an update to the Board Diversity Policy.
– Reviewed the Board.
May 2023
– Received an update from the designated NED for
workforceengagement.
– Reviewed updates on people matters and employee engagement.
– Determined Directors’ eligibility for re-election.
– Discussed Chairman succession (without the Chairman present).
September 2023
– Approved appointment of new CFO.
– Board evaluation update.
– Received an update from the designated NED for
workforceengagement.
November 2023
– Received an update from the designated NED for workforce
engagement.
– Received an update on diversity and inclusion, including the Group
Diversity and Inclusion Policies and the Board Diversity Policy.
– Noted an update on regulated roles.
February 2024
– Received an update from the designated NED for workforce
engagement.
– Considered the annual Board and Committee evaluation process.
– Reviewed the Board skills matrix.
August 2023
– CFO selection process.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 91
Annual Report and Financial Statements 2024
Board evaluation
The Committee is responsible for agreeing the annual Board and Committee
performance evaluation process, reviewing its results and reporting on the
conclusions and recommendations to the Board.
The Committee reviewed the outcomes and associated action plans for the
internally facilitated 2023 Board and Committee eectiveness evaluation.
The 2023 evaluation was conducted internally and led by the Chairman,
supported by the Company Secretary. The format of the process was a
questionnaire completed by all Non-Executive Board members seeking
narrative answers on a number of specific questions relating to the operation
of the Board and its Committees. This was supplemented by a more targeted
set of questions answered by the Executive members of the Board.
Based on the responses received, the Company Secretary prepared a
report which was discussed with the Chairman before being presented to
the Committee. The responses received were insightful and provided useful
feedback on the operation of the Board and its Committees, the topics
that should be a future focus and how the Board receives information from
management. A number of recommendations were made by the Committee
which will be taken forward over the remainder of 2024. Notwithstanding
these recommendations, it was agreed that the Board and its Committees
were operating eectively.
The Committee discussed the performance and time commitment of each
Non-Executive Director and agreed that they all continued to make the
expected contribution to the Board and its Committees and no concerns
wereraised in relation to their other commitments.
The Senior Independent Director led the Non-Executive Directors in
evaluating the performance of the Chairman at a meeting of the Nomination
Committee without James Richards present. The Nomination Committee
recommended, and the Board approved, the conclusion that the Chairman
continued to provide strong leadership to the Board. This conclusion
incorporated the position that James Richards ceased to be considered
independent under the 2018 UK Corporate Governance Code from 1
April 2024.
The next externally facilitated evaluation was due to be carried out in 2024.
Under Provision 21 of the Code, the annual evaluation exercise should
be externally evaluated at least every three years. During the year CMC
ceased to be a constituent of the FTSE 350. The Committee will reassess
the requirement for the 2024 Board evaluation on rejoining the FTSE 350
and report on this Board evaluation in the next Annual Report. In the interim,
the Committee assessed that the outcomes of the 2023 Board evaluation
remained relevant and appropriate, and would continue to implement the
findings of the 2023 evaluation.
People Strategy
The Committee has worked closely with the Executives to consider the
Group’s People Strategy, which is designed to align with the Group’s overall
strategy, purpose and values, and also has due regard to the environmental,
social and governance initiatives being undertaken by the Group and matters
raised by employees.
The Committee regularly receives updates from Susanne Chishti regarding
her activities as the NED for workforce engagement, and discusses the results
and key themes arising from the employee engagement survey conducted
during the year. The main areas of focus highlighted as a result of employee
engagement activities that have taken place across the business are included
in the Our Tomorrow section on pages 35 to 37.
The Committee continues to believe that the engagement methods used
to ensure that the Board is aware of the views of the wider workforce are
eective but does keep these under review and will seek to adapt them and
include additional engagement methods if it feels appropriate.
Succession planning
The Board considers succession planning at least annually, including the
tenure of Non-Executive Directors, the developing needs of the business and
any skills gaps to be filled in both the short and long term .The Committee also
considers the senior management team succession plan periodically, taking
into account the opportunities and challenges facing the Group and the skills,
experience and knowledge that will be needed in the future.
Succession planning will continue to be a focus over the course of the
remainder of 2024, with an emphasis on improving diversity in our pipeline.
The Committee met in May 2023 and February and March 2024 without
James Richards in attendance to discuss the succession of the Chairman,
who has served nine years on the Board in April 2024. Out of those nine
years, he served two years and nine months as a Non-Executive Director and
will have served six years and three months as Chairman. The Committee
recommended to the Board, which in turn has recommended to shareholders,
the re-election of James at the 2024 AGM, notwithstanding that his nine-year
tenure expires ahead of the 2024 AGM. As disclosed in last year’s Annual
Report, it is anticipated that James will stand down from the Board at the 2025
AGM. More information on the Company’s plans beyond this is included in the
Governance section on page 80.
Susanne Chishti announced that she would be stepping down from the
Board at the 2024 AGM. The process to identify a successor to Susanne,
and the nomination of a new Non-Executive for workforce engagement has
commenced, and will be a priority for the Committee in the coming months.
Diversity, equity and inclusion
The Committee recognises the benefits of diversity, equity and inclusion
(“DE&I”). The CMC Markets plc Board Diversity Policy recognises the benefits
of having a diverse senior management team and sees increasing diversity
at a senior level as an essential element in maintaining an eective Board. Our
policy is to ensure that there is broad experience and diversity on the Board
and the Audit, Nomination and Remuneration Committees. We consider
diversity to include age, ethnicity, disability, gender, sexual orientation and
socio-economic and geographic backgrounds. Appointments to the Board
are made on merit in the context of complementing and expanding the skills,
knowledge and experience of the Board as a whole.
The Committee reviews and assesses Board composition on behalf
of theBoard
and recommends the appointment of new Directors.
TheNomination Committee also oversees the conduct of the annual
reviewofBoard eectiveness.
In order to maintain an appropriate range and balance of skills, experience and
background on the Board, the Nomination Committee considers the benefits
of all aspects of diversity including, but not limited to, those described above
In identifying suitable candidates for appointment to the Board, the Nomination
Committee will consider candidates against objective criteria with due regard
for the benefits of the herein mentioned attributes and diversity on the Board.
As part of the annual performance evaluation of the eectiveness of the
Board, Committees and individual Directors, the Nomination Committee
considers the balance of skills, experience, independence and knowledge of
the CMC Group on the Board, and the diversity representation on the Board.
The Committee regularly discusses Board, senior management and
workforce diversity and how the Group’s position can be improved. More
information on our DE&I strategy and initiatives is included in the Our
Tomorrow section on page 33.
Our disclosures and statement on the diversity of our Board, senior Board
positions and executive management in compliance with Listing Rule 9.8.6R
(9) and Listing Rule 14.3.33R (1) are set out on page 93.
Nomination Committee report continued
92 – CMC Markets plc
Annual Report and Financial Statements 2024
The Listing Rules set the following targets:
– at least 40% of the Board are women;
– at least one of the senior Board positions (Chair, Chief Executive Ocer
(“CEO”), Senior Independent Director (“SID”) or Chief Financial Ocer
(“CFO”)) is a woman; and
– at least one member of the Board is from a minority ethnic background
(which is defined by reference to the categories recommended by the
Oce for National Statistics (“ONS”) as coming from a non-white ethnic
background).
The tables below show the data required to be presented by the Listing Rules.
This data shows that progress has been made from last year, reflecting that
Albert Soleiman identifies as “Other – Arabic”. We continue to recognise the
importance of diversity and, whilst ensuring that appointments continue to
be based on merit, give full and proper consideration to gender and racial
diversity as part of the appointments we make to the Board. In terms of gender
diversity, 60% of the Non-Executive representation on the Board is female.
Our overall Board diversity is negatively impacted by the fact that we have
four male Executive Directors. We feel we currently have the right people
fulfilling these Executive roles and have to accept the impact on our diversity
statistics of having a larger Executive team than some of our peers when
making comparisons on our progress. Whilst we do not feel it appropriate
to set ourselves goals to comply with these targets at present, as Board
composition should be driven by the specific needs of the Group and any
skillgaps, we continually review our position on this. The Board is committed
to seeking toimprove diversity and will continue to have regard to these
matters as partofour Board and senior management succession planning
and recruitment processes.
As referenced in the Our Tomorrow section, we have committed to setting
measurable targets to increase the diversity of the wider workforce which will
help create a pipeline to improve senior Executive diversity over time. Asat
31March 2024, 321 (29%) of our workforce of 1,071, excluding contractors,
were female.
Diversity data
Diversity data based on sex
Number of
Board members
Percentage of
Board
Number of senior
positions on the
Board (CEO, CFO,
SID and Chair)
Number in
executive
management
Percentage of
executive
management
Men 6 66.67 4 32 78.00
Women 3 33.33 — 9 22.00
Not specified/prefer not to say — — — — —
Diversity data based on ethnic background
Number of Board
members
Percentage of
Board
Number of senior
positions on the
Board (CEO, CFO,
SID and Chair)
Number in
executive
management
Percentage of
executive
management
White British or other white (including minority white groups) 8 88.9 3 14 34.00
Mixed/multiple ethnic groups — — — 2 4.87
Asian/Asian British — — — 2 4.87
Black/African/Caribbean/Black British — — — — —
Other ethnic group, including Arab 1 11.1 1 — —
Not specified/prefer not to say — — — 23 56.26
Notes:
1 All data is at 31 March 2024.
2 Executive management is represented by all direct reports of the Executive Directors in non-administrative roles.
3 Data is collected via self-reporting from employees on joining the Group by the completion of a questionnaire asking them to identify against various gender and ethnicity categories.
Priorities for financial year 2024/25
In the year ahead the Committee will focus on senior management succession and diversity, the People Strategy, ensuring actions arising from the Board
evaluation are appropriately implemented and considering the succession of the Chairman and the appointment of a new Non-Executive Director.
James Richards
Chairman and Chair of the Nomination Committee
20 June 2024
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 93
Annual Report and Financial Statements 2024
Sarah Ing
Independent
Non-Executive
Director and
Chair of the
Remuneration
Committee
Remuneration Committee report
Members and attendance
Sarah Ing
Committee Chair
James Richards
Independent Non-Executive Director
Paul Wainscott
Independent Non-Executive Director
Susanne Chishti
Independent Non-Executive Director
Clare Francis
Independent Non-Executive Director
Attended meeting
Did not attend meeting held during tenure
Note: Since the year end a further meeting was held on 2 May 2024 and
all five members attended.
Dear shareholder,
As Chair of the Remuneration Committee, I am pleased to present the
Directors’ remuneration report for the year ended 31 March 2024. This
report comprises three sections: first, my annual statement as Chair of the
Remuneration Committee; second, the proposed Remuneration Policy which
will be put for approval by shareholders at this year’s Annual General Meeting
(“AGM”); and third, the Annual report on remuneration which sets out how the
current Policy was implemented for the year ended 31 March 2024.
Remuneration in context
The Committee’s approach to governing Executive pay at CMC Markets is
to ensure a clear and rigorous focus on aligning pay with performance, but
equally to give due consideration to all our key stakeholders. The Committee
considers both corporate performance from a strategic and financial
perspective coupled with stakeholder experience.
Corporate performance
Strategic priorities
During the year the Group took important steps to enhance operational
eciency with global headcount reduction and cost review programme
driving synergies across product and business lines.
Our API ecosystem and world-leading financial markets technology was
critical in securing large B2B partnership wins in the year, and the trading
product suite with the rollout of options and addition of cash equities to our
institutional oering. The investing platform saw further development with
Invest UK rolling out mutual funds and SIPPs and launch of cryptocurrencies
on Invest Australia and continued expansion across new geographies and
markets with launch of CMC Invest Singapore, a growing footprint in the
Middle East with DIFC hub and renewed focus on European operations as a
lever for growth.
Financial performance
Net operating income of £332.8 million, up 15%, marks a new record high
outside the COVID-19 pandemic period with profit before tax of £63 .3 million
(2023: £52.2 million) and earnings per share up 13.6% to 16.7 pence.
Stakeholder experience
Our shareholders
As described below, the Committee reviewed the Remuneration Policy during
the year and carried out a shareholder engagement exercise in relation to this,
receiving broadly supportive feedback on the proposals.
Our employees
The Committee is responsible for reviewing the Group’s wider employee
remuneration policies and how reward aligns to the culture of the Group.
During the year, the Committee discussed the bonus allocation and salary
reviews for the wider workforce, reviewed and agreed the Group’s approach
to long-term incentives beyond the Executive Directors, reviewed the Group’s
gender pay gap data and the steps that could be taken to close the existing
gap, and discussed the operation of and participation in the Group’s all-
employee share plan.
94 – CMC Markets plc
Annual Report and Financial Statements 2024
During the year, all employees have been given the opportunity to participate
in our twice-yearly engagement surveys and provide feedback on all topics,
including remuneration. In addition, the Committee has received an update
on the initiatives we have undertaken to support and develop employees and
managers throughout the year. Susanne Chishti is the designated Non-
Executive Director with responsibility to engage and oversee engagement
with our employees and more detail on her activities is included in the
Nomination Committee report on page 92.
Remuneration in relation to the year ended
31March 2024
Throughout the year, the Committee has given careful consideration to
remuneration in the context of the external environment and the Group’s
performance. The outcomes for the specific reward elements are as follows:
Base salary – The salaries of David Fineberg and Matthew Lewis were
increased by 4.5% with eect from 1 June 2023, with these increases just
below the average increase of the wider workforce of 4.7%. No adjustment
was made to the salary of Peter Cruddas.
A one-o adjustment was made to the base salary of Euan Marshall from
£250,000 to £300,000 to reflect his significant development in the role
andcontribution.
Combined Incentive Plan (“CIP”) awards – The financial year ended 31 March
2023 was the fourth year of the implementation of the CIP and the plan was
assessed against Group financial, strategic and individual performance
targets, as approved by the Committee as follows:
– 60% based on financial performance;
– 30% based on strategic performance; and
– 10% based on achievement of personal and mandatory risk objectives.
For the financial performance element, the Group’s EPS of 16.7 pence which
was above the Target level of performance of 15.4 pence, resulting in an
outcome of 58.6% of maximum for this element. The full detail of the financial
targets is set out on page 97.
To determine the overall outcomes under the CIP, the Committee also
reviewed individual Executive Directors’ performance against their strategic
and personal objectives, which were set at the beginning of the year. The
Committee assessed each Executive Director against their strategic
objectives and determined whether these had been partially met, significantly
met, materially met or met. Further details of the objectives and performance
against them are set out on page 97.
This resulted in the Committee awarding 67.3% of potential award to the Chief
Executive Ocer, 65.9% to the Deputy CEO, 67.4% to the Chief Financial
Ocer and 67.5% to the Head of Asia Pacific & Canada.
The 2024 awards comprise a 40% cash award and a 60% share award in line
with the MIFIDPRU Remuneration Code. Share awards will be granted post
the release of the Group’s results for the year ended 31 March 2024. The share
awards will be assessed against a performance underpin after a further three-
year period ending 31 March 2027 and, if the underpin is achieved, continue to
vest until 2029.
Change in Directors
As announced on 7 July 2023, Euan Marshall resigned as Chief Financial
Ocer and stepped down from the Board with eect from 1 September 2023.
Albert Soleiman was appointed as Chief Financial Ocer from this date.
The Committee applied the Directors’ Remuneration Policy in determining
Euan Marshall’s remuneration arrangements. In line with the Policy, his
unvested CIP awards lapsed in full on leaving employment.
Remuneration arrangements for Albert Soleiman on appointment were in line
with the Remuneration Policy and consistent with those of Euan Marshall.
Review of the Remuneration Policy
The Remuneration Policy was approved by a shareholder vote of 99.65%
at the AGM in 2021. Under the relevant legislation, we are required to put a
revised Policy to shareholders every three years.
The Remuneration Committee has carefully considered the current Policy
and believes that it remains fit for purpose and so is proposing that the
revised Policy to be put to shareholders at the 2024 AGM will include only
minor tweaks.
The full proposed Policy is set out on pages 96 to 103 but comments on
specific points are included below:
– Combined Incentive Plan (“CIP”): The Committee is aware that the
structure of the CIP is not market typical. When first introduced, the rationale
behind this structure was that market volatility meant that the Committee
was not able to set three-year performance targets with sucient certainty
that they would remain appropriately stretching yet achievable for the
full period. Although still challenging, setting annual performance targets
was more achievable and the structure of the CIP aimed to combine the
achievement of stretching annual performance with substantial long-term
deferral subject to a performance underpin to provide alignment with the
long-term experience of shareholders.
Given current market uncertainty, the Committee believes that this
structure continues to provide strong alignment between pay and short
and long-term performance and remains the right approach for the
Remuneration Policy.
It is proposed that the maximum opportunity level under the Policy for
Executive Directors other than the CEO will be increased from 300% to
350%. No change is proposed to the maximum opportunity level for the
CEO. The change will allow the Committee appropriate flexibility over the
course of the next Policy period to ensure that Executives are appropriately
and competitively incentivised to deliver successful performance
outcomes in the coming years. The Committee will decide on an annual
basis the opportunity level within the Policy maximum that will be operated
in a given financial year. The Committee will continue to ensure that
performance targets are set so that they are stretching and the opportunity
under the plan will only be realised where significant performance is
achieved, aligned with the creation of value for shareholders.
– ESG and Consumer Duty: The proposed Policy will allow the Committee
flexibility in terms of implementation each year for CIP measures,
weightings and targets based on evolving strategic priorities, potentially
including a focus on ESG metric(s) aligned to our sustainability strategy.
The FCA’s Consumer Duty requirements will be incorporated with a formal
consideration of this after the one-year performance period and as part of
the long-term performance underpin assessment.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 95
Annual Report and Financial Statements 2024
Remuneration Committee report continued
Review of the Remuneration Policy continued
– Management Equity Plan (“MEP”): The 2015 MEP will come to the
end of its ten-year life in 2025 and the Committee believes that it would be
prudent to seek shareholder approval of a new plan under broadly similar
terms at the same time as the new Policy. For Executive Directors under
the current Policy, MEP awards may only be granted by the Committee to
facilitate external recruitment. The replacement plan will similarly only be
available for recruitment purposes under the proposed new Policy.
The Committee carried out a consultation exercise with our largest
shareholders to seek feedback on the proposed Policy. Investors consulted
were broadly supportive of the proposals.
Remuneration in relation to 2025
The Committee has decided not to make salary adjustments for the Executive
Directors with eect from 1 June 2024.
The Committee proposes to continue to use Group financial, strategic and
individual performance against targets for the 2024 financial year as the
basis on which the combined incentive will be awarded. The performance
measures applied to the CIP will be:
– 60% financial performance;
– 30% strategic performance; and
– 10% personal objectives.
In relation to the financial target, the Committee has ensured that a suciently
stretching range has been set by taking account of a number of internal and
external reference points and the impact of regulatory change. The target
range is considered commercially sensitive and so will be disclosed in next
year’s Annual Report. With regard to the strategic and personal objectives,
these will be evaluated based on quantitative measurable objectives in the
significant majority of cases. Again, these are considered commercially
sensitive so detailed disclosure of these quantitative performance measures
and associated outcomes will be included in the 2025 Annual Report and
Financial Statements.
In order to comply with the MIFIDPRU Remuneration Code, CIP awards will be
made 40% in cash and 60% in shares.
I hope you find this report provides a clear understanding of the Committee’s
approach to remuneration and that you will be supportive of the resolutions
relating to remuneration at the 2024 AGM.
Sarah Ing
Independent Non-Executive Director and Chair of the
RemunerationCommittee
20 June 2024
Directors’ Remuneration Policy
The Committee has undertaken a review of the Remuneration Policy that was approved by shareholders at the AGM held on 29 July 2021 and concluded
it remains aligned with CMC Markets’ strategy. The new Policy set out below will be put to shareholders for approval at the 2024 AGM, therefore, remains
substantially the same as the 2021 Policy. The changes primarily reflect incorporation of the FCA’s Consumer Duty requirements and an increase in the
Maximum Award to 350% of salary. Further details are available in the Committee Chairs letter on page 95.
Policy table
The below table summarises the key components of the Remuneration Policy for the Executive Directors.
Purpose and link to strategy Operation Maximum opportunity Performance measures
Base salary
To reflect the market value
of the role and individual’s
experience, responsibility
andcontribution.
The Policy is for base salary to be competitive.
In making this assessment the Committee has
regard for:
– the individual’s role, responsibilities and experience;
– business performance and the external
economic environment;
– salary levels for similar roles at relevant
comparators; and
– salary increases across the Group payable in cash.
Salaries are reviewed on an annual basis, with any
increase normally taking eect from 1 June.
Executive Director salary increases
will normally be in line with those
awarded to the wider employee
population.
Increases may be above this level
if: (i) there is an increase in scale,
scope or market comparability of
the role; and/or (ii) an Executive
Director has been promoted or has
had a change in responsibilities.
Where increases are awarded
in excess of the wider
employee population, the
Committee will provide an
explanation in the relevant year’s
Remuneration report.
Business performance is
considered in any adjustment to
base salary.
Pension
To provide competitive
retirement benefits.
Executive Directors participate in a defined
contribution pension scheme or may receive
acashallowance in lieu.
Aligned to the all-employee
maximum employer contribution
level, which is currently 7% in the
UK and 11.5% in Australia. This is in
alignment with Provision 38 of the
UK Corporate Governance Code.
Not applicable.
96 – CMC Markets plc
Annual Report and Financial Statements 2024
Purpose and link to strategy Operation Maximum opportunity Performance measures
Share Incentive Plan (“SIP”)
To encourage broad
employee share ownership.
In line with HMRC rules, Executive Directors are
entitled to participate in the SIP on the same terms
as other employees.
In line with HMRC permitted limits. Not applicable.
Benefits
To provide market
competitive benefits.
Benefits include life insurance, permanent health
insurance, private medical insurance, dental
insurance, health screening/assessment, critical
illness insurance, interest-free season ticket loans,
gym membership, eye tests, cycle to work, childcare
vouchers, dining card, travel insurance and club
membership.
Where appropriate, other benefits may be oered
including, but not limited to, allowances for relocation
and other expatriate benefits to perform their role.
Benefits may vary by role and
individualcircumstances and are
reviewed periodically to ensure they
remain competitive.
The maximum value of the benefits
is unlikely to exceed 10% of salary.
Not applicable.
Combined Incentive Plan
(“CIP”)
To ensure that incentives
are fully aligned to the
Group’s strategy.
The value of an award will be determined based on
performance achieved in the previous financial year
against defined financial and strategic targets.
Performance conditions and targets are reviewed
prior to the start of the year to ensure they are
appropriate and stretching and reinforce the business
strategy. At the end of the year the Committee
determines the extent to which these were achieved.
The award will be delivered as follows:
Cash award: 40% of the award will be settled in cash
as soon as practicable following the financial year.
Deferred Shares: 60% of the award will be deferred
into shares for up to five years following the financial
year. This portion of the award will vest subject to the
achievement of a three-year performance underpin
to ensure the deferred portion of the award is
warranted based on sustained success.
Subject to the achievement of the performance
underpin and continued service, the Deferred Share
portion of the award will vest over a period of at least
five years. For 2024/25, it is anticipated this will be
as follows, although the Committee will continue to
monitor both market and regulatory developments
in respect of vesting and holding periods and may
for future awards adjust the vesting schedule:
– 40% after three years
1
;
– 30% after four years
1
; and
– 30% after five years
1
.
The combined incentive awards are discretionary.
Dividend equivalents may accrue on the Deferred
Share portion of the award and be paid on those
shares that vest.
Awards under the CIP are non-pensionable and
are subject to malus and clawback for a seven-year
period from grant in the event of a material financial
misstatement, gross misconduct, calculation error,
failure of risk management, material reputational
damage or any other circumstance the Committee
considers appropriate.
1 Four, five and six years in total respectively allowing for the one-year
performance period to determine the deferred award amount.
Participants in the CIP will include
the Executive Directors.
Executive Directors
(excluding CEO):
Awards may be up to 350% of
salary, delivered as follows:
– cash award: 140% of salary
(120% of salary from 2023); and
– Deferred Shares: 210% of salary
(180%of salary from 2023).
Current CEO:
In respect of the current CEO, Peter
Cruddas, awards may be made only
up to 135% of salary. From 2023
40% of the award has been made in
cash and 60% deferred into shares.
Performance is assessed against
Group and individual performance
measures as considered
appropriate by the Committee.
Financial performance will account
for at least 60% of an award. For
this portion, 25% of the maximum
would be payable for performance
at threshold level and 50% for
target performance.
It is anticipated that the
performance measures applied in
2024/25 will be:
– 60% financial: based on
achievement of absolute
earnings per share targets;
– 30% strategic: based on the
achievement of measurable
objectives against targets
relating to strategic business
development milestones; and
– 10% personal objectives.
The Deferred Share portion will
vest subject to a performance
underpin measured over a period
of at least three years starting
from the end of the year used
to determine the amount of the
award. The Committee will review
Group performance over the
relevant period, taking into account
factors such as: a) the Company’s
TSR performance; b) aggregate
profit levels; and c) any regulatory
breaches during the period or
any other such factor that the
Committee considers appropriate,
which may include personal
performance of the relevant
Executive Director.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 97
Annual Report and Financial Statements 2024
Purpose and link to strategy Operation Maximum opportunity Performance measures
2024 Management
EquityPlan (“MEP”)
To reinforce delivery of
sustained long-term success
and align the interests of
participants with those
ofshareholders.
In respect of Executive Directors, LTIP awards may
only be granted by the Remuneration Committee to
facilitate external recruitment, i.e. to be used as the
vehicle for buying out incentive awards forfeited on
leaving a previous employer as per the recruitment
policy set out below. Awards may consist of
performance shares (nil cost options or conditional
rights to receive shares) or market value options or a
combination of the two.
LTIP awards normally vest after three years.
TheCommittee may extend the LTIP time horizon by
introducing a holding period of up to two years or by
extending the vesting period, e.g. if regulations require.
The number of performance shares and/or options
vesting is dependent on the degree to which any
performance conditions attached to the LTIP award
have been met over the performance period.
Dividend equivalents may accrue on performance
shares and be paid on those shares which vest.
The award levels and performance conditions
arereviewed in advance of grant to ensure they
areappropriate.
Awards under the LTIP are non-pensionable and
are subject to malus and clawback provisions for a
seven-year period from grant in the event of a material
financial misstatement, gross misconduct, calculation
error, failure of risk management or in any other
circumstance the Committee considers appropriate.
125% of salary in normal circumstances
and up to 200% of salary in exceptional
circumstances or an equivalent
economic value where an award is a
combination of shares and options.
Vesting for threshold performance
in respect of any performance share
awards is up to 25% of maximum.
Awards will generally vest
subject to the Company’s
performance and continued
employment.
The Committee has flexibility
to adjust any performance
measures and weightings
in advance of each future
award cycle to ensure
they continue to support
delivery of the Company’s
strategy. Over the term of this
policy, performance will be
predominantly dependent
on financial and/or share
price-related measures.
The Committee has flexibility
to adjust downwards the
formulaic outcome based on
its assessment of underlying
performance, and results
being achieved within the
Company’s risk appetite,
overthe performance period.
Notes to the Policy table
In addition to the elements of remuneration detailed in the Policy table, any historical awards or commitments described in this report which were made prior to,
but due to be fulfilled after the approval and implementation of, the Remuneration Policy detailed in this report will be honoured.
Shareholding guidelines
Executive Directors are required to build up a holding of 200% of base annual salary. Executive Directors will be required to build up to this level over a period
of five years, starting from the date of our listing in 2016 for the Executive Directors who were in role at the time the 2018 Remuneration Policy was approved
and from the date of appointment for any recruits since that time or in future. Executive Directors will be expected to retain at least 50% of shares vesting (net of
tax) until the guideline level is achieved. For the purposes of satisfying the shareholding requirement, shares held by a connected person (e.g. a spouse) will be
considered to be included.
A post-employment shareholding requirement will apply of 200% of base annual salary (or the actual shareholding at date of exit if lower) for a period of two years
after leaving employment.
Dividend equivalents
Dividend equivalents are payable on the Deferred Share portion of the combined incentive.
Clawback and malus provisions
Awards under the CIP and LTIP will be subject to provisions that allow the Committee to withhold, reduce or require the repayment of awards after vesting if there
is found to have been: (a) material misstatement of the Company’s financial results; (b) gross misconduct on the part of the award holder; or (c) any other material
event as the Committee considers appropriate.
Remuneration Committee report continued
Directors’ Remuneration Policy continued
Policy table continued
98 – CMC Markets plc
Annual Report and Financial Statements 2024
Risk considerations
The Remuneration Policy is also designed to promote sound and eective risk management. The Remuneration Committee reviews and approves the
Remuneration Policy for all employees, including for Material Risk Takers and senior risk and compliance employees, to help ensure pay arrangements
encourage appropriate behaviour and compliance with the Company’s risk appetite. For example, all employees receive a salary which reflects their market
value, responsibilities and experience. An individual may only receive an annual incentive award if they operate within the risk appetite of the Company and
have demonstrated appropriate behaviour. Key senior managers are eligible for consideration of LTIP awards, with any vesting based on performance over at
least two years. The Committee has flexibility to adjust the formulaic outcome if the Company’s recorded performance is not a genuine reflection of underlying
business performance or if results were not achieved within the Company’s risk appetite. CIP awards are subject to malus and clawback for all participants in
various circumstances, including a failure of risk management. The Chief Financial Ocer is closely involved in the remuneration process to ensure that both
Remuneration Policy and outcomes reinforce compliance with the Company’s risk appetite, including reporting independently to the Committee at least annually
on compliance with the risk appetite, on any notable risk events and on the behaviour of the Material Risk Takers.
Incentive plan discretions
The Committee will operate the Company’s incentive plans according to their respective rules and the Policy set out above, and in accordance with relevant
financial services regulations, the Listing Rules and HMRC rules where relevant.
Following amendments in 2019 the CIP specifically includes relevant clauses to ensure the Remuneration Committee is able to use its discretion to reduce the
value of a cash award or the number of shares to a share award or the extent to which a share award will vest, to avoid an otherwise formulaic outcome.
In line with common market practice, the Committee retains discretion as to the operation and administration of these incentive plans, including:
– who participates;
– the timing of grant and/or payment;
– the size of an award and/or payment (within the plan limits approved by shareholders);
– the manner in which awards are settled;
– the choice of (and adjustment of) performance measures and targets in accordance with the Remuneration Policy set out above and the rules of each plan;
– in exceptional circumstances, amendment of any performance conditions applying to an award, provided the new performance conditions are considered fair
and reasonable, and are neither materially more nor materially less challenging than the original performance targets when set;
– discretion relating to the measurement of performance in the event of a variation of share capital, change of control, special dividend, distribution or any other
corporate event which may aect the current or future value of an award;
– determination of a good leaver (in addition to any specified categories) for incentive plan purposes, based on the rules of each plan and the appropriate
treatment under the plan rules; and
– adjustments required in certain circumstances (e.g. rights issues, share buybacks, special dividends, other corporate events, etc.).
Any use of the above discretions would, where relevant, be explained in the Annual report on remuneration. As appropriate, it might also be the subject of
consultation with the Company’s major shareholders.
Performance measurement selection
The Company’s incentive plans are designed to incentivise the achievement of demanding financial and business-related objectives, using a balance of
measures which could include absolute and relative performance measures, as appropriate, selected to support the Group’s key strategic priorities.
The CIP is designed to align the interests of our participants with the longer-term interests of the Company’s shareholders by rewarding them for delivering
sustained increases in shareholder value within the Group’s risk appetite. CIP performance measures selected reinforce the Group’s strategy over the medium
to long term, and provide a balance of internal and external perspectives. The Committee has selected EPS as the primary measure as this is a widely accepted
measure of bottom-line financial performance and is well aligned with shareholder interests. Performance measures and targets are reviewed by the Committee
ahead of each performance period to ensure they are appropriately stretching and achievable over the performance period.
The CIP strengthens the alignment of pay with the measures of performance that are important in creating value for shareholders and also forms a strong
retention and motivation mechanism for Executives. The performance measures selected are a combination of financial performance, strategic performance
and individual objectives. The achievement of these performance measures will be reviewed by the Committee ahead of any award and the vesting of share
awards will be subject to the achievement of a performance underpin over the vesting period.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 99
Annual Report and Financial Statements 2024
Directors’ Remuneration Policy continued
Executive Directors’ remuneration scenarios
The charts below provide estimates of the potential future reward opportunity for each of the four Executive Directors and the implied split between the dierent
elements of remuneration under three dierent performance scenarios: “Minimum”, “On target” and “Maximum”.
100%
25%
36%
38%
31%
22%
47%
25%
18%
57%
100%
36%
38%
300
825
25%
31%
22%
47%
25%
18%
57%
1,350
1,665
100%
16%
24%
60%
23%
34%
43%
20%
44%
36%
Peter Cruddas
Minimum On target Maximum Maximum +50%
with share
price growth
2,500
2,500 2,500
2,500
2,000
2,000 2,000
2,000
1,500
1,500 1,500
1,500
£’000£’000
£’000 £’000
1,000
1,000 1,000
1,000
500
500 500
500
0
0 0
0
CIP cash element CIP share element
Fixed remuneration
Albert Soleiman
Minimum On target Maximum
Matthew Lewis
Minimum On target Maximum
100%
26%
38%
36%
47%
31%
22%
57%
25%
18%
Minimum On target Maximum
David Fineberg
700
1,173
1,645
1,928.5
365.75
1,005.80
1,645.85
2,029.88
313.5
862
1,410.5
1,739.6
Remuneration Committee report continued
Assumptions underlying each element of remuneration are provided in the table below.
Component Minimum On target Maximum
Maximum with
share price growth
Fixed
Base salary Latest salary n/a n/a n/a
Pension Contribution applies to
latestsalary
n/a n/a n/a
Other benefits As presented as a single
figure on page 106
n/a n/a n/a
Combined incentive
No payment 50% of maximum 100% of maximum 100% of maximum with
50% growth in share price
The column headed “Maximum with share price growth” is the maximum figure but includes share price growth of 50% for any part of the CIP paid in shares.
Otherwise, the projected value of the deferred element of the combined incentive excludes the impact of share price growth and any potential dividend accrual.
Actual remuneration delivered, however, will be influenced by these factors. Deferred awards are subject to continuing employment.
Maximum +50%
with share
price growth
Maximum +50%
with share
price growth
Maximum +50%
with share
price growth
100 – CMC Markets plc
Annual Report and Financial Statements 2024
Remuneration Policy for new hires
In the case of hiring or appointing a new Executive Director, the Committee may make use of all the existing components of remuneration.
The salaries of new appointees will be determined by reference to their role and responsibilities, experience and skills, relevant market data, internal relativities
and their current salaries. New appointees will be eligible to receive a pension contribution or allowance and benefits and participate in the Company’s HMRC
approved all-employee Share Incentive Plan, in line with the Remuneration Policy.
New appointees will be entitled to participate in the CIP, as described in the Policy table, with the relevant maximum being pro-rated to reflect the period served.
The Deferred Share portion of a new appointee’s combined incentive award will normally vest on the same terms as other Executive Directors, as described in the
Policy table. Individual objectives will be tailored to the individual’s role.
In determining appropriate remuneration for a new Executive Director, the Committee will take into consideration all relevant factors (including quantum, nature
of remuneration and the jurisdiction from which the candidate was recruited) to ensure that the remuneration arrangements are appropriate and in the interests
of the Company and its shareholders. The Committee may consider it appropriate to “buy out” incentive arrangements forfeited by an Executive on leaving a
previous employer and may exercise the discretion available under Listing Rule 9.4.2 if necessary. In doing so, the Committee will ensure that the value of any
buyout will as closely as possible mirror the expected value of awards forgone (taking into account progress against any performance conditions attached), and
take into consideration the timeframe, performance conditions attached and type of award forgone when constructing a buyout award. Buyout awards will be
subject to continued employment over the performance period.
In cases of appointing a new Executive Director by way of internal promotion, the Remuneration Committee will be consistent with the Policy for external
appointees detailed above. Where an individual has contractual commitments made prior to their promotion to Executive Director level, the Company will
continue to honour these arrangements.
In the case of hiring or appointing a new Non-Executive Director, the Committee will follow the Policy as set out in the table on page 103.
Service contracts
The Executive Directors are employed under contracts of employment with CMC Markets UK plc. The principal terms of the Executive Directors’ service
contracts are as follows:
Executive Director Position Effective date of contract
Notice period from
Company Notice period from Director
Peter Cruddas Chief Executive Officer 1 February 2016 12 months 12 months
Albert Soleiman Chief Financial Officer 1 September 2023 6 months 6 months
David Fineberg Deputy Chief Executive Officer 1 February 2016 6 months 6 months
Matthew Lewis Head of Asia Pacific & Canada 1 November 2019 6 months 6 months
The terms shown in the table above are in line with the Company policy of operating notice periods of up to nine months in the case of Executive Directors, except
for the CEO service contract which can have a notice period of up to 12 months. All employees including Executive Directors are subject to a six-month probation
period. The contracts have no fixed duration.
Executive Directors’ contracts are available to view at the Company’s registered oce.
Letters of appointment are provided to the Chairman and Non-Executive Directors. Non-Executive Directors have letters of appointment, which means that
they retire at each AGM and are put up for re-election at the AGM. Non-Executive Directors’ letters of appointment are available to view at the Company’s
registered oce.
Non-Executive Directors are all on a three-month notice period. Details of the eective date of Non-Executive Directors’ letters of appointment are set out below:
Non-Executive Director Date of initial letter Date of latest letter Date of appointment
James Richards 20 October 2014 16 February 2018 1 April 2015
Sarah Ing 7 July 2017 7 July 2017 14 September 2017
Paul Wainscott 11 July 2017 11 July 2017 19 October 2017
Susanne Chishti 1 June 2022 1 June 2022 1 June 2022
Clare Francis 14 December 2022 14 December 2022 19 December 2022
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 101
Annual Report and Financial Statements 2024
Directors’ Remuneration Policy continued
Exit payment policy
The Company considers termination payments on a case-by-case basis, taking into account relevant contractual terms, the circumstances of the termination
and any applicable duty to mitigate. In such an event, the remuneration commitments in respect of Executive Directors’ contracts could amount to salary, benefits
in kind and pension rights during the notice period, together with payment in lieu of any accrued but untaken holiday leave, if applicable.
The Committee would apply general principles of mitigation to any payment made to a departing Executive Director and would honour previous commitments as
appropriate, considering each case on an individual basis.
The table below summarises how the awards under the Combined Incentive Plan and LTIP are typically treated in dierent leaver scenarios and on a change of
control. The Committee retains discretion on determining “good leaver” status, but it typically defines a “good leaver” in circumstances such as retirement with
agreement of the Board, ill health, injury or disability, death, statutory redundancy, or part of the business in which the individual is employed or engaged ceases to
be a member of the Group. Final treatment is subject to the Committee’s discretion.
Event Timing of vesting/award Calculation of vesting/payment
CIP
“Good leaver” On normal vesting date (or earlier at the
Committee’s discretion).
Unvested awards vest to the extent that any performance conditions
have been satisfied and are pro-rated to reflect the proportion of the
vesting period served.
“Bad leaver” Unvested awards lapse. Unvested awards lapse on cessation of employment.
Change of control
1
On the date of the event. The Committee will determine the level of vesting, taking account of
the extent to which performance conditions have been or are likely
to be satisfied and, unless the Committee decides otherwise, the
proportion of the vesting period served.
LTI P
“Good leaver” On normal vesting date (or earlier
at the Committee’s discretion).
Unvested awards vest to the extent that any performance conditions
have been satisfied and are pro-rated to reflect the proportion of the
vesting period served.
“Bad leaver” Unvested awards lapse. Unvested awards lapse on cessation of employment.
Change of control
1
On the date of the event. The Committee will determine the level of vesting, taking account of
the extent to which performance conditions have been or are likely
to be satisfied and, unless the Committee decides otherwise, the
proportion of the vesting period served.
1 In certain circumstances, the Committee may determine that any Deferred Share awards under the annual incentive and both unvested and any deferred awards under the LTIP and CIP will not vest on a change of
control and instead be replaced by an equivalent grant of a new award, as determined by the Committee, in the new company.
Upon exit or change of control, SIP awards will be treated in line with the approved plan rules.
If employment is terminated by the Company, the departing Executive Director may have a legal entitlement (under statute or otherwise) to additional amounts,
which would need to be met. In addition, the Committee retains discretion to settle other amounts reasonably due to the Executive Director, for example to
meet the legal fees incurred by the Executive Director in connection with the termination of employment, where the Company wishes to enter into a settlement
agreement (as provided for below) and, in which case, the individual is required to seek independent legal advice.
In certain circumstances, the Committee may approve new contractual arrangements with departing Executive Directors including (but not limited to) settlement,
confidentiality, restrictive covenants and/or consultancy arrangements. These will be used sparingly and only entered into where the Committee believes that it is
in the best interests of the Company and its shareholders to do so.
Consideration of conditions elsewhere in the Group
In making remuneration decisions, the Committee takes into account the pay and employment conditions of employees across the Group. In particular, the
Committee considers the range of base pay increases across the Company as a factor in determining the base salary increases for Executive Directors. The
Committee does not consult with employees on the Executive Directors’ Remuneration Policy nor does it use any remuneration comparison measurements.
Remuneration Policy for other employees
CMC Markets’ approach to annual salary reviews is consistent across the Group. All employees are eligible to participate in the annual incentive award scheme
or an equivalent scheme, with targets appropriate to their organisational level and business area. Key senior managers are also eligible for LTIP awards to further
support long-term alignment with shareholder interests.
Remuneration Committee report continued
102 – CMC Markets plc
Annual Report and Financial Statements 2024
Consideration of shareholder views
The Committee is committed to an ongoing dialogue on Directors’ remuneration. It is the Remuneration Committee’s intention to consult with major shareholders
prior to any major changes to its Remuneration Policy. As part of the renewal process we correspond with all significant shareholders to seek their views on
proposed changes.
Group’s Remuneration Policy for Chairman and Non-Executive Directors
The Board determines the Remuneration Policy and level of fees for the Non-Executive Directors, within the limits set out in the Articles of Association.
TheRemuneration Committee recommends the Remuneration Policy and level of fees for the Chairman of the Board. Full details of the current fees paid can be
found on Page 113. The Group’s policy is:
Purpose and link to strategy Operation Maximum opportunity Performance measures
Fees are set to attract
suitable individuals with a
broad range of experience
and skills to oversee
shareholders’ interests and
Company strategy.
Furthermore fees are set to
reflect market value of the
role and the individual’s time
commitment, responsibility,
performance and
contribution.
Annual base fee for the Chairman .
Annual base fee for the Non-Executive Directors.
Additional fees are paid to Non-Executive Directors
for additional services such as chairing a Board
Committee, performing the role of Senior Independent
Director, etc.
Fees are reviewed from time to time taking into
account time commitment, responsibilities and fees
paid by companies of a similar size and complexity. Fee
increases are then applied in line with the outcome of
the review.
Expenses
The Company may reimburse NEDs in cash for
reasonable expenses (including any tax due thereon)
incurred in carrying out their role.
Fee increases are applied in line with the
outcome of the review.
Aggregate fees will not exceed the limit
approved by shareholders in the Articles of
Association, which is currently £750,000.
Not applicable.
Minor changes
The Committee may make minor amendments to the Policy set out above (for regulatory, exchange control, tax or administrative purposes or to take account
ofachange in legislation) without requiring prior shareholder approval for that amendment.
Annual report on remuneration
Principal responsibilities of the Remuneration Committee
The Committee is responsible for determining the Remuneration Policy for the Executive Directors and ensuring that incentive payments are aligned to the
Company’s purpose, values and strategy in order to promote long-term sustainable success. The Committee is also responsible for setting the remuneration
of the Chairman of the Board and members of the senior leadership team, including the Company Secretary, and overseeing the remuneration framework and
practices for the wider workforce.
The main role and responsibilities of the Remuneration Committee are:
– reviewing and agreeing appropriate Remuneration Policies which comply with all relevant regulations;
– reviewing and determining the remuneration of the Executive Directors and the senior management team, having regard to remuneration of the wider
CMCworkforce;
– reviewing and ensuring that incentive payments to Executive Directors are linked to the achievement of stretching financial performance and both strategic
and individual agreed objectives;
– ensuring that remuneration incentivises and aims to retains key employees including the Executive Directors and senior management;
– ensuring that Executive remuneration is linked to the delivery of the long-term success of the Company;
– having oversight of the operation of remuneration arrangements across the CMC Group through regular review of “management” information including
gender-related data;
– reviewing any major changes to employee benefit structures, including new share schemes, and ensuring that shareholders are consulted and the required
approval processes are followed;
– reviewing the appropriateness of remuneration against the risk management strategy following advice from the Group Risk Committee; and
– oversees the adherence of all relevant regulations relating to Executive Director remuneration.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 103
Annual Report and Financial Statements 2024
Main activities during the financial year
May 2023
– Overview of corporate salary review and bonus allocation for 2023.
– Consideration of CIP and MEP performance conditions.
– Senior management performance and consideration of LTIP awards.
– Reviewing the draft Directors’ remuneration report.
– Consideration of Executive Director performance and CIP awards.
– Indicative vesting of 2021 MEP awards.
– Confirmation of the appointment of the Company Secretary.
July 2023
– Approving the grant and vesting of incentive schemes.
– Approving 2024/25 Executive Director performance objectives.
November 2023
– Initial discussions regarding the review of the Executive Directors’
Remuneration Policy.
– Considering diversity and inclusion targets.
– Approving 2023/24 performance objectives for the newly appointed CFO.
– Receiving H1 2024 performance management update for Executive Directors.
– Approving the reappointment of remuneration consultants.
January 2024
– Discussion on the FCA letter to RemCo chairs and the EU Pay
Transparency Directive.
– Update on renewal of Executive Remuneration Policy and agreement to
the letter to shareholders.
– Consideration of the CIP performance underpin.
– Consideration of remuneration matters arising from senior hires and exits.
February 2024
– Discussing indicative performance review ratings for business teams/
senior sta.
March 2024
– Consideration of fair pay analysis and gender pay reporting 2023/24.
– Discussion of the proposed bonus pool for 2024 and corporate
salary review.
– Discussion on Executive Director performance.
Remuneration Committee report continued
Annual report on remuneration continued
Committee composition, attendance and advisers
The Committee is chaired by Sarah Ing with James Richards, Paul Wainscott, Susanne Chishti (from 1 June 2022) and Clare Francis (from 19 December 2022)
asmembers, all of whom are considered independent.
The Committee held seven scheduled meetings in the financial year, and attendance by Committee members is shown on page 94.
During the year, the Committee was advised by independent remuneration consultants Willis Towers Watson (“WTW”) on various remuneration matters
including providing advice on all elements of remuneration for the Executive Directors, the Remuneration Policy and best-practice and market updates.
WTWisamember of the Remuneration Consultants Group (“RCG”) and is a signatory to the RCG’s Code of Conduct. It was confirmed that none of the
Committee members had any connection or conflicts of interest in regard to this appointment. Additional legal advice was sought from Tapestry Compliance
Limited in respect of the Group’s share-based plans.
The Chief Executive Ocer, Deputy CEO, Chief Financial Ocer and Head of Asia Pacific & Canada attend Committee meetings by invitation but do not attend to
take part in any discussions relating to their own remuneration. The Head of HR attends Committee meetings where appropriate to the matters being considered
including both Executive and wider workforce remuneration. No Director or employee is involved in discussions regarding their own pay.
104 – CMC Markets plc
Annual Report and Financial Statements 2024
Compliance with the 2018 UK Corporate Governance Code
The Committee considers the Remuneration Policy and current practices to address the requirements contained within Provision 40 of the Code. As noted in the
Committee Chair’s statement, Susanne Chishti is the designated Non-Executive Director for engaging with the workforce on a variety of topics including remuneration.
Provision How addressed
Clarity – remuneration arrangements should be transparent and
promote effective engagement with shareholders and the
workforce.
The Remuneration Policy is clearly disclosed in this report and the Committee has proactively
engaged with key institutional shareholders as part of the renewal process. The Committee
receives regular updates on market practice and has received updates on pay within the
wider workforce.
Simplicity – remuneration structures should avoid complexity
and their rationale and operation should be easy to understand.
The Committee aims for our arrangements to be as simple as possible by, for example,
operating a single combined incentive arrangement. Our aim is for disclosure in this report to
be easy to understand for our stakeholders.
Risk – remuneration arrangements should ensure reputational
and other risks from excessive rewards, and behavioural risks that
can arise from target-based incentive plans, are identified and
mitigated.
The Company’s discretionary incentive plans ensure the Committee has discretion to reduce
the size of awards and awards are subject to malus and clawback provisions. The Committee
has discretion to adjust formulaic outcomes if it does not consider them appropriate (see
Policy pages 96 to 103).
Predictability – the range of possible reward values to individual
Directors and any other limits or discretions should be identified
and explained at the time of approving the Policy.
Scenario charts for all Executive Directors are included in the Remuneration Policy and show
estimates of potential future reward opportunity and the implied split between the different
elements of remuneration under three different performance scenarios. The Policy includes
an explanation of the discretions that can be exercised by the Committee.
Proportionality – the range of possible reward outcomes, the
delivery of strategy and the long-term performance of the
Company should be clear. Outcomes should not reward poor
performance.
A significant part of an Executive’s reward is linked to performance with a clear line of sight
between business performance and the delivery of shareholder value.
Alignment to culture – incentive schemes should drive
behaviours consistent with Company purpose, values and
strategy.
The incentive arrangements and the performance measures used are strongly aligned to
those that the Board considers when determining the success of the implementation of the
Company’s strategy. Please see pages 18 to 22 of this report for more information on the
Company’s strategy and key performance indicators.
The Remuneration Policy operated as intended in the year ended 31 March 2024 and the following section sets out the remuneration arrangements and
outcomes for the year ended 31 March 2024, and how the Committee intends the Remuneration Policy to apply during the year ending 31 March 2025.
The following pages have been prepared in accordance with Part 3 of The Large and Medium-sized Companies and Groups (Accounts and Reports)
Regulations 2008 (as amended) and Rules 9.8.6 and 9.8.8 of the Listing Rules. The Directors’ remuneration report, including the Remuneration Policy, will be put
to a shareholder vote at the Annual General Meeting on 25 July 2024. The revised Remuneration Policy will also be put to the shareholders for approval at the
Annual General Meeting.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 105
Annual Report and Financial Statements 2024
Annual report on remuneration continued
Single total figure of Executive Director remuneration (audited)
The table below sets out the single total figure of the remuneration received by each Executive Director who served during the years ended 31 March 2023
and31March 2024.
Name
Year ended
31 March
Salary
£’000
Benefits
1
£’000
Pension
4
£’000
Other
5
£’000
Total fixed
remuneration
£’000
Annual
incentives
2
£’000
Long-term
incentives
3
£’000
Total variable
remuneration
£’000
Tot al
£’000
Peter Cruddas
2024 700.0 3.0 — — 703.0 254.2 — 254.2 957.2
2023 700.0 3.0 — — 703.0 137.6 — 137.6 840.6
David Fineberg
2024 363.1 1.5 25.4 1.8 391.8 276.8 143.8 420.6 812.4
2023 350.0 1.7 30.8 1.8 384.3 148.2 110.0 258.2 642.5
Euan Marshall
7
2024 216.7 1.1 18.4 0.6 236.8 — — — 236.8
2023 250.0 1.7 23.2 1.8 276.7 72.5 — 72.5 349.2
Matthew Lewis
2024 288.6 0.4 32.0 — 321.0 243.1 89.4 332.4 653.4
2023 288.2 0.4 13.3 — 301.9 131.4 34.6 166.0 467.9
Albert Soleiman
2024 175.0 0.8 0 1.1 176.9 141.6 0 141.6 318.4
2023 n/a n/a n/a n/a n/a n/a n/a n/a n/a
1 Benefits: taxable value of benefits received in the year by Executive Directors comprises private health insurance and club membership for Peter Cruddas, health insurance for David Fineberg, Albert Soleiman and
EuanMarshall and life assurance for Matthew Lewis.
2 The total cash element of the CIP award earned in respect of performance during the relevant financial year.
3 The long-term incentive payments in 2023 to David Fineberg, Euan Marshall and Matthew Lewis relate to the vesting of the first tranche of the CIP award granted in 2020. The Remuneration Committee agreed there
were no factors prompting the application of the performance underpin; therefore, the first tranche will vest in full. Dividend equivalents are included in the figures. The value of the award was calculated using the
average closing share price on the date of vest of £1.54. The value attributable to share price growth is -£116,106, and -£43,126 for David Fineberg and Matthew Lewis respectively. Thiswas calculated using the grant
price of £3.49 and the vesting price (share price as at date of award vest) of £1.54.
The long-term incentive payment in 2024 to David Fineberg and Matthew Lewis relates to the vesting of the first tranche of the CIP award granted in 2021 and the second tranche of the CIP award granted in 2020.
Inrelation to the 2020 CIP award the Remuneration Committee agreed there were no factors prompting the application of the performance underpin; therefore, the second tranche will vest in full. Dividend equivalents
are not included in the figures. The value of the award was calculated using the average closing share price in the last three months of 2024 of £1.55. The value attributable to share price growth is -£86,275 and
-£32,046 for David Fineberg and Matthew Lewis respectively. This was calculated using the grant price of £3.49 and the vesting price (share price as at date of award vest) of £1.55.
In relation to the 2021 CIP award the Remuneration Committee agreed there were no factors prompting the application of the performance underpin; therefore, the tranche will vest in full. Dividend equivalents are not
included in the figures. The value of the award was calculated using the average closing share price in the last three months of 2024 of £1.55. The value attributable to share price growth is -£134,710 and -£118,227 for
David Fineberg and Matthew Lewis respectively. This was calculated using the grant price of £4.45 and the vesting price (share price as at date of award vest) of £1.55. Euan Marshall received an award in 2021 but this
was forfeited upon his resignation from the Board.
Neither Peter Cruddas nor Albert Soleiman received payments relating to the vesting of CIP awards in FY24.
4 Pension: during the year ended 31 March 2024, David Fineberg, Albert Soleiman and Euan Marshall were eligible to receive a Company pension contribution of up to 7% of salary in line with the maximum contribution
received by employees across the Group. Matthew Lewis received contributions to the Superannuation plan in Australia. Peter Cruddas opted out of the plan and no compensation was provided. No current or past
Executive Directors have a prospective right to a final salary pension or cash balanced benefits by reference to years of qualifying service.
5 Share Incentive Plan: employees, including the Executive Directors, are entitled to participate in the SIP throughout the year; it allows employees and Directors to receive one matching share for every partnership share
purchased under the SIP up to the limits defined by HMRC. In 2024, 1,402 matching shares were allocated to David Fineberg , 466 matching shares were allocated to Euan Marshall and 935 matching shares were
allocated to Albert Soleiman calculated on the dates of purchase. The free and matching shares will be forfeited if, within three years from the date of grant, the individual leaves employment in certain circumstances.
Peter Cruddas and Matthew Lewis do not participate in the plan.
6 The decrease in salary for Matthew Lewis reflects prevailing exchange rates.
7 Figures for Euan Marshall reflect the period 1 April 2023 to 31 December 2023 following his resignation from the Board. Euan Marshall received CIP awards in 2020 and 2021 but these were forfeited upon his
resignation from the Board. He only received his contractual six-month notice and no compensation for loss of oce.
8 Figures for Albert Soleiman reflect the period from 1 September 2023 to 31 March 2024 following his appointment to the Board.
CIP for the year ended 31 March 2024 (audited)
During the year ended 31 March 2024 the Executive Directors participated in the Combined Incentive Plan with a maximum opportunity of up to 135% of salary
forPeter Cruddas, CEO, and up to 300% of salary for David Fineberg, Deputy CEO, Albert Soleiman, CFO, and Matthew Lewis, Head of Asia Pacific & Canada.
In considering the combined incentive cash award and share award, together comprising the award, due to the Executive Directors for the year ended
31March2024, the Committee reviewed Group earnings per share (“EPS”) against targets over the period.
Financial performance measures account for 60% of the total award.
Measure Threshold Targ et Maximum Actual
Group earnings per share (“EPS”) 9.3 pence (25%) 15.4 pence (50%) 23.0 pence (100%) 16.7 pence (58.6%)
The Group successfully delivered a diluted EPS of 16.7 pence against a target of 15.4 pence, resulting in a 58.6% award from this element of the Plan.
Remuneration Committee report continued
106 – CMC Markets plc
Annual Report and Financial Statements 2024
Group strategic and personal performance measures
Strategic performance measures account for 30% of the total award and personal measures account for 10% of the total award.
Chief Executive Officer strategic objectives (30%) Score Assessment
Continue to evolve CMC’s strategy to broaden its product range and geographical reach
in line with the financial, commercial and risk metrics agreed with the Board.
90% Strong progress has been made with the delivery of cash equities, initial
rollout of options, opening of the Bermuda oce and growth of the Middle
Eastern business.
Provide strategic oversight to the delivery of the options and equities project to Connect
and Prime clients.
90% Peter has been key to the structure and delivery of this product which is key
for CMC’s future growth.
Drive CMC’s leveraged business to ensure levels of client retention and overall
satisfaction are improved and not impacted by the diversification of the business.
90% CMC remains a market leader across a number of measures for the quality of
platform and products it provides.
Continue to evolve and develop the senior leadership team to reflect the increasing
complexity and strategic ambition of CMC.
90% The appointment of the new CFO has provided an opportunity to improve
the diversity ofthe senior team and has brought a dierent perspective to the
Executive Committee.
Jointly sponsor with the wider ED team the development and delivery of a strategy to
improve diversity and inclusion and ESG across CMC.
75% Good progress continues to be made with the exception of the decline in
employeeengagement.
Award for strategic objectives 26%
Personal and mandatory risk objective (10%):
Lead CMC Markets to deliver its vision and objectives by demonstrating leadership skills
fully aligned with CMC values, ways of working and conduct code.
60% Peter has continued to lead by example to deliver to the Company’s values,
ways of working and code of conduct.
Award for personal objective 6%
Total for strategic and personal objectives (40%) 32%
Deputy CEO strategic objectives (30%) Score Assessment
Deliver and embed an eective Risk Management Framework. 75% Good progress has been made in implementing the recommendations of
ERM framework review.
Lead the creation of new entities and partnerships to oer trading to US customers. 90% Strong progress has been made in developing the app and preparing for a
Q1 launch.
Lead the dynamic hedging project to tackle concentrated exposures and better
withstand marketvolatilities.
90% Enhancements to index and FX strategies now in place and producing
positive results.
Deliver a viable oering to migrate futures flow to CMC. 75% Good progress has been made with vendor selection complete and due to
be fully operational in H1 FY25.
Implement and embed the Board approved consumer duty plan. 90% Consumer Duty is now implemented within CMC with some minor areas of
enhancement required to ensure it is fully embedded.
Jointly sponsor with the wider ED team the development and delivery of a strategy to
improve diversity and inclusion and ESG across CMC.
75% Good progress continues to be made with the exception of the decline in
employeeengagement.
Award for strategic objectives 25%
Personal and mandatory risk objective (10%):
Lead CMC Markets to deliver its vision and objectives by demonstrating leadership skills
fully aligned with CMC values, ways of working and conduct code.
60% David has continued to lead by example to deliver to the Company’s values,
ways of working and code of conduct.
Award for personal objective 6%
Total for strategic and personal objectives (40%) 31%
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 107
Annual Report and Financial Statements 2024
Annual report on remuneration continued
CIP for the year ended 31 March 2024 (audited) continued
Group strategic and personal performance measures continued
Based on the outcomes against the performance targets, the Committee recommended the following awards under the Combined Incentive Plan:
Chief Financial Officer strategic objectives (30%) Score Assessment
Implement the requirements of the UK BEIS consultation. 100% Strong progress has been made in understanding the impact of these changes on
CMC and we are well positioned to implement to time and budget.
Project delivery tracking – Ongoing evolution of business line P&L reporting to
include revenue and cost tracking at a material project level and engendering
greater accountability in senior management objectives and remuneration.
75% Good progress has been made in implementing a more robust approach to project
prioritisation.
ERM framework implementation – Support the delivery of the project, with
particular focus on the capital and liquidity considerations resulting from the
ongoing diversification of the business.
100% Project is nearing completion and has been delivered to a high standard.
ICARA review – Lead the delivery of FCA requirements resulting from the
ICARA review.
75% Good progress has been made with the final implementation of audit findings
nearing completion.
Cost control – Implement a cost-conscious culture through disciplined spend,
robust challenge and deeper cost review. Lead the cost reduction programme
covering headcount, supplier reviews and eciency initiatives.
100% Albert has delivered a significant review of business costs in FY24. This has been
supplemented with a drive to build a more cost-conscious culture.
Jointly sponsor with the wider ED team the development and delivery of a strategy
to improve diversity and inclusion and ESG across CMC.
75% Good progress continues to be made with the exception of the decline in
employee engagement.
Award for strategic objectives 26%
Personal and mandatory risk objective (10%):
Lead CMC Markets to deliver its vision and objectives by demonstrating leadership
skills fully aligned with CMC values, ways of working and conduct code.
60% Albert has continued to lead by example to deliver the Company’s values, ways of
working andcode of conduct.
Award for personal objective 6%
Total for strategic and personal objectives (40%) 32%
Head of Asia Pacific & Canada strategic objectives (30%) Score Assessment
Singapore Invest launch – Lead the successful phased public launch. 90% Singapore Invest was successfully launched to the public in September 2023 with
revenues slightly under budget.
Bermuda – Lead the successful licence application to establish an oshore entity. 75% Good progress has been made with the licence application made and the
oce opened.
MT4 – Lead the commercial improvements including premium oering,
enhancements to MT4 active and MT4 spread bet.
100% MT4 has been delivered to time and budget for all milestones.
NZ Invest – Lead the successful build and launch of the CMC Invest product for
New Zealand.
75% Good progress has been made with the product launch planned for Q1 FY25.
Automation anywhere – Lead the automation rollout of robotics across agreed
teams and tasks.
100% Project progresses to time with several business eciencies delivered and
moreidentified.
Crypto – Lead the successful public launch of Project Digital Assets across
Australia, NZ and SG.
100% Crypto has exceeded all expectations and, subject to licence approvals, we expect
to see further progression on in FY25.
Jointly sponsor with the wider ED team the development and delivery of a strategy
to improve diversity and inclusion and ESG across CMC.
75% Good progress continues to be made with the exception of the decline in
employeeengagement.
Award for strategic objectives 26%
Personal and mandatory risk objective (10%):
Lead CMC Markets to deliver its vision and objectives by demonstrating leadership
skills fully aligned with CMC values, ways of working and conduct code.
60% Matthew has continued to lead by example to deliver the Company’s values, ways
of working andcode of conduct.
Award for personal objective 6%
Total for strategic and personal objectives (40%) 32%
Remuneration Committee report continued
108 – CMC Markets plc
Annual Report and Financial Statements 2024
Executive Directors’ combined incentive outcomes
Max award
% salary
Overall outcome (%
of max opportunity)
Award
% salary
Total award
£’000
Cash award Share award
Role £’000 % salary £’000 % salary
Peter Cruddas Chief Executive Officer 135% 67. 3% 91% 635.6 254.2 36% 381.4 54%
David Fineberg Deputy Chief
ExecutiveOfficer
300% 65.9% 198% 692.1 276.8 76% 415.2 114%
Albert Soleiman
Chief Financial Officer
300% 67.4% 202% 353.9 141.6 47% 212.3 71%
Matthew Lewis Head of Asia Pacific
&Canada
300% 67.5% 203% 607.7 243.1 78% 364.6 116%
1 The award for Albert Soleiman is pro-rated to reflect his appointment to the role of Chief Financial Ocer with eect from 1 September 2023. Euan Marshall forfeited a combined incentive award for 2024 upon
resignation from the Board in accordance with the rules of the scheme.
The share element of the 2024 awards will be granted as conditional shares after the announcement of the year-end results. The award share price will be
calculated using the three-day average share price prior to the date of grant of the award.
Awards vest at 40%, 30% and 30% after three, four and five years respectively and are subject to a performance underpin assessed at the end of three financial
years following the one-year performance period. The performance underpin will consist of a broad review of the performance of the business and will take into
account the Company’s three-year TSR performance, three-year aggregate profit levels and any regulatory breaches during the period. The Committee has
discretion to apply other factors.
Vesting of awards under the CIP in the financial year ended 31 March 2024 (audited)
The first tranche of the 2020 CIP award vested to the following Executive Directors on 20 July 2023:
Director Total grant in shares
Total dividend
equivalent shares Total shares vested
David Fineberg 59,542 11,904 71,446
Matthew Lewis 22,116 4,419 26,535
Notes:
Euan Marshall forfeited the deferred element of the 2020 CIP award upon his resignation from the Board.
Share awards granted in year (audited)
The table below provides details of the deferred element of the 2023 CIP.
Director Face value of award (£’000) No. of shares awarded
Peter Cruddas 206.3 138,144
David Fineberg 222.3 148,795
Matthew Lewis 197.0 131,927
Notes:
The awards were granted as conditional shares. The award share price was £1.495 calculated using the three-day average share price prior to the date of grant of
the award.
Awards vest at 40%, 30% and 30% after three, four and five years respectively and are subject to a performance underpin assessed at the end of three financial
years following the one-year performance period. The performance underpin will consist of a broad review of the performance of the business and will take into
account the Company’s three-year TSR performance, three-year aggregate profit levels and any regulatory breaches during the period. The Committee has
discretion to apply other factors. For further details please refer to the notes for the single figure table on page 106.
Euan Marshall forfeited the deferred element of the 2023 CIP award upon his resignation from the Board.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 109
Annual Report and Financial Statements 2024
Annual report on remuneration continued
Implementation in 2024/25
Salary
The Executive Directors will not receive a pay rise with eect from 1 June 2024. The table below summarises these changes:
Name Role Previous salary Adjusted salary
Percentage
change
Peter Cruddas Chief Executive Officer £700,000 £700,000 0%
David Fineberg Deputy Chief Executive Officer £365,750 £365,750 0%
Albert Soleiman Chief Financial Officer £300,000 £300,000 0%
Matthew Lewis Head of Asia Pacific & Canada £287,498 £287,498 0%
Combined Incentive Plan
The Committee also proposes to continue to use Group financial, strategic and individual performance against targets for the 2024/25 financial year as the basis
on which the combined incentive will be awarded. The performance measures applied to the combined incentive will be:
– 60% financial;
– 30% strategic performance; and
– 10% personal objectives.
In relation to the financial target, the Committee has ensured that a suciently stretching range has been set by taking account of a number of internal and
external reference points and the impact of regulatory change. The target range will be disclosed in next year’s Annual Report and Financial Statements.
Withregard to the strategic and personal objectives, these will be evaluated based on quantitative measurable objectives in the significant majority of cases.
The Directors believe that these performance measures are commercially sensitive; therefore, detailed disclosure of these outcomes will be included in the 2025
Annual Report and Financial Statements. The maximum awards achievable under the CIP for 2025 will be 350% of salary for the CFO, Deputy CEO and Head of
APAC & Canada. For the CEO the maximum award achievable is 135% of salary.
Pension
With the exception of the CEO, who does not currently participate in the scheme, the Executive Directors based in the UK can receive a pension contribution of
7%of salary or cash in lieu of pension (net employer costs). The Head of Asia Pacific & Canada receives Superannuation in Australia.
Share ownership and share interests (audited)
The Committee has adopted guidelines for Executive Directors and other senior Executives to encourage substantial long-term share ownership. Executive
Directors are expected to build and hold shares of at least 200% of salary and to retain at least 50% of shares vesting (net of tax) until the guideline is achieved.
The table below shows the interests of the Directors and connected persons in shares and the extent to which CMC Markets’ shareholding guidelines
are achieved.
Total share
interests at
31 March 2024
Number
Total share
interests at
31 March 2024
% salary
Requirement
met
Unvested
awards
not subject to
performance
conditions
1
Unvested
awards
subject to
performance
conditions
2
Executive Directors
Peter Cruddas (including shares held by spouse) 174,149,738 54,111% Yes — 205,612
David Fineberg
1
(including shares held by spouse) 384,319 229% Yes 3,665 335,011
Albert Soleiman (including shares held by spouse) 53,704 39% No 6,514 —
Matthew Lewis
1
(including shares held by spouse) 304,290 230% Yes 1,437 273,479
Euan Marshall
3
(including shares held by spouse) 38,852 28% No - —
1 David Fineberg and Albert Soleiman have interests under the Share Incentive Plan subject to forfeiture for three years. Matthew Lewis has interests in the International Share Incentive Plan.
2 Unvested Deferred Share awards under the CIP are included as unvested awards subject to performance conditions and do not count towards the total share interests.
3 Euan Marshall’s figure is the balance as at 1 September 2023.
David Fineberg and Albert Soleiman have continued to participate in the Share Incentive Plan, each acquiring 121 matching shares and 121 partnership shares
during April and May.
There are no other changes to shareholdings between 31 March 2024 and 30 May 2024.
Remuneration Committee report continued
110 – CMC Markets plc
Annual Report and Financial Statements 2024
Total shareholder return (“TSR”) performance and CEO single figure
The below chart compares the total shareholder return (“TSR”) of the Company against the FTSE 250 index based on £100 invested at listing (5 February 2016).
The FTSE 250 is used as the benchmark as CMC Markets is a constituent of this index.
05/02/2016
31/03/2016 31/03/2017
CMC Markets
Total shareholder return (rebased to 100)
FTSE 250
31/03/2018
31/03/2019 31/03/2020 31/03/2021 31/03/2023 31/03/202431/03/2022
280
240
200
160
120
80
40
0
Source: DataStream.
CEO pay history
Name
Year ended
31 March 2016
1
Year ended
31 March 2017
Year ended
31 March 2018
Year ended
31 March 2019
Year ended
31 March 2020
Year ended
31 March 2021
Year ended
31 March 2022
Year ended
31 March 2023
Year ended
31 March 2024
CEO single figure of
remuneration (£’000) 739.9 412.8 845.8 434.4 1,048.5 1,459.4 858.2 840.6 957. 2
Annual incentive payout
(as % of maximum) 100% 0% 83% 0% 100% 91% 37% 36% 67%
Long-term incentives
(as % of maximum) n/a n/a n/a n/a n/a n/a n/a n/a n/a
1 CMC Markets plc listed on the London Stock Exchange on 5 February 2016; however, the full-year single figure has been included here for the year ended 31 March 2016.
Percentage change in remuneration
The table below shows the annual percentage change in salary, taxable benefits and annual incentive for each Director with colleagues employed by the Group
who are also not Directors of the Group:
2021 2022 2023 2024
% change in ED and NED
remuneration
Salary/
fees
Taxable
benefits
Annual
incentive
Salary/
fees
Taxable
benefits
Annual
incentive
Salary/
fees
Taxable
benefits
Annual
incentive
Salary/
fees
Taxable
benefits
Annual
incentive
Executive Directors
Peter Cruddas 34% 0% 43% 18% 0% -60% 0% 0% -11% 0% 0% 85%
David Fineberg 3% 7% 0% 0% 0% -61% 0% -3% -10% 4% -15% 87%
Euan Marshall
1
0% 0% 14% 0% 0% -64% 0% -3% 5% -13% -35% n/a
Matthew Lewis
2
24% 0% 18% 7% 0% -60% -3% 0% -10% 0% 0% 85%
Albert Soleiman n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
Non-Executive Directors
James Richards 18% n/a n/a 11% 4,692% n/a 0% 72% n/a 0% -48% n/a
Paul Wainscott 8% 0% n/a 5% 513% n/a 6% 448% n/a 15% 42% n/a
Sarah Ing 8% n/a n/a 5% n/a n/a 4% n/a n/a 8% n/a n/a
Susanne Chishti n/a n/a n/a n/a n/a n/a n/a n/a n/a 31% n/a n/a
Clare Francis n/a n/a n/a n/a n/a n/a n/a n/a n/a 258% 221% n/a
Clare Salmon 8% n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
All employees
5
5% 0% 15% 8% 0% -5% 9% 0% -9% 6.6% 0% 29%
1 Euan Marshall resigned as a Director on 6 July 2023 and left the Company on 31 December 2023. He did
not receive an annual incentive award for FY24.
2 The salary decrease for Matthew Lewis is as a result of exchange rate movements.
3 Susanne Chishti was appointed on 1 June 2022.
4 Clare Francis was appointed on 19 December 2022.
5 The employee figure relates to those “same store” employees, i.e. those employed on 1 April 2023, and
compares their salary then to 31 March 2024. Annual incentive figure is based on the corporate bonus
awards and does not reflect stock awarded to employees.
6 Clare Salmon resigned as a Non-Executive Director on 28 July 2022.
7 The increase in taxable benefits reflects the limited travel allowed in 2021 due to the pandemic.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 111
Annual Report and Financial Statements 2024
Annual report on remuneration continued
Pay ratio reporting
The Company is required to publish information on the pay ratio of the Group Chief Executive to UK employees. The table below sets out the ratio of the pay and
benefits of the median UK employee (P50) and those at the 25th (P25) and 75th (P75) percentile to the remuneration received by the Group Chief Executive
Ocer. We have used “method A” as we believe it provides the most consistent and comparable outcomes. The ratios reflect all remuneration received by
an individual in respect of the relevant years, and includes salary, benefits, pension and value received from incentive plans. Employee pay and benefits were
determined on 31 March 2024 using the same approach as used for the single total figure.
Total remuneration
Financial year Methodology P25 (lower quartile) pay ratio P50 (median) pay ratio P75 (upper quartile) pay ratio
2024 A 19:1 12:1 8:6
2023 A 17:1 11:1 8:1
2022 A 18:1 11:1 8:1
2021 A 33:1 21:1 15:1
2020 A 26:1 17:1 12:1
The slight change in ratio in 2023 and 2024 reflects the achievements against the financial objective under the CIP scheme in FY24. The change from 2022 to
2023 also reflects the reduction in the cash element of the award from 45% to 40%. Comparative employee reward elements are detailed below:
CEO
£’000
P25 (lower quartile)
£’000
P50 (median)
£’000
P75 (upper quartile)
£’000
Total salary 703.0 45.6 70.8 96.7
Total remuneration 957. 2 50.1 80.0 110.7
Our principles for pay setting and progression in our wider workforce are the same as for our Executives, with total reward being suciently competitive to
attract and retain high calibre individuals without over-paying and providing the opportunity for individual development and career progression. The pay ratios
reflect how remuneration arrangements dier as accountability increases for more senior roles within the organisation, and in particular the ratios reflect the
weighting towards long-term value creation and alignment with shareholder interests for the CEO. Our employees will receive a presentation on how Executive
remuneration aligns to that of the wider Company in March 2022. This presentation will be given again in July 2024 to reflect our 2024 reward outcomes.
We are satisfied that the median pay ratio reported this year is consistent with our wider pay, reward and progression policies for employees. The median
reference employee has the opportunity for annual pay increases, annual performance payments and career progression.
Relative importance of spend on pay
The chart below illustrates the Group’s actual expenditure on shareholder distributions (including dividends and share buybacks) and total employee pay
expenditure for the financial years ended 31 March 2023 and 31 March 2024.
Remuneration Committee report continued
2023 2024
101.6
48.0
118.5
23.2
140
120
100
80
60
40
20
0
60
50
40
30
20
10
0
17% increase
52% decrease
Employee remuneration Distribution to shareholders
£m
£m
Dilution
The Company’s share schemes are funded through a combination of shares purchased in the market and new issue shares, as appropriate. The Company
monitors the number of shares issued under these schemes compared to the relevant dilution limits set by the Investment Association in respect of all share plans
(10% in any rolling ten-year period) and Executive share plans (5% in any rolling ten-year period).
112 – CMC Markets plc
Annual Report and Financial Statements 2024
Payments to past Directors and for loss of oce (audited)
There were no payments to past Directors for loss of oce during the year. Euan Marshall resigned as a Director on the 6 July 2023 and only received on his
contractual notice. By mutual agreement he left CMC Markets on 31 December 2023 without payment in lieu of notice for the remaining notice period.
Non-Executive Director remuneration
The table below sets out the remuneration for the Non-Executive Directors for the year ended 31 March 2024. The fees for the Chairman have not changed this
year. The Non-Executive Director fee has increased from £70,000 to £75,000, the Committee Chair and SID fees increased from £10,000 to £15,000, and the
Workforce Engagement Non-Executive Director fee has increased from £7,500 to £10,000 to reflect the increased time commitment in fulfilling these roles for
CMC Markets. During the year an additional fee of £10,000 was approved for the new position of Non-Executive Director responsible for Consumer Duty.
Role £’000
Chairman fee 210.0
Non-Executive Director fee 75.0
Committee Chair additional fee 15.0
Workforce Engagement Non-Executive Director fee 10.0
Consumer Duty Non-Executive Director fee 10.0
Senior Independent Director additional fee 15.0
The fees detailed above for 2024 will be unchanged for the year ending 31 March 2025.
External appointments
It is the Board’s policy to allow Executive Directors to take up external non-executive positions, subject to the prior approval of the Board. Any fee earned in
relation to outside appointments is retained by the Executive Director. Peter Cruddas was a director of The Peter Cruddas Foundation, Finada Limited and Crudd
Investments Limited during the year ended 31 March 2024 and received no fees in relation to these appointments. No other Executive Director held any outside
appointments.
Single total figure of Non-Executive Director remuneration (audited)
The table below sets out the single total figure of the remuneration received by each Non-Executive Director who served during the year ended 31 March 2024.
The fees set out in the table below reflect the actual amounts paid during the year. The Non-Executive Directors do not receive any variable remuneration.
Remuneration comprises an annual fee for acting as a Chairman or Non-Executive Director of the Company. Additional fees are paid to Non-Executive
Directors in respect of service as Chair of the Group Audit, Group Risk or Remuneration Committees, Senior Independent Director, Workforce Engagement
Non-Executive Director and Consumer Duty Non-Executive Director.
Name
Year ended
31 March
Base fee
£’000
Committee fee
£’000
SID fee
£’000
Stakeholder/client
NED fee
£’000
Benefits
1
£’000
Total
2
£’000
James Richards
2024 210.0 — — — 10.6 220.6
2023 210.0 — — — 20.6 230.6
Paul Wainscott
2024 75.0 15.0 15.0 — 11.9 116.9
2023 71.7 11.7 8.3 — 8.4 100.1
Sarah Ing
2024 75.0 15.0 — — — 90.0
2023 71.7 11.7 — — — 83.4
Susanne Chishti
2024 75.0 — — 10.0 — 85.0
2023 60.0 — — 4.6 — 64.6
Clare Francis
4
2024 75.0 15.0 — 10.0 1.8 101.8
2023 21.6 3.8 — 2.5 0.5 28.4
1 Non-Executive Directors are not entitled to benefits. Benefits (and any tax due thereon) relate to reimbursed travel expenses.
2 Non-Executive Directors are not entitled to receive share-based payments and no award of shares was granted to any NEDs during the period.
3 Susanne Chishti was appointed on 1 June 2022.
4 Clare Francis was appointed on 19 December 2022.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 113
Annual Report and Financial Statements 2024
Annual report on remuneration continued
Non-Executive Director share ownership and share interests (audited)
The table below shows the interests of the Non-Executive Directors and connected persons in shares.
Name
Ordinary Shares
held at
31 March 2023
Ordinary Shares
held at
31 March 2024
James Richards — —
Paul Wainscott — —
Sarah Ing — —
Susanne Chishti — —
Clare Francis — —
There are no other changes to shareholding between 31 March 2024 and 30 May 2024.
The Remuneration Committee
During the year, the Committee sought internal support from the Executive Directors, who attended Committee meetings by invitation from the Chair. Advice was
sought on specific questions raised by the Committee and on matters relating to the performance and remuneration of senior managers. No Director was present
for any discussions that related directly to their own remuneration. The Company Secretary, or their deputy, attends each meeting as Secretary to the Committee.
Advisers to the Remuneration Committee
In undertaking its responsibilities, the Committee seeks independent external advice as necessary. Willis Towers Watson (“WTW”) has continued to
act as adviser to the Committee throughout the year. WTW was appointed in 2017 by the Committee following a review of advisers. WTW is a voluntary
signatory to the Code of Conduct for Remuneration Consultants, which assures clients of independence and objectivity. Details of the Code can be found at
www.remunerationconsultantsgroup.com. During the year, WTW provided independent advice on a range of remuneration matters including current market
practice, benchmarking of Executive pay and incentive design. The fees paid to WTW in respect of work carried out, on a time and expenses basis, for the
Committee for the year under review total £51,920. The Committee is comfortable that the advice it has received has been objective and independent. In addition
to advising on Executive Director and senior management remuneration, WTW is also the principle provider of market data for the wider employee population in
London and Sydney.
Statement of voting at the AGM
The Company AGM was held on 27 July 2023, where the Directors’ remuneration report was tabled. The result of the vote on these resolutions is set out below:
Remuneration Policy
(at 2021 AGM)
Remuneration report
(at 2023 AGM)
% of votes
(excluding
withheld)
Number
of votes
% of votes
(excluding
withheld)
Number
of votes
For 97. 25 249,427,646 93.55 239,033,843
Against 2.75 7,043 ,454 6.45 16,474,742
Total votes cast 256,471,100 255,508,585
Withheld
1
8,310 17,822
1 A vote withheld is not a vote in law and so is not counted for the purposes of the calculation of the proportion of votes “for” and “against” a resolution.
This report will be submitted to shareholders for approval at the AGM to be held on 25 July 2024.
Approved by the Board on 12 June 2024 and signed on its behalf by:
Sarah Ing
Independent Non-Executive Director
and Chair of the Remuneration Committee
20 June 2024
Remuneration Committee report continued
114 – CMC Markets plc
Annual Report and Financial Statements 2024
CMC Markets plc is a public limited company incorporated in England and
Wales under the Companies Act 2006 with registered number 05145017.
The Directors present their report, together with the consolidated Financial
Statements for the year ended 31 March 2024. For the purpose of the FRC’s
Disclosure Guidance and Transparency Rule (“DTR”) 4.1.8R, the Strategic
report is also the Management report for the year ended 31 March 2024.
The Corporate governance sections that appear on pages 70 to 82, together
with this report of which they form part, fulfil the requirements of the Corporate
governance statement for the purpose of the DTRs.
Directors
With the exception of Albert Soleiman and Susanne Chishti, all Directors will
seek re-election at the 2024 Annual General Meeting (“AGM”) on Thursday
25 July 2024. Following recommendation by the Nomination Committee, a
Director may be appointed to the Board by the Board of Directors and will then
be put forward at the following AGM for election by the shareholders. The
Company’s Articles of Association, available on the CMC Markets plc Group
website, detail the appointment and removal process for Directors. The Board
approved the appointment of Albert Soleiman with eect from 1 September
2023 and Albert will seek election at the 2024 AGM. Euan Marshall retired
from the Board on 1September 2023. On 20 June 2024 it was announced
that Susanne Chishti will step down from the Board at the 2024 AGM. The
Company has not adopted any special rules regarding the appointment and
replacement of Directors other than as provided for under UK company law.
Details of Directors’ interests and conflicts
The Directors have a statutory duty to avoid conflicts of interest. The Board
has established a procedure to deal with any potential or actual conflicts
of interest and to ensure that all such interests are disclosed and, where
appropriate, authorised by the Board (with any limits or conditions imposed as
applicable) in accordance with the Articles of Association and the Companies
Act 2006. Details of all Directors’ conflicts of interest are recorded in a register
of conflicts which is maintained by the Company Secretary and all approvals
are formally minuted. Upon appointment, new Directors are advised of the
procedure for managing conflicts, which includes the notification of any actual
or potential conflicts or changes to the circumstances of any such conflicts.
Any decision of the Board to authorise a conflict of interest is only eective
if it is agreed without the conflicted Director(s) voting or without their votes
being counted. In making such a decision, the Directors must act in a way they
consider in good faith will be most likely to promote the success of the Group.
The management of potential conflicts has been operating in accordance
with the procedure throughout the year in review and subsequently. Details
of the current Directors’ interests in the Company’s shares and securities
can be found in the Directors’ remuneration report on pages 103 and 114 and
their biographies, including details of other directorships, are disclosed on
pages 72 to 74.
The Directors of the Company who were in oce during the year and up to the
date of signing the Financial Statements were:
James Richards Chairman
Susanne Chishti Non-Executive Director
Lord Cruddas Chief Executive Ocer
David Fineberg Deputy Chief Executive Ocer
Clare Francis Non-Executive Director
Sarah Ing Non-Executive Director
Matthew Lewis Head of Asia Pacific & Canada
Albert Soleiman Chief Financial Ocer (appointed 1 September 2023)
Paul Wainscott Senior Independent Director
Euan Marshall retired from the Board on 1 September 2023.
Directors’ indemnities
As permitted by the Articles of Association, the Company has granted
indemnities to each of its Directors and the Company Secretary to the extent
permitted by law.
A qualifying third-party indemnity provision as defined by Section 234 of
the Companies Act 2006 was in force throughout the last financial year and
remains in place in relation to certain losses and liabilities which the Directors
or Company Secretary may incur to third parties in connection with their
position in the Company or any associated company. The Company also
maintains appropriate insurance to cover Directors’ and Ocers’ liability,
which is assessed annually and approved by the Board. No amount was paid
under the Directors’ and Ocers’ liability insurance during the year.
Branch oces
CMC Markets plc does not have any overseas branches. Various subsidiaries
in the Group have overseas branches, as detailed on pages 178 to 179.
Strategic report
The Companies Act 2006 requires the Group to prepare a Strategic report,
which commences at the start of this Annual Report and Financial Statements
up to page 68. As permitted by Section 414C(11) of the Companies Act 2006,
some matters required to be included in the Directors’ report have instead
been included in the Strategic report. These disclosures are incorporated by
reference in the Directors’ report. The Strategic report includes information
on the Group’s operations and business model, going concern and viability,
review of the business throughout the year, anticipated future developments,
key performance indicators, principal risks and uncertainties, information
on stakeholder and employee engagement and the Board’s statement in
accordance with Section 172 of the Companies Act 2006. The use of financial
instruments is included in the report and further covered under note 29 to the
consolidated Financial Statements.
The Group’s vision is to be a global provider of online retail financial services
and to maintain its status as a pioneer of platform technology. Its strategic
objective is to provide long-term value to shareholders by ensuring superior
returns. This long-term success is generated through the consistent and
sustainable delivery of growth in revenue and improvement to operating
margins through operational excellence including product innovation,
geographical diversification, technology and services. The strategic
objectives to achieve this are also set out in the Strategic report on pages
18 and 19.
Dividends
On 19 June 2024, the Board recommended a final dividend of 7.3 pence per
Ordinary Share in respect of the full financial year ended 31 March 2024,
subject to shareholder approval at the 2024 AGM. If approved, the dividend
will be paid on 9 August 2024 to shareholders on the register of members
at the close of business on 12 July 2024. The shares will go ex-dividend on
11July 2024. An interim dividend of 1.0 pence per Ordinary Share was paid on
11January 2024, bringing the total dividend for the year ended 31 March 2024
to 8.3pence per Ordinary Share.
Further information on dividends is shown in note 11 of the Financial
Statements and is incorporated into this report by reference.
Directors’ report
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 115
Annual Report and Financial Statements 2024
Share capital
The Company’s share capital comprises Ordinary Shares of 25 pence
each and Deferred Shares of 25 pence each. At 31 March 2024, there were
279,815,463 Ordinary Shares (99.12% of the overall share capital) and
2,478,086 Deferred Shares (0.88% of the overall share capital) in issue.
Further information about share capital can be found in note 25 of the Financial
Statements.
Ordinary Shares
The holders of Ordinary Shares are entitled to one vote per share at meetings
of the Company. All Ordinary Shares in issue in the Company rank equally
and carry the same voting rights and the same rights to receive dividends and
other distributions declared or paid by the Company. Throughout the year, the
Ordinary Shares were publicly listed on the London Stock Exchange and they
remain so as at the date of this report. There are no specific restrictions on the
size of a shareholding nor on the transfer of shares, which are both governed
by the Articles of Association and prevailing law. The Directors are not aware
of any agreements between holders of the Company’s shares that may
result in restrictions on the transfer of shares or on voting rights. No person
has special rights of control over the Company’s share capital and all issued
shares are fully paid.
Shares held by the Employee Benefit Trust rank pari passu with the Ordinary
Shares and have no special rights. Voting rights and rights of acceptance of
any oer relating to the shares held in this trust rest with the trustees, who may
take account of any recommendation from the Company. Voting rights are not
exercisable by the employees on whose behalf the shares are held in trust.
Deferred Shares
The holders of Deferred Shares do not have the right to receive notice of any
general meeting of the Company nor the right to attend, speak or vote at any
such general meeting. The Deferred Shares have no rights to dividends and,
on a return of assets in a winding-up, entitle the holder only to the repayment
of the amounts paid upon such shares. The Deferred Shares may be
purchased at nominal value at the option of the Company by notice in writing
served on the holder of the Deferred Shares. No application has been made
or is currently intended to be made for the Deferred Shares to be admitted
to the Ocial List or to trade on the London Stock Exchange or any other
investment exchange.
Share capital and Directors’ powers
The powers of the Directors, including in relation to the issue or buyback
of the Company’s shares, are set out in the Companies Act 2006 and the
Company’s constitution.
Shareholders will be asked to renew these authorities in line with the latest
institutional shareholder guidelines at the 2024 AGM.
Controlling Shareholder disclosure
The Company entered into a Relationship Agreement with Lord Peter
and Fiona Cruddas (the “Controlling Shareholders”) on 26 January 2016,
the terms of which came into force on listing the Company to trade on the
Main Market of the London Stock Exchange. The principal purpose of the
Relationship Agreement is to ensure that the Company is capable at all times
of carrying on its business independently of the Controlling Shareholders
and their associates, that transactions and relationships with the Controlling
Shareholders and their associates are at arm’s length and on normal
commercial terms (subject to the rules on related party transactions in the
Listing Rules) and that the Controlling Shareholders do not take any action
that would prevent the Company from complying with or circumventing the
Listing Rules. The Relationship Agreement will stay in eect until the earlier
of: (i) the Controlling Shareholders ceasing to own in aggregate an interest in
at least 10% or more of the Ordinary Shares in the Company (or an interest
which carries 10% or more of the aggregate voting rights in the Company from
time to time); or (ii) the Ordinary Shares ceasing to be listed on the premium
listing segment of the Ocial List and admitted to trading on the London Stock
Exchange’s Main Market for listed securities. The Company has complied with
the independence provisions included in the Relationship Agreement and, so
far as the Company is aware, such provisions have been complied with during
the period under review by the Controlling Shareholders and their associates.
Significant contracts and change of control
The Company has a large number of contractual arrangements which it
believes are essential to the business of the Company. These can be split
into three main categories, which are a committed bank facility, prime broker
arrangements, and market data and technology contracts. The committed
bank facility includes provisions which may, on a change of control, require any
outstanding borrowings to be repaid or result in termination of the facilities.
The Group’s share and incentive plans include usual provisions relating to
change of control. There are no agreements providing for compensation for
the Directors or employees on a change of control.
Directors’ report continued
116 – CMC Markets plc
Annual Report and Financial Statements 2024
Statutory information contained elsewhere in the report
Information required to be part of this Directors’ report can be found elsewhere in the Annual Report as indicated below. These sections are deemed to be
incorporated by reference into the Directors’ report:
Information Location in Annual Report
Section 172 statement and stakeholder engagement (including clients and suppliers) Pages 23 to 27
Employees (employment of disabled persons and employee engagement) Pages 35 to 38
Employee share schemes Note 31, pages 171 to 173
Financial risk management, objectives and policies Note 30, pages 165 to 170
Future developments Page 16
Internal controls over financial reporting Page 82
Directors’ interests in shares of the Company Pages 110 and 114
Related party transactions Note 33, page 173
Greenhouse gas emissions, energy consumption and energy efficiency action Page 40
TCFD/SECR disclosures Pages 42 to 51
Disclosure table pursuant to Listing Rule LR 9.8.4C
Listing Rule Information to be included Disclosure
9.8.4(1) Interest capitalised by Group. None.
9.8.4(2) Unaudited financial information (LR 9.2.18R). None.
9.8.4(4) Long-term incentive scheme information involving Board Directors
(LR 9.4.3R).
Details can be found on pages 106 to 110 of the Directors’
remunerationreport.
9.8.4(5) Waiver of emoluments by a Director. None.
9.8.4(6) Waiver of future emoluments by a Director. None.
9.8.4(7) Non-pre-emptive issues of equity for cash. None.
9.8.4(8) Non-pre-emptive issues of equity for cash in relation to major
subsidiary undertakings.
None.
9.8.4(9) Listed company is a subsidiary of another company. Not applicable.
9.8.4(10) Contracts of significance involving a Director or a Controlling
Shareholder.
None, except for Lord Cruddas’ service contract.
9.8.4(11) Contracts for the provision of services by a Controlling Shareholder. None, except for Lord Cruddas’ service contract.
9.8.4(12) Shareholder waiver of dividends. The trustees of the CMC Markets plc Employee Share Trust have a dividend
waiver in place in respect of Ordinary Shares which are its beneficial property.
9.8.4(13) Shareholder waiver of future dividends. The trustees of the CMC Markets plc Employee Share Trust have a dividend
waiver in place in respect of Ordinary Shares which are its beneficial property.
9.8.4(14) Agreement with Controlling Shareholder. See Controlling Shareholder disclosure on page 116 of the Directors’ report.
Substantial shareholdings
Information provided to the Company by substantial shareholders pursuant
to the DTRs is published via a Regulatory Information Service and on the
Company’s website. The table below sets out details of the shareholdings
of Lord Peter Andrew Cruddas and Mrs Fiona Cruddas and further provides
details of the interests in the voting rights of the Company’s Ordinary issued
share capital as at 31 March 2024, notified to the Company under DTR5.
Holdings may have changed since being notified to the Company as
notification of any change is not required until the next applicable threshold
is crossed.
Shareholder
As at 31 March 2024
Number of
voting rights
% of
voting rights
Lord Peter Andrew Cruddas 165,155,374 59.02
Aberforth Partners LLP 14,741,475 5.27
Schroders plc 14,167,409 5.06
Mrs Fiona Cruddas 8,994,364 3.21
Between the year end and 13 June 2024 (being the latest practicable date)
there have been no changes notified to us in respect of these holdings.
The shareholdings of CMC Markets plc Directors are listed within the
Directors’ remuneration report on pages 110.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 117
Annual Report and Financial Statements 2024
Articles of Association
Any amendments to the Company’s Articles of Association may only be made
by passing a special resolution at a general meeting of the shareholders of
the Company.
Research and development
The Group continues to invest in the development of the trading and investing
platforms in addition to maintaining existing infrastructure, with considerable
eort applied by the technical and software development teams. In addition,
the Group has capitalised development costs relating to new product
and functionality development. During the year development expenditure
amounting to £11.7 million has been capitalised (2023: £11.3million).
Directors’ statement as to disclosure of information
to auditor
The Directors who held oce at the date of approval of this Directors’
report confirm that, so far as they each are aware, there is no relevant audit
information (being information needed by the external auditor in connection
with preparing its audit report) of which the Company’s external auditor is
unaware, and each Director has taken all the steps that he or she is obliged
to take as a Director in order to make himself/herself aware of any relevant
audit information and to establish that the Company’s auditor is aware of
that information. This confirmation is given pursuant to Section 418 of the
Companies Act 2006.
Independent auditor
In accordance with Section 489 and Section 492 of the Companies Act 2006,
resolutions to reappoint Deloitte LLP as the Company’s auditor and authorise
the Group Audit Committee to determine the auditor’s remuneration will be put
to the 2024 AGM.
Political donations
No political donations were made by the Company during the year.
Annual General Meeting
The 2024 AGM is to be held at 10:00 a.m. on Thursday 25 July 2024 at
133Houndsditch, London EC3A 7BX.
Due to the Controlling Shareholder disclosure on page 116, the independent
shareholders’ voting results on the re-election of independent Non-Executive
Directors (excluding the Chairman) will be disclosed when the voting
results are published. Should the required percentage of the independent
shareholders’ vote to approve re-election not be achieved, then a further vote
will be held at a subsequent general meeting within the prescribed time period.
Events after the reporting period
Details of events occurring subsequent to the year end are made in note 36.
Statement of Directors’ responsibilities in respect
of the Financial Statements
The Directors are responsible for preparing the Annual Report and the
Financial Statements in accordance with applicable law and regulation.
Company law requires the Directors to prepare Financial Statements for each
financial year. Under that law the Directors have prepared the Group and
the parent company Financial Statements in accordance with UK-adopted
International Accounting Standards.
Under company law the Directors must not approve the Financial Statements
unless they are satisfied that they give a true and fair view of the state of aairs
of the Group and parent company and of the profit or loss of the Group for that
period. In preparing the Financial Statements, the Directors are required to:
– select suitable accounting policies and then apply them consistently;
– state whether applicable UK-adopted International Accounting Standards
have been followed, subject to any material departures disclosed and
explained in the Financial Statements;
– make judgements and accounting estimates that are reasonable and
prudent; and
– prepare the Financial Statements on the going concern basis unless it is
inappropriate to presume that the Group and parent company will continue
in business.
The Directors are also responsible for safeguarding the assets of the Group
and parent company and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
The Directors are responsible for keeping adequate accounting records
that are sucient to show and explain the Group and parent company’s
transactions and disclose with reasonable accuracy at any time the financial
position of the Group and parent company and enable them to ensure that the
Financial Statements and the Directors’ remuneration report comply with the
Companies Act 2006.
The Directors are responsible for the maintenance and integrity of the
parent company’s website. Legislation in the United Kingdom governing
the preparation and dissemination of Financial Statements may dier from
legislation in other jurisdictions.
Directors’ confirmations
The Directors consider that the Annual Report and Financial Statements,
taken as a whole, is fair, balanced and understandable and provides the
information necessary for shareholders to assess the Group and parent
company’s position and performance, business model and strategy.
Each of the Directors, whose names and functions are listed on pages 72 to 74,
confirm that, to the best of their knowledge:
– the Group and parent company Financial Statements, which have been
prepared in accordance with UK-adopted International Accounting
Standards, give a true and fair view of the assets, liabilities and financial
position of the Group and parent company and of the profit of the
Group; and
– the Strategic report includes a fair review of the development and
performance of the business and the position of the Group and parent
company, together with a description of the principal risks and uncertainties
that it faces.
The Annual Report and Financial Statements were approved by the Board on
20 June 2024.
By order of the Board
Roy Tooley
Company Secretary
20 June 2024
CMC Markets plc
Registered number: 05145017
Directors’ report continued
118 – CMC Markets plc
Annual Report and Financial Statements 2024
Financial
statements
Financial statements
120 Independent auditor’s report
129 Consolidated income statement
130 Consolidated statement of comprehensive income
131 Consolidated statement of financial position
132 Parent company statement of financial position
133 Consolidated statement of changes in equity
134 Parent company statement of changes in equity
135
Consolidated and parent company statements of cash flows
136 Notes to the consolidated and parent company
financial statements
Shareholder information
174 Shareholder information
180 Appendices
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 119
Annual Report and Financial Statements 2024
Independent auditor’s report
To the members of CMC Markets plc
Report on the audit of the Financial Statements
1. Opinion
In our opinion:
– the Financial Statements of CMC Markets plc (the “parent company”) and its subsidiaries (the “Group”) give a true and fair view of the state of the Group’s and
of the parent company’s aairs as at 31 March 2024 and of the Group’s profit for the year then ended;
– the Group Financial Statements have been properly prepared in accordance with United Kingdom adopted international accounting standards;
– the parent company Financial Statements have been properly prepared in accordance with United Kingdom adopted international accounting standards and
as applied in accordance with the provisions of the Companies Act 2006; and
– the Financial Statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the Financial Statements which comprise:
– the Consolidated Income Statement;
– the Consolidated Statement of Comprehensive Income;
– the Consolidated Statement of Financial Position;
– the Parent Company Statement of Financial Position;
– the Consolidated and Parent Company Statements of Changes in Equity;
– the Consolidated and Parent Company Statements of Cash Flows;
– the related notes 1 to 36.
The financial reporting framework that has been applied in the preparation of the Group Financial Statements is applicable law and United Kingdom adopted
international accounting standards. The financial reporting framework that has been applied in the preparation of the parent company Financial Statements is
applicable law and United Kingdom adopted international accounting standards and as applied in accordance with the provisions of the Companies Act 2006.
2. Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities under those standards
are further described in the auditor’s responsibilities for the audit of the Financial Statements section of our report.
We are independent of the Group and the parent company in accordance with the ethical requirements that are relevant to our audit of the Financial Statements
in the UK, including the Financial Reporting Council’s (the “FRC’s”) Ethical Standard as applied to listed public interest entities, and we have fulfilled our other
ethical responsibilities in accordance with these requirements. The non-audit services provided to the Group and parent company for the year are disclosed in
note 8 to the Financial Statements. We confirm that we have not provided any non-audit services prohibited by the FRC’s Ethical Standard to the Group or the
parent company.
We believe that the audit evidence we have obtained is sucient and appropriate to provide a basis for our opinion.
120 – CMC Markets plc
Annual Report and Financial Statements 2024
Report on the audit of the Financial Statements continued
3. Summary of our audit approach
Key audit matters
The key audit matters that we identified in the year ending 31 March 2024 (“FY24”) were:
– capitalisation and impairment of internally developed software; and
– IT access management and controls over service organisations.
Within this report, key audit matters are identified as follows:
!!
Newly identified Increased level of risk Similar level of risk Decreased level of risk
Materiality
The materiality that we used for the Group Financial Statements was £2.80 million (FY23: £2.6 million), which was
determined on the basis of 0.70% of Net Assets (FY23: 5.0% of Profit before Tax from Continuing Operations (“PBT”)).
We revised the benchmark applied in our determination of materiality in FY24 due to the stability of Net Assets, relative to
PBT, whilst maintaining appropriate regard to the Financial Statements as a whole.
Scoping
We have identified five entities which are subject to full-scope audit procedures and thirteen entities which are subject to
audit procedures on specified account balances.
Our Group audit achieved a coverage of 99.5% of Group Total Assets, 99.6% of Group Revenue, and 99.0% of Group PBT
across management’s business segments.
Significant changes in our
approach
Key audit matters in FY23 related to:
– “the carrying value of intangible assets under development relating to CMC Invest”; and
– “presentation of positions with hedging counterparties”.
We did not consider the “Presentation of positions with hedging counterparties” to continue as a key audit matter into FY24,
due to enhancements in the control environment, and considerations previously made as regards the accounting and
presentation of these relationships.
The FY23 key audit matter, “Carrying value of intangible assets under development relating to CMC Invest”, has been
expanded in FY24 to comprise a broader scope of internally developed software intangible assets capitalised, and
evaluated for impairment, as of 31 March 2024. The key audit matter is revised in FY24 as: “Capitalisation and development
of internally developed software”. This is predominantly due to the implementation of a number of strategic initiatives across
the Group, including new business lines, as well as the unobservability of revenue and cost projections in respect of these
projects, exacerbated by recent profitability challenges.
We have introduced a new key audit matter in FY24: “IT access management and controls over service organisations”,
due to the criticality of the IT infrastructure to the Group’s operations, IT deficiencies in these areas which were observed in
FY23 and which persist into FY24, as well as management’s ongoing programme of remediation which requires significant
validation work in support of our audit.
4. Conclusions relating to going concern
In auditing the Financial Statements, we have concluded that the Directors’ use of the going concern basis of accounting in the preparation of the Financial
Statements is appropriate.
Our evaluation of the Directors’ assessment of the Group’s and parent company’s ability to continue to adopt the going concern basis of accounting included:
– obtaining an understanding of management’s process to arrive at their conclusion to prepare the Financial Statements on a going concern basis;
– with the involvement of our regulatory specialists, challenging the liquidity and capital stress testing assumptions used by management, including
consideration of regulatory enquiries/observations, management actions and whether applied stresses were reasonable in the context of the Group’s and
parent company’s operating environment;
– with the involvement of our regulatory specialists, where relevant, assessing emerging operational, regulatory and market risks facing entities within the Group,
and the parent company, including the impact of volatility in global financial markets and management’s strategic initiatives;
– evaluated the underlying causes and impact of adverse trading updates issued by the Group throughout FY24, and considered the ongoing viability of the
Group, its business model and operations;
– assessing the key assumptions supporting the Group’s and parent company’s latest budget forecasts;
– assessing the historical accuracy of forecasts prepared by management; and
– assessing the appropriateness of going concern disclosures made in the notes to the Financial Statements.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may
cast significant doubt on the Group’s and parent company’s ability to continue as a going concern for a period of at least 12 months from when the Financial
Statements are authorised for issue.
In relation to the reporting on how the Group has applied the UK Corporate Governance Code, we have nothing material to add or draw attention to in relation to
the Directors’ statement in the Financial Statements about whether the Directors considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 121
Annual Report and Financial Statements 2024
Report on the audit of the Financial Statements continued
5. Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Financial Statements of the current period
and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified. These matters included those which had
the greatest eect on the overall audit strategy; the allocation of resources in the audit; and directing the eorts of the engagement team.
These matters were addressed in the context of our audit of the Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
5.1. Capitalisation and impairment of internally developed software
Key audit
matter
description
The Group, as part of its strategic initiatives, is extending a number of product oerings and continues to capitalise costs associated with
internally developed software supporting these initiatives.
As of 31 March 2024, the Group has capitalised a total of £12.2 million of intangible assets, of which £11.7 million relates to internally generated
software. Further details are included in note 12 to the financial statements.
Capitalisation of expenditure on internally generated intangible assets is subjective and involves judgement on the part of management in
respect of whether such expenditure qualifies for recognition in accordance with International Accounting Standard 38: Intangible Assets (“IAS 38”).
Capitalised expenditure comprises the time spent on the development of the intangible asset, by both internal sta and external contractors.
A high degree of management judgement is required to assess capitalised expenditure for impairment, particularly given management’s
focus on cost control. This is due to subjectivity in developing accurate forecasts to support value-in-use (“VIU”) assessments, particularly
where the business is at a nascent stage and where the operating environment is not easily predictable. Given the subjective nature of the key
assumptions underpinning these forecasts and their unobservability with reference to available, external market data; we have deemed this to
be a key audit matter.
Discount rates, useful economic life, nominal cash flows from other business lines, and business-to-business (“B2B”) revenues represent
significant sources of estimation uncertainty, as disclosed in Note 1 on page 137.
This matter is also discussed in the Group Audit Committee Report on pages 83 to 86.
How the scope
of our audit
responded to
the key audit
matter
We obtained a detailed understanding of the relevant controls established by the Group over the capitalisation of expenses, as well as the
associated controls and financial reporting processes supporting the determination of CGUs and impairment. Our audit procedures in
respect of capitalisation and impairment included the following:
– an identification of projects and the associated capitalised costs across the Group;
– an evaluation of whether costs were eligible for capitalisation, in accordance with IAS 38;
– an assessment of the appropriateness of the basis of measurement model supporting the VIU assessment;
– an evaluation of management’s valuation methodologies with reference to standard valuation practices;
– the development of independent key valuation assumptions to the value-in-use calculation, which were compared against the inputs used
by management;
– involving our corporate finance specialists to apply specialist knowledge and audit procedures tailored for inherent valuation risk as
described above;
– obtaining an understanding of the methodology applied in management’s assessment of whether objective evidence of an impairment
loss exists; and
– an evaluation of the appropriateness of associated disclosures.
Key
observations
Through our procedures we concluded that the carrying value of the intangible assets are based on reasonable, supportable assumptions,
and that key assumptions, impairment charges recognised during the year and sensitivities have been appropriately disclosed in note 12.
However, there are a number of control enhancements that Group management are in the process of implementing . These include key
controls over the capitalisation of sta costs, and the ongoing assessment of impairment triggers and conclusions on assets.
Independent auditor’s report continued
To the members of CMC Markets plc
122 – CMC Markets plc
Annual Report and Financial Statements 2024
Report on the audit of the Financial Statements continued
5. Key audit matters continued
5.2. IT access management and controls over service organisations
!!
Key audit
matter
description
The processing and recording of transactions across the Group, in particular revenue, cash and hedging transactions, is supported
by a complex information technology (“IT”) environment. Alongside its proprietary IT systems, the Group relies on a number of service
organisations to facilitate key operational and financial reporting processes, including externally facing reconciliation controls.
As part of our FY23 audit, we identified control deficiencies in respect of logical access management (including privileged access and
segregation of duties), as well as controls over service organisations (the “Deficiencies”). Management continue to undertake a programme
ofremediation of the Deficiencies, therefore a number of these persisted into FY24.
Our IT audit scoping of relevant applications and underlying infrastructure is determined by the identification of significant accounts,
disclosures and relevant flows of transactions, which translates to system-generated information or automated controls on which we seek
to rely. Our approach is further informed by a risk assessment of the IT environment; considering factors such as the existing Deficiencies,
system changes and implementations, data migrations, and operational or cyber incidents.
Our planned audit approach sought to place reliance on the eectiveness of internal controls, and therefore key IT controls, across relevant
transaction flows.
As mentioned above, management has been undertaking a remediation programme to address the Deficiencies, with the objective of
ensuring controls across the IT control environment operate consistently and eectively. However, a number of elements of management’s
remediation programme remained outstanding for most, or at the close, of the financial year, in particular those deficiencies pertaining to
logical access management. As a result, this required increased audit eort to either identify mitigating controls, or to perform supplementary
substantive testing - including exploitation testing - in a number of areas.
How the scope
of our audit
responded
to the key
audit matter
We involved our IT specialists to test access management controls over key applications, operating systems and databases relied upon by
management for operational and financial reporting processes. We also involved our IT specialists to test controls over service organisations.
Specifically, the procedures included:
– obtaining an understanding, including through walkthrough meetings with application, infrastructure and key report owners, to support our
evaluation of General IT Controls (“GITCs”) and, where relevant, key automated controls;
– evaluated the appropriateness of privileged access granted across the full year;
– where relevant, testing key controls to determine whether these operated consistently and as designed across the full year; and
– evaluating management’s remedial activity throughout the audit period and, where relevant, evaluating risk mitigation procedures,
including through reviews of the management’s risk and impact assessments.
Our audit procedures in respect of accounts, classes of transactions and disclosures and where we planned, but were ultimately unable,
torely on internal controls - including IT controls - were predominantly substantive in nature.
Key
observations
Although we observed an improvement in respect of privileged access and segregation of duties controls over systems determined as
relevant to our FY24 audit, a number of planned remedial actions had not been implemented for the full year, or remained outstanding as
at year-end. This led to increased audit eort to identify and test mitigating controls, where possible; or perform substantive procedures
throughout the year.
6. Our application of materiality
6.1. Materiality
We define materiality as the magnitude of misstatement in the Financial Statements that makes it probable that the economic decisions of a reasonably
knowledgeable person would be changed or influenced. We use materiality both in planning the scope of our audit work and in evaluating the results of our work.
Based on our professional judgement, we determined materiality for the Financial Statements as a whole as follows:
Group Financial Statements Parent company Financial Statements
Materiality
£2.80 million (FY23: £2.60 million) £1.69 million (FY23: £1.68 million)
Basis for
determining
materiality
0.70% of Net Assets (FY23: 5.00% of Profit before Tax) 1.00% of Net Assets (FY23: 1.00% of Net Assets)
Rationale for
the benchmark
applied
We revised the benchmark applied in our determination of materiality
in FY24 due to the stability of Net Assets, relative to PBT. We
maintained appropriate regard to the Financial Statements as a whole
by comparing our materiality to acceptable ranges derived using
other applicable benchmarks, including PBT.
We have used 1% of Net Assets as the materiality benchmark as
the parent company of the Group primarily holds investments in
underlying subsidiaries.
Net Assets is an appropriate basis for materiality as CMC Markets plc
is a holding company for the Group, therefore this measure would be
significant to the users of the Financial Statements.
This is consistent with the benchmark and threshold used in the
prior year.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 123
Annual Report and Financial Statements 2024
Report on the audit of the Financial Statements continued
6. Our application of materiality continued
6.1. Materiality continued
6.2. Performance materiality
We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and undetected misstatements exceed
the materiality for the Financial Statements as a whole.
Group Financial Statements Parent company Financial Statements
Performance materiality
65% (FY23: 70%) of Group materiality 70% (FY23: 70%) of parent company materiality
Basis and rationale for
determining performance
materiality
In determining performance materiality, we considered the following factors:
– the quality of the control environment and our ability to rely on controls;
– control observations identified by Deloitte and internal audit;
– high turnover of operational and accounting personnel; and
– the nature, volume and size of misstatements identified in the prior year audit.
6.3. Error reporting threshold
We agreed with the Group Audit Committee that we would report to the Committee all audit dierences in excess of £140,000 (FY23: £130,000), as well as
dierences below that threshold that, in our view, warranted reporting on qualitative grounds. We also report to the Group Audit Committee on disclosure matters
that we identified when assessing the overall presentation of the Financial Statements.
7. An overview of the scope of our audit
7.1. Identification and scoping of components
The scope of our Group audit was determined by obtaining an understanding of the Group and its environment, including Group-wide controls and our
assessment of the risks of material misstatement at the level of the Group Financial Statements. The Group comprises several entities globally and has
operations in over ten countries. As such, a portion of our audit planning eort was dedicated to ensuring that the scope of work performed is appropriate in order
to address the identified risks of material misstatement.
The factors that we considered when assessing the scope of the CMC Markets plc audit, and the level of work to be performed at the entities that are in scope for
Group reporting purposes, include the following:
– the nature of the Group and the parent company, how entities are organised, and the significant extent of centralisation of the control environment and the
processing of transactions across the Group;
– the financial significance of an entity to the Group’s PBT, Revenue and Total Assets, including consideration of the financial significance of specific account
balances or transactions;
– the eectiveness of the control environment and monitoring activities, including entity-level controls; and
– findings, observations and audit dierences that we noted during the prior year audit.
Net assets
Group materiality
Net Assets £403.93 million
Group materiality £2.80 million
Component materiality range
£1.30 million to £2.50 million
Group Audit Committee
reporting threshold
£0.14 million
Independent auditor’s report continued
To the members of CMC Markets plc
124 – CMC Markets plc
Annual Report and Financial Statements 2024
Report on the audit of the Financial Statements continued
7. An overview of the scope of our audit continued
7.1. Identification and scoping of components continued
As a result, we identified five entities which are significant to the Group (FY23: three entities). Three of these entities are financially significant (FY23: three entities)
and two entities are significant due to their nature or specific circumstances. All five entities are subject to full scope audit procedures. Our audit procedures in
respect of these entities were performed to a materiality in the range of £1.3 million - £2.5 million (FY23: £1.3 million - £2.5 million).
In addition, audit procedures on specified account balances were performed across 13 entities (FY23: six entities) which were not considered to be
financiallysignificant.
The remaining entities are not individually significant to the Group, and include a number of small, low risk entities and balances. On aggregate, these represent
1.0% of Group PBT (FY23: 2%), 0.4% of Group Revenue (FY23: 1%) and 0.5% of Group Total Assets (FY23: 1%). For these entities, we performed analytical
reviews and undertook additional risk assessment procedures. We also tested management’s Group-wide controls across these entities. We concluded that
through these additional procedures, we have reduced the audit risk of the detection of a material misstatement to a suciently low level.
Audit procedures were performed for entities subject to full-scope audit and audit of specified account balances by audit teams based in both the UK (Group
audit team) and Australia. The performance of certain specified procedures was requested of our audit team in Germany, in respect of regulatory matters and the
completeness of provisions and contingent liabilities.
The audit of the Group consolidation is performed by the Group audit team. In addition, the Group audit team performed audit procedures over the Group’s global
trading revenue (CFD), and the corresponding Trade Receivables.
7.2. Our consideration of the control environment
Our planned audit approach was to place reliance on management’s relevant controls where we found the controls to be designed and operating eectively.
We scoped in certain controls – considered to be relevant controls – for further testing procedures. For each relevant control, our testing procedures comprised
gaining an understanding of the control and, where possible, the testing of a sample of control iterations across the year to determine the operating eectiveness.
These procedures consisted of a combination of enquiry, observation, inspection and reperformance. Specifically with regards to announced redundancies in
force, our testing procedures considered whether the wider control environment was compromised.
In certain situations, we were not able to rely on controls due to identified deficiencies in internal control, including IT controls, and where insucient mitigating or
alternative controls could instead be relied upon. In such situations, we adopted a fully substantive approach. All control deficiencies which we considered to be
significant were communicated to the Group Audit Committee. Please refer to the Group Audit Committee Report on pages 83 to 86. All other deficiencies were
communicated to management. For all deficiencies identified, we considered the impact on our audit plan and the need to adjust our audit approach accordingly.
Please see our Key Audit Matters section on page 123 above for further considerations in respect of our work over the Group’s IT environment.
7.3 Our consideration of climate-related risks
In planning our audit, we have considered the impact of climate change on the Group’s operations and subsequent impact on its Financial Statements. The Group
sets out its assessment of the potential impact on pages 42 to 51 of the Strategic Report of the Annual Report.
We have held discussions with management to understand their:
– process for identifying aected operations, including governance and controls over this process, and the subsequent eect on the Group’s financial
reporting; and
– long-term strategy to respond to climate change risks as they evolve, including the impact on the Group’s forecasts.
Our audit work involved:
– obtaining an understanding of management’s analysis, used to inform the Group’s climate risk assessment; and
– assessing the suciency and extent of disclosures in the Annual Report and the consistency between the Financial Statements and the remainder of the
Annual Report.
Our audit procedures require us to read and consider these disclosures, and to evaluate whether they are materially inconsistent with the Financial Statements or
knowledge obtained in the performance of our audit. We did not identify any such material inconsistencies as a result of these procedures.
7.4. Working with other auditors
The Group audit team are responsible for the scope and direction of the audit process, and provide direct oversight, review, and coordination of our global audit
teams. We interacted regularly with these teams during each stage of the audit and reviewed key working papers. We maintained continuous and open dialogue
with them, in addition to holding formal meetings, such that we were fully aware of their progress and the results of their procedures.
The Group audit team conducted in-person visits, in addition to remote communication, to exercise engagement and oversight with our audit teams based in
Australia and Germany. These visits included discussions of the audit approach - including risk assessments – and of any issues arising from the audit team’s
work, meetings with local management, and reviews of key audit documentation on higher and significant risk areas in the interests of driving a consistent and
high-quality audit.
In addition, a global planning meeting was held virtually in September 2023, led by the Group audit team, partners and sta from full-scope entity audit teams, as
well as a global audit teams responsible for testing in support of local, statutory audits.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 125
Annual Report and Financial Statements 2024
Report on the audit of the Financial Statements continued
8. Other information
The other information comprises the information included in the Annual Report, other than the Financial Statements and our Auditor’s Report thereon. The
Directors are responsible for the other information contained within the Annual Report.
Our opinion on the Financial Statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express
any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Financial Statements
or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated.
If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in
the Financial Statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact.
We have nothing to report in this regard.
9. Responsibilities of Directors
As explained more fully in the Directors’ responsibilities statement, the Directors are responsible for the preparation of the Financial Statements and for being
satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of Financial Statements
that are free from material misstatement, whether due to fraud or error.
In preparing the Financial Statements, the Directors are responsible for assessing the Group’s and the parent company’s ability to continue as a going concern,
disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the
Group or the parent company or to cease operations, or have no realistic alternative but to do so.
10. Auditor’s responsibilities for the audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the Financial Statements as a whole are free from material misstatement, whether due
to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an
audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of
these Financial Statements.
A further description of our responsibilities for the audit of the Financial Statements is located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities.
This description forms part of our Auditor’s Report.
11. Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above,
to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including
fraud is detailed below.
11.1. Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we
considered the following:
– the nature of the industry and sector, control environment and business performance, including the design of the Group’s remuneration policies, key drivers for
Directors’ remuneration and bonus levels;
– the Group’s own assessment of the risks that irregularities may occur either as a result of fraud or error that was approved by the Board on 31 May 2023;
– results of our enquiries of management, internal audit, Directors, and the Group Audit Committee about their own identification and assessment of the risks of
irregularities, including those that are specific to the Group’s sector;
– any matters we identified having obtained and reviewed the Group’s documentation of their policies and procedures relating to:
• identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance;
• detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud; and
• the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations; and
– the matters discussed among the audit engagement team, including financially significant component audit teams, and relevant internal specialists, including
tax, IT, valuations (corporate finance) and regulatory specialists regarding how and where fraud might occur in the Financial Statements and any potential
indicators of fraud. These discussions also involved fraud specialists with whom the engagement team discussed fraud schemes that had arisen in similar
sectors and industries.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest
potential for fraud relating to Capitalisation and impairment of internally developed software.
In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.
Independent auditor’s report continued
To the members of CMC Markets plc
126 – CMC Markets plc
Annual Report and Financial Statements 2024
Report on the audit of the Financial Statements continued
11. Extent to which the audit was considered capable of detecting irregularities, including fraud continued
11.1. Identifying and assessing potential risks related to irregularities continued
We also obtained an understanding of the legal and regulatory frameworks of the jurisdictions in which the Group operates, focusing on provisions of those laws
and regulations that had a direct eect on the determination of material amounts and disclosures in the Financial Statements. The key laws and regulations we
considered in this context included the UK Companies Act, as well as those laws and regulations prevailing in each country in which identified a full-scope entity,
including taxation legislation.
In addition, we considered provisions of other laws and regulations that do not have a direct eect on the Financial Statements but compliance with which may
be fundamental to the Group’s ability to operate or to avoid a material penalty. These included the Group’s obligations under jurisdictional regulatory regimes,
including consumer duty, transaction reporting, and prudential regulation.
11.2. Audit response to risks identified
As a result of performing the above, we identified the capitalisation and impairment of internally developed software as a key audit matter related to the potential
risk of fraud. The key audit matters section of our report explains the matter in more detail and also describes the specific procedures we performed in response
to that key audit matter.
In addition to the above, our procedures to respond to risks identified included the following:
– reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations
described as having a direct eect on the Financial Statements;
– enquiring of management, the Group Audit Committee, in-house and external legal counsel concerning actual and potential litigation and claims;
– performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
– reading minutes of meetings of those charged with governance, reviewing internal audit reports and reviewing correspondence with relevant tax authorities
and regulatory bodies;
– in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing
whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant
transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members, including internal specialists and
global audit teams, and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
Report on other legal and regulatory requirements
12. Opinions on other matters prescribed by the Companies Act 2006
In our opinion the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
– the information given in the Strategic Report and the Directors’ Report for the financial year for which the Financial Statements are prepared is consistent with
the Financial Statements; and
– the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent company and their environment obtained in the course of the audit, we have not
identified any material misstatements in the Strategic Report or the Directors’ Report.
13. Corporate Governance Statement
The Listing Rules require us to review the Directors’ statement in relation to going concern, longer-term viability and that part of the Corporate Governance
Statement relating to the Group’s compliance with the provisions of the UK Corporate Governance Code specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance Statement is materially
consistent with the Financial Statements and our knowledge obtained during the audit:
– the Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material uncertainties identified set
out on page 58;
– the Directors’ explanation as to its assessment of the Group’s prospects, the period this assessment covers and why the period is appropriate set out on pages
57 and 58;
– the Directors’ statement on fair, balanced and understandable set out on page 81;
– the Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page 59;
– the section of the Annual Report that describes the review of eectiveness of risk management and internal control systems set out on page 82; and
– the section describing the work of the Group Audit Committee set out on pages 83 to 86.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 127
Annual Report and Financial Statements 2024
Report on other legal and regulatory requirements continued
14. Matters on which we are required to report by exception
14.1. Adequacy of explanations received and accounting records
Under the Companies Act 2006 we are required to report to you if, in our opinion:
– we have not received all the information and explanations we require for our audit; or
– adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not
visited by us; or
– the parent company Financial Statements are not in agreement with the accounting records and returns.
We have nothing to report in respect of these matters.
14.2. Directors’ remuneration
Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures of Directors’ remuneration have not been made or the part of
the Directors’ Remuneration Report to be audited is not in agreement with the accounting records and returns.
We have nothing to report in respect of these matters.
15. Other matters which we are required to address
15.1. Auditor tenure
Following the recommendation of the Group Audit Committee, we were appointed by the members on 28 July 2022 to audit the Financial Statements for the year
ending 31 March 2023 and subsequent financial periods. The period of total uninterrupted engagement including previous renewals and reappointments of the
firm is two years, covering the years ending 31 March 2023 to 31 March 2024.
15.2. Consistency of the audit report with the additional report to the Group Audit Committee
Our audit opinion is consistent with the additional report to the Group Audit Committee we are required to provide in accordance with ISAs (UK).
16. Use of our report
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To
the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our
audit work, for this report, or for the opinions we have formed.
As required by the Financial Conduct Authority (“FCA”) Disclosure Guidance and Transparency Rule (“DTR”) 4.1.15R – DTR 4.1.18R, these Financial Statements
will form part of the Electronic Format Annual Financial Report filed on the National Storage Mechanism of the FCA in accordance with DTR 4.1.15R – DTR 4.1.18R.
This Auditor’s Report provides no assurance over whether the Electronic Format Annual Financial Report has been prepared in compliance with DTR 4.1.15R –
DTR 4.1.18R.
Fiona Walker, FCA (Senior Statutory Auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
London, United Kingdom
20 June 2024
Independent auditor’s report continued
To the members of CMC Markets plc
128 – CMC Markets plc
Annual Report and Financial Statements 2024
Consolidated income statement
For the year ended 31 March 2024
GROUP Note
Year endedYear ended
31 March 202431 March 2023
£’000£’000
Revenue
324,702
311 , 2 10
Interest income on own funds
11, 24 6
4, 761
Income on client funds
23 ,797
9,1 6 6
Total revenue
4
359,7 45
325,137
Introducing partner commissions and betting levies
(26 , 96 2)
(3 6 , 71 4)
Net operating income
3
3 32 ,78 3
288,423
Operating expenses
5
(254,894)
(2 3 3 , 51 3)
Impairment of intangible assets*
(12 , 3 2 2)
(4 3 2)
Operating profit
65 ,5 67
5 4 , 478
Share of results of associates and joint ventures
(28 3)
—
Finance costs
7
(1 , 9 5 1)
(2, 3 15)
Profit before taxation
8
63,333
52 ,1 6 3
Taxation
9
(16 , 4 47)
(1 0 ,7 24)
Profit for the year attributable to owners of the parent
46,886
41 , 4 3 9
Earnings per share
Basic earnings per share
10
16 . 7p
14 .7p
Diluted earnings per share
10
16 . 7p
14 .6p
As permitted by Section 408 of the Companies Act 2006, the Company has not presented its own income statement or statement of comprehensive income.
TheCompany had no other comprehensive income.
* For the year ended 31 March 2023, impairment of intangible assets has been presented separately from Operating Expenses to align with the presentation for the year ended 31 March 2024.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 129
Annual Report and Financial Statements 2024
Consolidated statement of comprehensive income
For the year ended 31 March 2024
GROUP Note
Year endedYear ended
31 March 2024 31 March 2023
£’000£’000
Profit for the year
46,886
41 , 4 3 9
Other comprehensive (expense)/income:
Items that may be subsequently reclassified to income statement
Loss on net investment hedges, net of tax
27
—
(86)
Gains recycled from equity to the income statement
27
237
2 37
Currency translation differences
27
(5,285)
(1 , 760)
Changes in the fair value of debt instruments at fair value through other comprehensive income, net of tax
27
14 4
(2 10)
Other comprehensive expense for the year
(4 , 9 0 4)
(1 , 8 1 9)
Total comprehensive income for the year attributable to owners of the parent
41 , 9 8 2
39,620
130 – CMC Markets plc
Annual Report and Financial Statements 2024
Consolidated statement of financial position
At 31 March 2024
GROUP Note
31 March 202431 March 2023
£’000£’000
ASSETS
Non-current assets
Intangible assets
12
28,906
3 5, 3 42
Property, plant and equipment
13
28, 546
22,7 71
Deferred tax assets
14
6 ,1 7 7
4, 768
Financial investments
19
32
34
Trade and other receivables
16
2 ,75 3
2,666
Investments in associates
15
2 , 517
—
Total non-current assets
68 ,931
65 ,5 81
Current assets
Trade and other receivables
16
162 ,0 56
130,616
Derivative financial instruments
17
31,62 7
14, 2 31
Current tax recoverable
1, 917
9,066
Other assets
18
12 , 25 8
1,984
Financial investments
19
50, 88 9
3 0, 572
Amounts due from brokers
228,882
18 8 ,1 5 4
Cash and cash equivalents
20
160,300
146,218
Total current assets
64 7 ,929
5 2 0 , 8 41
Total assets
716, 860
586 ,42 2
LIABILITIES
Current liabilities
Trade and other payables
21
272 , 811
182, 284
Amounts due to brokers
6,982
8 ,927
Derivative financial instruments
17
7, 0 74
2,03 3
Lease liabilities
23
4,915
5 ,59 0
Current tax payable
2 ,14 7
431
Provisions
24
3,937
815
Total current liabilities
2 9 7, 8 6 6
200,080
Non-current liabilities
Lease liabilities
23
12 ,000
6, 2 28
Deferred tax liabilities
14
3, 24 4
4,012
Provisions
24
257
2 ,0 87
Total non-current liabilities
15, 501
12,327
Total liabilities
313, 367
212,40 7
EQUITY
Equity attributable to owners of the Company
Share capital
25
70, 57 3
70, 57 3
Share premium
25
46 ,23 6
46, 236
Capital redemption reserve
25
2 ,9 01
2,9 01
Own shares held in trust
26
(2 , 5 8 9)
(1, 5 09)
Other reserves
27
(5 5 , 4 3 9)
(50 , 5 3 5)
Retained earnings
3 41 , 8 11
306,3 49
Total equity
403,493
37 4,015
Total equity and liabilities
716,8 60
586 ,422
The Financial Statements on pages 129 to 173 were approved by the Board of Directors on 20 June 2024 and signed on its behalf by:
Lord Cruddas Albert Soleiman
Chief Executive Ocer e Officer Chief Financial Ocer Officer
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 131
Annual Report and Financial Statements 2024
Parent company statement of financial position
At 31 March 2024
Company registration number: 05145017
COMPANY Note
31 March 2024
£’000
31 March 2023
£’000
ASSETS
Non-current assets
Investment in subsidiary undertakings 15 168,448 167,090
Total non-current assets 168,448 167,090
Current assets
Trade and other receivables 16 5,547 1,932
Cash and cash equivalents 20 93 586
Total current assets 5,640 2,518
Total assets 174,088 169,608
LIABILITIES
Current liabilities
Trade and other payables 21 4,643 122
Share buyback liability — —
Total current liabilities 4,643 122
Total liabilities 4,643 122
EQUITY
Equity attributable to owners of the Company
Share capital 25 70,573 70,573
Share premium 25 46,236 46,236
Capital redemption reserve 25 2,901 2,901
Share buyback reserve 27 — —
Own shares held in trust 26 (2,589) (1,509)
Retained earnings at 1 April 51,285 78,396
Profit for the year attributable to the owners 13,072 33,763
Other changes in retained earnings (12,033) (60,874)
Retained earnings at 31 March 52,324 51,285
Total equity 169,445 169,486
Total equity and liabilities 174,088 169,608
The Financial Statements on pages 129 to 173 were approved by the Board of Directors on 20 June 2024 and signed on its behalfby:
Lord Cruddas Albert Soleiman
Chief Executive Ocer Chief Financial Ocer
132 – CMC Markets plc
Annual Report and Financial Statements 2024
Consolidated statement of changes in equity
For the year ended 31 March 2024
GROUP Note
Capital
ShareShareredemptionOwn sharesOtherRetainedTot al
capitalpremiumreserveheld in trustreservesearningsequity
£’000£’000£’000£’000£’000£’000£’000
At 1 April 2022
73 ,1 9 3
46, 236
281
(1 , 0 9 4)
(75 , 9 80)
3 2 6 , 24 2
36 8 , 878
Profit for the year
—
—
—
—
—
41 , 4 3 9
41 , 4 3 9
Loss on net investment hedges, net of tax
—
—
—
—
(86)
—
(8 6)
Gains recycled from equity to the income statement
—
—
—
—
237
—
2 37
Currency translation differences
—
—
—
—
(1 ,7 60)
—
(1 ,76 0)
Changes in the fair value of debt instruments at
fair value through other comprehensive income,
net of tax
—
—
—
—
(2 10)
—
(2 1 0)
Total comprehensive income for the year
—
—
—
—
(1 , 8 19)
41 , 4 3 9
39,620
Acquisition of own shares held in trust
26
—
—
—
(1 ,10 6)
—
—
(1 ,1 0 6)
Utilisation of own shares held in trust
26
—
—
—
691
—
—
691
Share buyback
25
(2, 62 0)
—
2,62 0
—
27, 26 4
(2 7, 2 6 4)
—
Share-based payments
—
—
—
—
—
972
97 2
Dividends
11
—
—
—
—
—
(35,040)
(35,040)
At 31 March 2023
70, 573
46, 236
2 , 901
(1 ,509)
(50, 53 5)
306,349
374,015
Profit for the year
—
—
—
—
—
46, 886
46,886
Gains recycled from equity to the income statement
—
—
—
—
237
—
237
Currency translation differences
—
—
—
—
(5,285)
—
(5,285)
Changes in the fair value of debt instruments at
fair value through other comprehensive income,
net of tax
—
—
—
—
144
—
144
Total comprehensive income for the year
—
—
—
—
(4 , 9 0 4)
46, 886
41 , 9 8 2
Acquisition of own shares held in trust
26
—
—
—
(1,788)
—
—
(1,788)
Utilisation of own shares held in trust
26
—
—
—
70 8
—
—
708
Share-based payments
—
—
—
—
—
1,388
1,388
Tax on share-based payments
—
—
—
—
—
876
876
Dividends
11
—
—
—
—
—
(13 ,6 8 8)
(13 ,6 8 8)
At 31 March 2024
70,57 3
46, 236
2 ,901
(2 , 5 89)
(5 5 ,4 3 9)
3 41 , 8 11
403 ,493
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 133
Annual Report and Financial Statements 2024
Parent company statement of changes in equity
For the year ended 31 March 2024
COMPANY Note
Share capital
£’000
Share premium
£’000
Capital
redemption
reserve
£’000
Share buyback
reserve
£’000
Own shares
held in trust
£’000
Retained
earnings
£’000
Total equity
£’000
At 1 April 2022 73,193 46,236 281 (27,264) (1,094) 78,396 169,74 8
Profit and total comprehensive income
for the year — — — — — 33,763 33,763
Acquisition of own shares held in trust 26 — — — — (1,106) — (1,106)
Utilisation of own shares held in trust 26 — — — — 691 — 691
Share-based payments — — — — — 1,430 1,430
Share buyback 25 (2,620) — 2,620 27,264 — (27, 264) —
Dividends 11 — — — — — (35,040) (35,040)
At 31 March 2023 70,573 46,236 2,901 — (1,509) 51,285 169,486
Profit and total comprehensive income
for the year — — — — — 13,072 13,072
Acquisition of own shares held in trust 26 — — — — (1,788) — (1,788)
Utilisation of own shares held in trust 26 — — — — 708 — 708
Share-based payments — — — — — 1,656 1,656
Share buyback 25 — — — — — — —
Dividends 11 — — — — — (13,689) (13,689)
At 31 March 2024 70,573 46,236 2,901 — (2,589) 52,324 169,445
134 – CMC Markets plc
Annual Report and Financial Statements 2024
Consolidated and parent company statements of cash flows
For the year ended 31 March 2024
GROUP
COMPANY
Year endedYear endedYear endedYear ended
31 March 202431 March 202331 March 2024 31 March 2023
Note£’000£’000£’000£’000
Cash flows from operating activities
Cash generated from operations
28
5 7, 1 3 9
7 6,584
1,032
607
Interest income
9,70 2
4 ,78 4
14
—
Income on client funds
23 ,797
9,1 6 6
Finance costs
(1 , 9 51)
(2, 31 5)
(42)
(318)
Tax paid
(8, 60 2)
(1 7, 0 6 0)
—
—
Net cash generated from operating activities
80,085
7 1 ,1 5 9
1,004
289
Cash flows from investing activities
Purchase of property, plant and equipment
(7, 6 3 2)
(7 ,091)
—
—
Investment in intangible assets
(12 , 24 4)
(2 1 ,1 3 0)
—
—
Purchase of financial investments
(95,4 12)
(1 7, 3 4 5)
—
—
Proceeds from maturity and disposal of financial investments
76 , 516
14,4 15
—
—
Outflow on net investment hedges
—
(8)
—
—
Investment in associates
(2 , 8 0 0)
—
—
—
Amounts contributed by subsidiaries in relation to share-based payments
—
—
281
1,001
Dividends received
—
—
13,698
34,260
Net cash (used in)/generated from investing activities
(41 , 5 7 2)
(3 1 ,1 5 9)
13,979
35,261
Cash flows from financing activities
Repayment of borrowings
—
(1 ,1 9 4)
—
—
Proceeds from borrowings
—
1,000
—
—
Principal elements of lease payments
(5 , 5 31)
(5, 454)
—
—
Acquisition of own shares
(1,78 8)
(1 ,1 0 6)
(1,788)
(1,106)
Payments for share buyback
—
(2 7, 26 4)
—
(27,264)
Dividends paid
(13 ,6 8 8)
(35,040)
(13,688)
(35,040)
Net cash used in financing activities
(21,007)
(6 9, 0 58)
(15,476)
(63,410)
Net increase/(decrease) in cash and cash equivalents
1 7, 5 0 6
(2 9, 05 8)
(493)
(27,860)
Cash and cash equivalents at the beginning of the year
20
14 6 , 21 8
176 , 5 78
586
28,446
Effect of foreign exchange rate changes
(3 , 4 24)
(1 , 3 0 2)
—
—
Cash and cash equivalents at the end of the year
20
160,300
146,218
93
586
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 135
Annual Report and Financial Statements 2024
Notes to the consolidated and parent company financial statements
For the year ended 31 March 2024
1. General information and basis of preparation
Corporate information
CMC Markets plc (the “Company”) is a public company limited by shares incorporated in the United Kingdom and domiciled in England and Wales under the
Companies Act 2006. The nature of the operations and principal activities of CMC Markets plc and its subsidiaries (collectively the “Group”) are set out in note 3.
Functional and presentation currency
Items included in the Financial Statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the
entity operates (the “functional currency”). The Group’s Financial Statements are presented in sterling (“GBP”), which is the Company’s functional and the Group’s
presentation currency. Foreign operations are included in accordance with the policies set out in note 2.
Going concern
The Directors have prepared the Financial Statements on a going concern basis, which requires the Directors to have a reasonable expectation that the Group
has adequate resources to continue in operational existence for a period of at least 12 months from the date of approval of the Financial Statements.
The Group has considerable financial resources, a broad range of products and a geographically diversified business. Consequently, the Directors believe that
the Group is well placed to manage its business risks in the context of the current economic outlook.
Accordingly, the Directors have reasonable expectation that the Group has adequate resources for that period of at least 12 months from the date of approval
of the Financial Statements and believe it is appropriate to adopt the going concern basis in preparing the Financial Statements. Further details are set out in the
viability statement on pages 57 and 58 .
Basis of accounting
The consolidated Financial Statements of the Group have been prepared in accordance with UK-adopted International Accounting Standards in conformity with the
requirements of the Companies Act 2006 and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom’s Financial Conduct Authority.
The Financial Statements have been prepared in accordance with the going concern basis, under the historical cost convention, except in the case of “Financial
instruments at fair value through profit or loss (“FVPL”)” and “Financial instruments at fair value through other comprehensive income (“FVOCI”)”. The financial
information is rounded to the nearest thousand except where otherwise indicated.
The Company and Group’s principal accounting policies adopted in the preparation of these Financial Statements are set out in note 2 below. These policies have
been consistently applied to all years presented, except for the adoption of the new accounting policies relating to investment in associates and cryptocurrency
assets held as intangible assets and new and revised standards as set out below. The Financial Statements presented are at and for the years ended 31 March
2024 and 31 March 2023. Financial annual years are referred to as 2024 and 2023 in the Financial Statements.
Application of new and revised accounting standards
The following standards and interpretations applied for the first time in the current financial year but do not have a significant impact on the Financial Statements
of the Company and the Group:
Amendments to IAS 1 “Presentation of Financial Statements” and IFRS Practice Statement 2 “Making Materiality Judgements” – Disclosure of
Accounting Policies
Amendments to IAS 12 “Income Taxes” – Deferred Tax related to Assets and Liabilities arising from a Single Transaction
Amendments to IAS 12 “Income Taxes” – International Tax Reform – Pillar Two Model Rules
Amendments to IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors” – Definition of Accounting Estimates
IFRS 17 “Insurance Contracts” (including the June 2020 and December 2021 Amendments to IFRS 17)
New accounting standards in issue but not yet eectiut not yet effective
At the date of authorisation of the Financial Statements, the following new standards and interpretations relevant to the Company and the Group were in issue but
not yet eective anot yet effective and have not been applied to the Financial Statements:
Amendments to IFRS 10 and IAS 28 – Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Application date yet to be confirmed)
Amendments to IAS 1 – Classification of Liabilities as Current or Non-current (Applicable from 1 January 2024, The Group will adopt this for the year ended 31
March 2025)
Amendments to IAS 1 – Non-current Liabilities with Covenants (Applicable from 1 January 2024, The Group will adopt this for the year ended 31 March 2025)
Amendments to IAS 7 and IFRS 7 – Supplier Finance Arrangements (Applicable from 1 January 2024, The Group will adopt this for the year ended 31
March 2025)
Amendments to IFRS 16 – Lease Liability in a Sale and Leaseback (Applicable from 1 January 2024, The Group will adopt this for the year ended 31 March 2025)
The Directors do not expect that the adoption of the standards listed above will have a material impact on the Financial Statements of the Company and the
Group in future periods.
136 – CMC Markets plc
Annual Report and Financial Statements 2024
1. General information and basis of preparation continued
Basis of consolidation
The Financial Statements incorporate the financial information of the Company and its subsidiaries. Subsidiaries are all entities over which the Group has control.
The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to aect thity to affect those
returns through its power to direct the activities of the entity.
CMC Markets plc became the ultimate holding company of the Group under a Group reorganisation in 2006. The pooling of interests method of accounting was
applied to the Group reorganisation as it fell outside the scope of IFRS 3 “Business Combinations”. The Directors adopted the pooling of interests method as they
believed it best reflected the true nature of the Group. All other business combinations have been accounted for by the acquisition method of accounting.
Under the acquisition method of accounting, the identifiable assets, liabilities and contingent liabilities of a subsidiary are measured initially at their fair values
at the date of acquisition, irrespective of the extent of any minority interest. The results of subsidiaries acquired or disposed of during the year are included in
the Consolidated Income Statement from the eectie effective date of acquisition or up to the eectip to the effective date of disposal, as appropriate. Acquisition-related costs are
expensed as incurred.
Where necessary, adjustments are made to the financial information of subsidiaries to bring the accounting policies used into line with those adopted by
the Group.
All inter-company transactions and balances and unrealised gains on transactions between Group companies are eliminated on consolidation. Unrealised losses
are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Critical accounting judgements and key sources of estimation uncertainty
The preparation of Financial Statements in conformity with IFRSs requires the use of certain significant accounting judgements. It also requires management
to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or where
assumptions and estimates are significant to the consolidated Financial Statements are:
Contingent liabilities
Judgement has been applied in evaluating the accounting treatment of the specific matters described in note 34 (Contingent Liabilities), notably the probability of
any obligation or future payments arising.
Accounting for cryptocurrencies
The Group has recognised £12,258,000 (31 March 2023: £1,984,000) of cryptocurrency assets and rights to cryptocurrency assets on its Consolidated
Statement of Financial Position as at 31 March 2024. These assets are used for hedging purposes and held for sale in the ordinary course of business. A
judgement has been made to apply the measurement principles of IFRS 13 “Fair Value Measurement” in accounting for these assets. The assets are presented as
“other assets” on the Consolidated Statement of Financial Position. Please refer to note 2 for the other assets accounting policy.
Intangible assets
The Group has recognised £12,901,000 (31 March 2023: £13,550,000) of customer relationship intangible on its Consolidated Statement of Financial Position
as at 31 March 2024 relating to the transaction with Australia and New Zealand Banking Group Limited (“ANZ”) to transition its portfolio of share investing clients
to CMC for AUD$25 million. A judgement has been made to apply the recognition and measurement principles of IAS 38 “Intangible Assets” in accounting for
these assets.
Key financial estimates
The Group has recognised £11,706,000 (31 March 2023: £11,316,000) of internally generated software in intangible assets on its Statement of Financial Position
as at 31 March 2024, including costs relating to the development of platforms for CMC Invest UK and cash equity oety offerings (cash equities cash-generating
unit (‘CGU’)). In performing the impairment assessment, which concluded that an impairment of £10,976,000 was required, it was determined that the
recoverable amount of the asset is a source of estimation uncertainty which is sensitive to the estimated future revenues from the cash equities CGU. We found
the recoverable amount of the intangible asset to have been based on reasonable, supportable assumptions. B2B revenue, discount rates, cost per funded
customer acquisition, customer retention rates, average portfolio sizes and client trading volumes represent significant source of estimation uncertainty. Relevant
disclosure is included in note 12.
2. Material accounting policy information
Total revenue
Revenue
Revenue comprises the fair value of the consideration received from the provision of online financial services in the ordinary course of the Group’s activities,
netofclinet of client rebates. Revenue is shown net of value added tax after eliminating sales within the Group.
The Group generates revenue principally from commissions, spreads and financing income associated with stockbroking and acting as a spread bet and
contracts for diects for difference market maker to its clients, and the transactions undertaken to hedge the resulting risks.
Trading – contracts for dier difference (“CFD”) and spread bet
Revenue from CFD and spread bet represents:
– fees paid by clients for commission and funding charges in respect of the opening, holding and closing of financial spread bets and contracts for dientracts for difference,
together with the spread and fair value gains and losses for the Group arising on client trading activity; less
– fees paid by the Group in commissions and funding charges arising in respect of hedging the risk associated with the client trading activity and the Group’s
currency exposures, together with the spread and fair value gains and losses incurred by the Group arising on hedging activity.
Spread and fair value gains and losses, commission and funding charges are accounted for in accordance with IFRS 9 “Financial Instruments” and IFRS 13
“FairVr Value Measurement”. Commission income is earned and recognised when the trade is placed, and funding charges when an open position is held by
a customer at 5:00pm New York time. Open client and hedging positions are fair valued on a daily basis and the unrealised gains and losses arising on this
valuationare recation are recognised in revenue, alongside realised gains and losses on positions that have closed.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 137
Annual Report and Financial Statements 2024
Notes to the consolidated and parent company financial statements continued
For the year ended 31 March 2024
2. Material accounting policy information continued
Total revenue continued
Revenue continued
Investing – stockbroking revenue from contracts with customers
Revenue from the provision of financial information and stockbroking services to third parties represents fee and commission income. These are accounted for in
accordance with IFRS 15 “Revenue from Contracts with Customers”. The Group recognises this revenue when the amount for the service can be determined and
the performance obligation has been satisfied, which leads to the revenue being recognised on the date of the Group provides the service to the client.
Other revenue from contracts with customers
Other revenue from the provision of financial information, dormancy fees and balance conversions are accounted for in accordance with IFRS 15 “Revenue from
Contracts with Customers”.
Interest income
Total revenue also includes interest earned on the Group’s own funds, money market funds and net broker trading deposits. Interest income is accrued based on
the eecthe effective interest rate method, by reference to the principal outstanding/free cash held and at the interest rate applicable. In addition, the Group earns interest
income on UK government securities and corporate bonds held as financial investments, calculated using the eecg the effective interest method.
Income on client funds
Income on client funds includes interest income generated from segregated client funds net of interest paid to clients on their free cash balance.
Introducing partner commissions and betting levies
Commissions payable to introducing partners and spread betting levies are charged to the income statement when the associated revenue is recognised and
are disclosed as a deduction from total revenue in deriving net operating income. Betting levy is payable on net gains generated from clients on spread betting
and the Countdowns products.
Segmental reporting
The Group’s segmental information is disclosed in a manner consistent with the internal reporting provided to the chief operating decision maker (“CODM”).
ThecThe chief operating decision maker, who is responsible for allocating resources and assessing the performance of the operating segments, has been identified
as the CMC Markets plc Board. Operating segments that do not meet the quantitative thresholds required by IFRS 8 are aggregated. The segments are subject
to annual review and the comparatives restated to reflect any reclassifications within the segmental reporting .
Share-based payment
The Group issues equity settled and cash settled share-based payments to certain employees.
Equity settled share-based payments are measured at fair value (excluding the eect of ne effect of non-market-based vesting conditions) at date of grant. The fair value
determined at the grant date of the equity settled share-based payment is expensed on a straight-line basis over the vesting period based on the Group’s
estimate of shares that will eventually vest. At each balance sheet date, the Group revises its estimate of the number of equity instruments expected to vest as a
result of the eect of nt of the effect of non-market-based vesting conditions. The impact of the revision of the original estimates, if any, is recognised in the income statement such
that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the retained earnings.
The expected life used in the model has been adjusted, based on management’s best estimate, for the eects of noffects of non-transferability, exercise restrictions and
behavioural considerations.
Cash settled share-based payments are measured at expected value at vesting date at least once per year, along with the likelihood of meeting non-
market-based vesting conditions and the number of shares that are expected to vest. The cost is recognised in the income statement with a corresponding
liability recorded.
Retirement benefit costs
A defined contribution plan is a post-employment benefit plan into which the Group pays fixed contributions to a third-party pension provider and has no legal
or constructive obligation to pay further amounts. Contributions are recognised as sta expes staff expenses in profit or loss in the years during which related employee
services are fulfilled.
The Group operates defined contribution pension schemes for its Directors and employees. The assets of the schemes are held separately from those of the
Group in independently administered funds.
Taxation
The tax expense represents the sum of tax currently payable and movements in deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit diers from piffers from profit before tax as reported in the Consolidated Income Statement
because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible.
TheGThe Group’s liability for current tax is calculated using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is accounted for using the balance sheet liability method in respect of temporary diey differences arising from dierenfferences between the carrying amount
of assets and liabilities in the financial information and the corresponding tax basis used in the computation of taxable profit. In principle, deferred tax liabilities are
recognised for all temporary dierenifferences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which
deductible temporary diey differences may be utilised. Deferred tax is calculated using tax rates and laws enacted or substantively enacted by the balance sheet date
and are expected to apply when the asset or liability is settled.
Such assets and liabilities are not recognised if the temporary dierenifference arises from the goodwill or from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction which aecch affects neither the taxable profit nor the accounting profit .
138 – CMC Markets plc
Annual Report and Financial Statements 2024
2. Material accounting policy information continued
Taxation continued
Deferred tax liabilities are recognised for taxable temporary dierencfferences arising on investments in subsidiaries, except where the Group is able to control the
reversal of the temporary dierencfference and it is probable that the temporary dierencfference will not reverse in the foreseeable future.
The carrying amounts of deferred tax assets are reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sucifficient taxable
profits will be available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are oset whre offset when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax
assets and liabilities on a net basis.
Current and deferred tax is charged or credited in the Consolidated Income Statement, except when it relates to items credited or charged directly to equity, in
which case the tax is also dealt with in equity.
Foreign currencies
Transactions denominated in currencies, other than the functional currency, are recorded at the rates of exchange prevailing on the date of the transaction. At
each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet
date. Gains and losses arising on retranslation are included in the income statement for the year, except for exchange dierenifferences arising on non-monetary assets
and liabilities where the changes in fair value are recognised directly in equity.
On consolidation, the assets and liabilities of the Group’s overseas operations are translated at exchange rates prevailing on the balance sheet date. Income
and expense items are translated at the average exchange rates applicable to the relevant year. Exchange dierencfferences arising, if any, are classified as equity and
transferred to the Group’s translation reserve.
Such translation dien differences are recognised as income or expense in the year in which the operation is disposed of.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.
Intangible assets
Goodwill
Goodwill represents the excess of the cost of acquisition over the fair value of the Group’s interest in the identifiable assets, liabilities and contingent liabilities
of a subsidiary at the date of acquisition. Goodwill arising on the acquisition of subsidiaries is included within “intangible assets” at cost less accumulated
impairment losses.
Goodwill is tested for impairment annually. Any impairment is recognised immediately in the Consolidated Income Statement and is not subsequently reversed.
On disposal of a subsidiary, the attributed amount of goodwill, which has not been subject to impairment, is included in the determination of the profit or loss
on disposal.
Goodwill is allocated to cash-generating units for purposes of impairment testing. The allocation is made to those cash-generating units or groups of cash-
generating units that are expected to benefit from the business combination, identified according to business segment .
Computer software (purchased and developed)
Purchased software is recognised as an intangible asset at cost when acquired. Costs associated with maintaining computer software are recognised
as an expense as incurred. Costs directly attributable to internally developed software are recognised as an intangible asset only if all of the following
conditions are met:
– it is technically feasible to complete the software so that it will be available for use;
– management intends to complete the software and use it;
– there is an ability to use the software;
– it can be demonstrated how the software will generate probable future economic benefits;
– adequate technical, financial and other resources to complete the development and to use the software are available; and
– the expenditure attributable to the software during its development can be reliably measured.
Where the above conditions are not met, costs are expensed as incurred. Directly attributable costs that are capitalised include contractor costs associated with
the development of software. Costs which have been recognised as an asset are amortised on a straight-line basis over the asset’s estimated useful life from the
point at which the asset is ready to use.
Trademarks and trading licences
Trademarks and trading licences that are separately acquired are capitalised at cost and those acquired from a business combination are capitalised at the fair
value at the date of acquisition. Amortisation is charged to the income statement on a straight-line basis over their estimated useful lives.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 139
Annual Report and Financial Statements 2024
Notes to the consolidated and parent company financial statements continued
For the year ended 31 March 2024
2. Material accounting policy information continued
Intangible assets continued
Client relationships
The fair value attributable to client relationships acquired through a business combination is included as an intangible asset and amortised over the estimated
useful life on a straight-line basis. The fair value of client relationships is calculated at the date of acquisition on the basis of the expected future cash flows to
be generated from that asset. Separate values are not attributed to internally generated client relationships. Following initial recognition, computer software,
trademarks and trading licences and client relationships are carried at cost or initial fair value less accumulated amortisation. Amortisation is provided on all
intangible assets at rates calculated to write o the culated to write off the cost, less estimated residual value based on prices prevailing at the balance sheet date, of each asset on a
straight-line basis over its expected useful life as follows:
Item
Amortisation policy
Computer software (purchased and developed)
3–10 years or life of licence
Trademarks and trading licences
10–20 years
Client relationships
10–14 years
Useful lives are also examined on an annual basis and adjustments, where applicable, are made on a prospective basis. Assets under development are
transferred to the relevant intangible asset class and amortised over their useful life from the point at which the asset is ready to use. Assets under development
are tested for impairment annually.
Cryptocurrency assets held as intangible assets
The Group holds cryptocurrency assets that are not held for sale in the ordinary course of business and therefore are measured in accordance with IAS 38
“Intangible Assets”. The assets are originally recognised at cost and are subsequently remeasured at cost under the cost method. These cryptocurrency assets,
subject to periodic review, are considered to have indefinite lives and as such are not subject to amortisation. The assets are tested for impairment on a periodic
basis with any impairment being recognised in the Consolidated Income Statement.
Property, plant and equipment
Property, plant and equipment (“PPE”) is stated at cost less accumulated depreciation and any recognised impairment loss. Cost includes the original purchase
price of the asset and the costs attributable to bringing the asset to its working condition for its intended use. Depreciation is provided on all PPE at rates
calculated to write o the clated to write off the cost, less estimated residual value based on prices prevailing at the balance sheet date, of each asset on a straight-line basis over its
expected useful life as follows:
Item
Depreciation policy
Furniture, fixtures and equipment
5 years
Computer hardware
5 years
Leasehold improvements
Life of lease
The useful lives and residual values of the assets are assessed annually and may be adjusted depending on a number of factors. In reassessing asset lives, factors
such as technological innovation, product lifecycles and maintenance programmes are taken into account. Residual value assessments consider issues such as
future market conditions, the remaining life of the asset and projected disposal values. Consideration is also given to the extent of current profits and losses on the
disposal of similar assets.
The gain or loss arising on the disposal or retirement of an asset is determined as the diee difference between the sales proceeds and the carrying amount of the asset
and is recognised in the Consolidated Income Statement.
Investment in subsidiary undertakings
In the Parent Company Statement of Financial Position, investment in subsidiary undertakings is stated at cost less any provision for impairment.
Investments in associates
An associate is an undertaking in which the Group has a long-term equity interest and over which it has the power to exercise significant influence. The Group’s
interest in the net assets of associates is reported in investments in the Consolidated Statement of Financial Position and its interest in their results is included in
the Consolidated Income Statement. Investments in associates are initially recorded at cost. Investments in associates are reviewed for impairment whenever
events or circumstances indicate that the carrying amount may not be recoverable. Further details are provided in note 15.
Impairment of assets
Assets subject to amortisation or depreciation are reviewed for impairment if events or changes in circumstances indicate that the carrying amount of the
assetmay not be reet may not be recoverable. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment
loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the
cash-generating unit to which the asset belongs.
The recoverable amount is the higher of fair value less cost to sell and value in use. Value in use is the estimated discounted future cash flows generated from the
asset’s continued use, including those from its ultimate disposal. Net realisable value is the estimated amount at which an asset can be disposed of, less any direct
selling costs.
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount.
Impairment losses are recognised as an expense immediately.
An assessment is made at each balance sheet date as to whether there is any indication that previously recognised impairment losses may no longer exist or
may have decreased. If such indication exists, the recoverable amount is estimated and previously recognised impairment losses are reversed only if there has
been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the carrying
amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined had no
impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised as income immediately.
140 – CMC Markets plc
Annual Report and Financial Statements 2024
2. Material accounting policy information continued
Financial instruments
Classification
The Group classifies its financial assets in the following measurement categories:
– those to be measured subsequently at fair value (either through other comprehensive income (“OCI”) or through profit or loss); and
– those to be measured at amortised cost.
Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset measured through other comprehensive income
or at amortised cost, transaction costs that are both incremental and directly attributable to the acquisition of the financial asset. Regular way transactions are
recognised on trade date.
The Group subsequently measures cash and cash equivalents, amounts due from brokers and trade and other receivables at amortised cost. The Group
subsequently measures derivative financial instruments at fair value through profit or loss, unless designated as an instrument in an eectin effective hedge accounting
relationship, and financial investments at fair value through other comprehensive income.
Derecognition of financial assets and liabilities
A financial asset or liability is generally derecognised when the contract that gives rise to it is settled, sold, cancelled or expired.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and short-term deposits. Cash and cash equivalents are short-term, highly liquid investments that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. This includes money market funds.
Amounts due from/due to brokers
Amounts due from/due to brokers represent funds placed with hedging counterparties, a proportion of which are posted to meet broker margin requirements.
All financial instruments used as hedges held for trading are margin traded. Assets or liabilities resulting from profits or losses on open positions are recognised
separately as derivative financial instruments where IAS 32 osS 32 offsetting criteria is not met.
Other assets
Other assets represent cryptocurrencies controlled by the Group. The Group oers Cp offers CFDs on cryptocurrencies as a product that can be traded on its platform.
AspaAs part of a wider hedging strategy, the Group purchases and sells cryptocurrencies to hedge the clients’ positions.
The Group holds cryptocurrency assets for trading in the ordinary course of its business, eective, effectively acting as a commodity broker-dealer in respect of the
underlying cryptocurrency asset. The assets are recognised on trade date and measured at fair value with changes in valuation being recorded in the income
statement in the period in which they arise. Cryptocurrency assets are not financial instruments and they are categorised as non-financial assets.
Trade and other receivables
Trade receivables primarily comprise amounts due from clients and stockbroking settlement balances. They are short term in nature and are recognised initially
at fair value and subsequently measured at amortised cost using the eective intereffective interest method, less an allowance for expected credit losses.
Trade receivables are short term and do not contain a significant financing element and therefore expected credit losses are measured using the simplified
approach permitted by IFRS 9, which requires expected lifetime losses to be recognised from the initial recognition of the receivables. Amounts are written off
when there is no reasonable expectation of recovery of the amount.
The expected loss model for these trade receivables has been built based on the levels of loss experienced, with due consideration given to forward-looking information.
The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in the income statement within
net impairment gains/(losses) on financial assets. When a trade receivable is uncollectable, it is written o agtten off against the allowance account for trade receivables.
Subsequent recoveries of amounts previously written o are cten off are credited against net impairment gains/(losses) in the income statement.
Financial investments
Under IFRS 9, financial assets that are debt instruments held in a business model that is achieved by both collecting contractual cash flows and selling and that
contain contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest (‘‘SPPI’’) are measured at FVOCI.
Financial investments in UK government securities and Corporate bonds are non-derivative financial assets and are recognised on a trade date basis. These
financial investments are initially measured at fair value plus directly related transactions cost. They are remeasured at fair value. Interest calculated using the
eective ieffective interest method is recognised in the income statement. All other net gains and losses are recognised directly in other comprehensive income until the
assets are sold or disposed of. On derecognition, gains and losses accumulated in OCI are reclassified to the income statement.
Financial investments in equity securities are non-derivative financial assets and are recognised on a trade date basis and are measured at FVPL.
The Group recognises a charge for expected credit losses in the income statement. As financial investments are measured at fair value, the charge does not
adjust the carrying value of the asset, and this is reflected in other comprehensive income .
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 141
Annual Report and Financial Statements 2024
Notes to the consolidated and parent company financial statements continued
For the year ended 31 March 2024
2. Material accounting policy information continued
Derivative financial instruments
Derivative financial instruments, comprising index, commodities, foreign exchange and treasury futures and forward foreign exchange contracts, are classified
as “fair value through profit or loss” under IFRS 9 unless designated as accounting hedges. Derivatives are initially recognised at fair value. Subsequent to initial
recognition, changes in fair value of derivatives that are not designated as accounting hedges, and gains or losses on their settlement, are recognised in the
income statement.
For accounting hedges, the Group documents at the inception of the transaction the relationship between hedging instruments and hedged items, as well as its risk
management objectives and strategy for undertaking various hedging transactions. The Group also documents its assessment, both at hedge inception and on an
ongoing basis, of whether the derivatives that are used in hedging transactions are highly eehly effective in octive in offsetting changes in fair values or cash flows of hedged items.
The Group categorises certain derivatives as either:
Held for trading
The Group uses derivative financial instruments in order to economically hedge derivative exposures arising from open client positions, which are classified
as held for trading. All derivatives held for trading are carried in the Consolidated Statement of Financial Position at fair value with gains or losses recognised in
revenue in the income statement.
Economic hedges (held as hedges of monetary assets and liabilities, financial commitments or forecast transactions)
These are derivatives held to mitigate the foreign exchange risk on monetary assets and liabilities, financial commitments or forecast transactions. Where a
derivative financial instrument is used as an economic hedge of the foreign exchange exposure of a recognised monetary asset or liability, financial commitment
or forecast transaction but does not meet the criteria to qualify for hedge accounting under IFRS, no hedge accounting is applied and any gain or loss resulting
from changes in fair value of the hedging instrument is recognised in operating costs in the income statement .
Trade and other payables
Trade and other payables are not interest bearing and are stated at fair value on initial recognition and subsequently at amortised cost.
Leases
Under IFRS 16, when the Group is the lessee, it is required to recognise both:
– a lease liability, measured at the present value of remaining cash flows on the lease; and
– a right-of-use (“ROU”) asset, measured at the amount of the initial measurement of the lease liability, plus any lease payments made prior to commencement
date, initial direct costs, and estimated costs of restoring the underlying asset to the condition required by the lease, less any lease incentives received.
In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in
the lease is not readily determinable.
Subsequently, the lease liability will increase for the accrual of interest, resulting in a constant rate of return throughout the life of the lease, and reduce when
the payments are made. The right-of-use asset will amortise to the income statement over the life of the lease. The lease liability is remeasured when there is a
change in one of the following:
– future lease payments arising from a change in an index or rate;
– the Group’s estimate of the amount expected to be payable under a residual value guarantee; or
– the Group’s assessment of whether it will exercise a purchase, extension or termination option.
When the lease liability is remeasured, a corresponding adjustment is made to the carrying amount of the ROU asset or is recorded in the income statement if the
carrying amount of the ROU asset has been reduced to £nil.
On the Consolidated Statement of Financial Position, the ROU assets are included within property, plant and equipment.
The Group applies the short-term lease recognition exemption to its short-term leases (i.e. those leases that have a lease term of 12 months or less from the
commencement date). Lease payments on short-term leases are recognised as an expense on a straight-line basis over the lease term.
Extension and termination options are included in a number of property leases in the Group. Management considers the facts and circumstances that may
create an economic incentive to exercise an extension or termination option in order to determine whether the lease term should include or exclude such options.
Extension or termination options are only included within the lease term if they are reasonably certain to be exercised in the case of extension options and not
exercised in the case of termination options.
The Group enters into lease agreements as a lessor with respect to some of its vehicles that it leases under head leases. When the Group is an intermediate
lessor, it accounts for the head lease and the sub-lease as two separate contracts. The sub-lease of vehicles is classified as a finance lease. Amounts due from
the lessees under finance leases are recognised as receivables at the amount of the Group’s net investment in the leases. Finance lease income is allocated to
accounting periods so as to reflect a constant periodic rate of return on the Group’s net investment outstanding in respect of the leases.
142 – CMC Markets plc
Annual Report and Financial Statements 2024
2. Material accounting policy information continued
Provisions
A provision is a liability of uncertain timing or amount that is recognised when the Group has a present obligation (legal or constructive) as a result of a past event
where it is probable that the Group will be required to settle that obligation. Provisions are measured at the Directors’ best estimate of the expenditure required to
settle the obligation at the balance sheet date and are discounted to present value where the eect ire the effect is material. The increase in the provision due to the unwind of
the discount to present value over time is recognised as an interest expense.
Share capital
Ordinary and Deferred Shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.
Own shares held in trusts
Shares held in trust by the Company for the purposes of employee share schemes are classified as a deduction from shareholders’ equity and are recognised at
cost. No gain or loss is recognised in the income statement on the purchase, sale, issue or cancellation of equity shares.
Capital redemption reserve
The capital redemption reserve was created for capital maintenance purposes as a result of the share buyback programme. When shares are repurchased out of
the Company’s profits, the amount by which the Company’s issued share capital is diminished must be transferred to the capital redemption reserve. This amount
is the nominal value of the shares bought back. See note 25.
Share buyback reserve
The share buyback reserve was created as a result of the share buyback programme and on inception of the contract amounted to the full value of the share
buyback programme plus directly attributed costs. As shares are repurchased, the share buyback reserve amount is reduced by the consideration paid for the
repurchased shares with a corresponding transaction recorded within retained earnings to reflect the consumption of distributable profits. See note 27.
Employee benefit trusts
Assets held in employee benefit trusts (“EBT”) are recognised as assets of the Group until these vest unconditionally to identified employees. A full provision is
made in respect of assets held by the trust as there is an obligation to distribute these assets to the beneficiaries of the employee benefit trust.
The employee benefit trusts own equity shares in the Company. These investments in the Company’s own shares are held at cost and are included as
a deduction from equity attributable to the Company’s equity owners until such time as the shares are cancelled or transferred. Where such shares are
subsequently transferred, any consideration received, net of any directly attributable incremental transaction costs and the related income tax eectsx effects, is included
in equity attributable to the Company’s equity owners.
Client money
The Group holds money on behalf of clients in accordance with the Client Asset (“CASS”) rules of the FCA and other financial markets regulators in the countries
in which the Group operates. Segregated client funds comprise individual client balances which are pooled in segregated client money bank accounts.
Segregated client money bank accounts hold statutory trust status restricting the Group’s ability to use the monies and accordingly such amounts and are not
recognised on the Group’s Statement of Financial Position.
3. Segmental reporting
The Group’s principal business is online trading, providing its clients with the ability to trade a variety of financial products for short-term investment and hedging
purposes. These products include contracts for dieror difference (“CFD”) and financial spread betting on a range of underlying shares, indices, foreign currencies,
commodities and treasuries. The Group also makes these services available to institutional partners through white label and introducing broker arrangements.
The Group’s CFDs are traded worldwide; spread bets only in the UK and Ireland.
In addition to this, the Group provides online stockbroking services to cater for its clients longer-term investment needs. These services are provided in Australia,
the UK and Singapore.
At the reporting date, management considered the appropriateness of the Group’s existing operating segment disclosures and the information which is
considered by the Chief Operating Decision Maker (“CODM”) in allocating resources and assessing performance. The Group’s CODM has been identified
astheBas the Board of Directors.
The Group’s business is generally managed by product line, given the dieree different economic characteristics and the dierent pifferent purposes for which they are used by
clients. As a result, the Group is organised into two segments:
– Trading; and
– Investing.
This presentation is consistent with management information regularly provided to the CODM. Revenues and segment operating expenses are allocated to the
segments that originated the transaction, and the Group uses operating profit to assess the financial performance of each segment.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 143
Annual Report and Financial Statements 2024
Notes to the consolidated and parent company financial statements continued
For the year ended 31 March 2024
3. Segmental reporting continued
Geographical splits of the Trading business in the prior period have been aggregated into one segment but are not restated.
Year ended 31 March 2024
Trading Investing Total
GROUP £’000 £’000 £’000
Revenue
279,018
45,684
324,702
Interest income on own funds
9,630
1,616
11,246
Income on client funds
14,423
9,374
23,797
Total revenue
303,071
56,674
359,745
Introducing partner commissions and betting levies
(15,233)
(11,729)
(26,962)
Net operating income
287,838
44,945
332,783
Operating costs
(200,527)
(54,367)
(254,894)
Impairment of intangible assets
(2,298)
(10,024)
(12,322)
Operating profit/(loss)
85,013
(19,446)
65,567
Share of results of associates
(283)
—
(283)
Finance costs
(1,947)
(4)
(1,951)
Profit/(loss) before taxation
82,783
(19,450)
63,333
Year ended 31 March 2023
Trading Investing Total
GROUP £’000 £’000 £’000
Revenue
255,528
55,682
311,210
Interest income on own funds
4,129
632
4,761
Income on client funds
3,262
5,904
9,166
Total revenue
262,919
62,218
325,137
Introducing partner commissions and betting levies
(18,960)
(17,754)
(36,714)
Net operating income
243,959
44,464
288,423
Operating costs
(188,164)
(45,349)
(233,513)
Impairment of intangible assets*
(432)
—
(432)
Operating profit/(loss)
55,363
(885)
54,478
Finance costs
(2,136)
(179)
(2,315)
Profit/(loss) before taxation
53,227
(1,064)
52,163
* For the year ended 31 March 2023, impairment of intangible assets has been presented separately from Operating Expenses to align with the presentation for the year ended 31 March 2024.
The measurement of net operating income for segmental analysis is consistent with that in the income statement and is broken down by geographic
location below.
Net operating income by geography
Year ended Year ended
31 March 2024 31 March 2023
£’000 £’000
UK
92,332
94,943
Australia
109,425
91,314
Other countries
131,026
102,166
332,783
288,423
The Group does not derive more than 10% of revenue from any one single client.
144 – CMC Markets plc
Annual Report and Financial Statements 2024
3. Segmental reporting continued
The measurement of segment assets for segmental analysis is consistent with that in the balance sheet. The total of non-current assets other than deferred tax
assets, broken down by location of the assets, is shown below:
Year ended Year ended
31 March 2024 31 March 2023
£’000 £’000
Total Tot al
UK
32,981
30,996
Australia
23,405
25,348
Other countries
6,368
4,469
Total non-current assets
62,754
60,813
4. Total revenue
Revenue
GROUP
Year ended Year ended
31 March 2024 31 March 2023
£’000 £’000
Trading
274,309
252,012
Investing
45,684
55,687
Other
4,709
3,511
Total
324,702
311,210
Trading revenue (previously presented as leveraged revenue) represents CFD and spread bet revenue (net of hedging costs) accounted for in accordance
with IFRS 9 “Financial Instruments’’. Investing revenue (previously presented as non-leveraged revenue) represents stockbroking revenue accounted for in
accordance with IFRS 15 “Revenue from Contracts with Customers’’.
Interest income on own funds
GROUP
Year ended Year ended
31 March 2024 31 March 2023
£’000 £’000
Bank and broker interest*
9,661
4,316
Interest on financial investments
1,556
440
Other interest income
29
5
Total
11,246
4,761
* For better presentation, Income on client funds have been presented separately for the years ended 31 March 2024 and 31 March 2023, as below.
Income on client funds
GROUP
Year ended Year ended
31 March 2024 31 March 2023
£’000 £’000
Income on client funds
23,797
9,166
Total
23,797
9,166
5. Operating expenses
GROUP
Year ended Year ended
31 March 2024 31 March 2023
£’000 £’000
Net staff costs (note 6)
118,469
101,560
IT costs
39,697
33,723
Sales and marketing
35,583
38,304
Premises
6,657
5,706
Legal and professional fees
13,937
8,605
Regulatory fees
4,294
9,436
Depreciation and amortisation
15,101
15,205
Bank charges
5,055
7,362
Irrecoverable sales tax
5,546
2,972
Other
10,568
10,810
254,907
233,683
Capitalised internal software development costs
(13)
(170)
Operating expenses
254,894
233,513
The above presentation reflects the breakdown of operating expenses by nature of expense.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 145
Annual Report and Financial Statements 2024
Notes to the consolidated and parent company financial statements continued
For the year ended 31 March 2024
6. Employee information
The aggregate employment costs of sta ansts of staff and Directors were:
GROUP
Year ended Year ended
31 March 2024 31 March 2023
£’000 £’000
Wages and salaries
108,291
92,758
Social security costs
13,950
11,850
Other pension costs
3,439
2,743
Share-based payments
2,757
2,229
Total Director and employee costs
128,437
109,580
Contract staff costs
1,703
3,101
130,140
112,681
Capitalised internal software development costs
(11,671)
(11,121)
Net staff costs
118,469
101,560
Compensation of key management personnel is disclosed in note 33.
The monthly average number of Directors and employees of the Group during the year is set out below:
GROUP
Year ended Year ended
31 March 2024 31 March 2023
Number Number
By activity:
Key management
10
9
Client acquisition and maintenance
523
489
IT development and support
348
315
Global support functions
284
254
Total Directors and employees
1,165
1,067
Contract staff
16
20
Total staff
1,181
1,087
The Company had no employees during the current year or prior year.
7. Finance costs
GROUP
Year ended Year ended
31 March 2024 31 March 2023
£’000 £’000
Interest and fees on bank borrowings
985
1,657
Interest on lease liabilities
966
658
Total
1,951
2,315
8. Profit before taxation
GROUP
Year ended Year ended
31 March 2024 31 March 2023
£’000 £’000
Profit before tax is stated after charging:
Depreciation
9,658
9,962
Amortisation and impairment of intangible assets
17,765
5,675
Net foreign exchange gain
1,134
1,044
Auditor’s remuneration for audit and other services (see below)
3,234
2,490
146 – CMC Markets plc
Annual Report and Financial Statements 2024
8. Profit before taxation continued
Fees payable to the Company’s auditor, Deloitte LLP (year ended 31 March 2023: Deloitte LLP), were as follows:
GROUP
Year ended Year ended
31 March 2024 31 March 2023
£’000 £’000
Audit services
Audit of CMC Markets plc’s Financial Statements
1,069
814
Audit of CMC Markets plc’s subsidiaries
1,340
978
Total audit fees
2,409
1,792
Non-audit services
Audit-related services
825
698
Total non-audit fees
825
698
Total fees
3,234
2,490
9. Taxation
GROUP
Year ended Year ended
31 March 2024 31 March 2023
£’000 £’000
Analysis of charge for the year
Current tax:
Current tax on profit for the year
18,839
9,873
Adjustments in respect of previous years
(991)
(991)
Total current tax
17,848
8,882
Deferred tax:
Origination and reversal of temporary differences
(1,878)
1,180
Adjustments in respect of previous years
477
200
Impact of change in tax rate
—
462
Total deferred tax
(1,401)
1,842
Total tax
16,447
10,724
The standard rate of UK corporation tax charged was 25% with eect from 1 Ath effect from 1 April 2023. Taxation outside the UK is calculated at the rates prevailing in the
respective jurisdictions. The ee. The effective tax rate for the year ended 31 March 2024 was 25.97% (year ended 31 March 2023: 20.56%) dier6%) differs from the standard rate
of corporation tax of 25% (year ended 31 March 2023: 19%). The dierencfferences are explained below:
GROUP
Year ended Year ended
31 March 2024 31 March 2023
£’000 £’000
Profit before taxation
63,333
52,163
Profit multiplied by the standard rate of corporation tax in the UK of 25% (year ended 31 March 2023: 19%)
15,833
9,911
Adjustment in respect of foreign tax rates
743
1,205
Adjustments in respect of previous years
(514)
(791)
Impact of change in tax rate
—
462
Expenses not deductible for tax purposes
319
(104)
Unrecognised tax losses
66
41
Total tax
16,447
10,724
GROUP
Year ended Year ended
31 March 2024 31 March 2023
£’000 £’000
Tax on items recognised directly in equity
Tax credit on share-based payments
(876)
—
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 147
Annual Report and Financial Statements 2024
Notes to the consolidated and parent company financial statements continued
For the year ended 31 March 2024
10. Earnings per share (“EPS”)
Basic EPS is calculated by dividing the earnings attributable to the equity owners of the Company by the weighted average number of Ordinary Shares in issue
during each year excluding those held in employee share trusts which are treated as cancelled. For diluted earnings per share, the weighted average number
of Ordinary Shares in issue, excluding those held in employee share trusts, is adjusted to assume conversion vesting of all dilutive potential weighted average
Ordinary Shares and that vesting is satisfied by the issue of new Ordinary Shares.
GROUP
Year ended Year ended
31 March 2024 31 March 2023
Earnings attributable to Ordinary Shareholders (£’000)
46,886
41,439
Weighted average number of shares used in the calculation of basic EPS (’000)
279,962
282,295
Dilutive effect of share options (’000)
—
1,598
Weighted average number of shares used in the calculation of diluted EPS (’000)
279,962
283,893
Basic EPS
16.7p
14.7p
Diluted EPS
16.7p
14.6p
For the year ended 31 March 2024, there are no (year ended 31 March 2023: 1,598,000) potentially dilutive weighted average Ordinary Shares in respect of
share awards and options in issue, included in the calculation of diluted EPS, as the Group does not expect to issue any new shares to settle these share awards
and options.
11. Dividends
GROUP AND COMPANY
Year ended Year ended
31 March 2024 31 March 2023
£’000 £’000
Declared and paid in each year
Final dividend for 2023 at 3 . 90p per share (2022: 8. 8 8p)
10,893
25,250
Interim dividend for 2024 at 1.00p per share (2023: 3.50p)
2,795
9,790
Total
13,688
35,040
The final dividend for 2024 of 7 .30 pence per share, amounting to £20,427,000, was proposed by the Board on 19 June 2024 and has not been included as a
liability at 31Mity at 31 March 2024. The dividend will be paid on 9 August 2024, following approval at the Company’s Annual General Meeting, to those members on the
register atthregister at the close of business on 12 July 2024. The dividends paid or declared in relation to the financial year are set out below:
GROUP AND COMPANY
Year ended Year ended
31 March 2024 31 March 2023
Pence Pence
Declared per share
Interim dividend
1.00
3.50
Final dividend
7.30
3.90
Total dividend
8.30
7.40
148 – CMC Markets plc
Annual Report and Financial Statements 2024
12. Intangible assets
Computer Trademarks and Client Cryptocurrency Assets under
Goodwill software trading licences relationships assets development Tot al
GROUP £’000 £’000 £’000 £’000 £’000 £’000 £’000
Cost
At 1 April 2022
11,500
132,187
1,052
3,095
—
23,608
171,442
Additions
—
291
23
—
—
11,316
11,630
Transfers
—
12,803
—
14,103
—
(26,906)
—
Foreign currency translation
—
(1,290)
(29)
(703)
—
(311)
(2,333)
At 31 March 2023
11,500
143,991
1,046
16,495
—
7,707
180,739
Additions
—
338
—
—
200
11,706
12,244
Transfers
—
9,671
—
—
—
(9,671)
—
Disposals
—
(1,730)
—
—
—
—
(1,730)
Foreign currency translation
—
(1,222)
(27)
(790)
—
(235)
(2,274)
At 31 March 2024
11,500
151,048
1,019
15,705
200
9,507
188,979
Accumulated amortisation
andimpairmenand impairment
At 1 April 2022
(11,500)
(125,612)
(907)
(3,095)
—
—
(141,114)
Charge for the year
—
(4,441)
(34)
(768)
—
—
(5,243)
Impairment
—
(432)
—
—
—
—
(432)
Foreign currency translation
—
1,181
27
184
—
—
1,392
At 31 March 2023
(11,500)
(129,304)
(914)
(3,679)
—
—
(145,397)
Charge for the year
—
(3,953)
(34)
(1,456)
—
—
(5,443)
Impairment
—
(9,161)
—
—
—
(3,161)
(12,322)
Disposals
—
1,730
—
—
—
—
1,730
Foreign currency translation
—
1,137
25
197
—
—
1,359
At 31 March 2024
(11,500)
(139,551)
(923)
(4,938)
—
(3,161)
(160,073)
Carrying amount
At 1 April 2022
—
6,575
145
—
—
23,608
30,328
At 31 March 2023
—
14,687
132
12,816
—
7,707
35,342
At 31 March 2024
—
11,497
96
10,767
200
6,346
28,906
Computer software includes capitalised development costs of £26,487,000 relating to the Group’s Next Generation trading platform which has been fully
amortised. Estimated research and development expenditure recognised as expense during the year amounted to £886,532 (31 March 2023: £893,344). Client
relationships include the transaction with ANZ to transition its portfolio of Share Investing clients to CMC for AUD$25 million, which has a remaining amortisation
period of 7.5 years.
Impairment
Intangible assets are tested for impairment if events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Assets
under development are tested annually, with additional testing being carried out when impairment triggers for an asset or CGU could adversely impact the
valuation of the asset or CGU.
The Group has recognised impairment losses totalling £12,322,000 during the 12-month period ended 31 March 2024 through the profit and loss. These
charges have been recognised through the “Impairment of intangible assets” line in the Financial Statements. Of the impairment losses, £2,298,000 relates
to assets in the Trading segment and £10,024,000 to assets in the Investing segment. No impairment losses have been recognised or reversed through other
comprehensive income.
The cash equities CGU includes assets developed in the UK that provide functionality for clients to buy and sell cash equities products. The CGU consists of
assets relating to the UK Invest platform, as well as assets developed to oer ced to offer cash equities on the Next Generation platform. Due to the shared infrastructure used
across these assets it was deemed appropriate to assess them in aggregate as one CGU. Prior to the current assessment, the CGU was tested for impairment
during the six-month period ending 30 September 2023 which resulted in a £5,275,000 impairment to be recognised.
As a result of the unfavourable equity market conditions and operational delays in development of products, management revised forecasts downwards for the
assets, triggering an impairment review.
The recoverable amount of the CGU is measured by its value in use (“VIU”). The key assumptions used in the projections relate to B2B revenue, cost of acquisition
of D2C clients and average portfolio sizes of the UK Invest business, and client trading volumes and the number of relationships onboarded in the cash equities
oerinoffering through the Next Generation platform. The most recent five-year Board-approved forecast results were used in projecting the VIU of the CGU, with a
discount rate of 9.7% (2023: 9.3%) and a long-term growth rate (beyond the forecasting period) of 0%. The resulting recoverable amount is £5,665,000. As this
isbeis below the carrying value of the CGU of £11,367,000, an impairment loss of £5,701,000 was recognised during the six-month period ended 31 March 2024. This
resulted in a charge for the financial year of £10,976,000.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 149
Annual Report and Financial Statements 2024
Notes to the consolidated and parent company financial statements continued
For the year ended 31 March 2024
12. Intangible assets continued
Impairment continued
Given the inherent uncertainty in forecasting cashflows for new business lines, there is a risk that the expected levels of income from the new initiatives are not
achieved, and as a result the recoverable amount of the CGU may reduce. A 12% reduction in projected revenues, or a 12% increase in projected costs, would
result in the full impairment of the assets.
The Opto brand is an existing content marketing channel for CMC, providing financial content to a worldwide user base via emails, articles, a podcast, magazine
and regular video interviews. The Group plans to develop this content further, and have internally developed a mobile app to access this content and enable
clients to act on this information by executing trades within the same app. This asset sits within the Group’s Investing segment.
This is the first time the asset has been subject to impairment assessment. As at 31 March 2024 the asset was not yet available for use and therefore is required
byIAS 36 pby IAS 36 paragraph 10(a) to be subject to an impairment assessment.
The recoverable amount of the asset is measured by its value in use (“VIU”). The most recent three-year Board-approved forecast results were used in
projectingthe VIg the VIU of the asset, with a discount rate of 9.7% and a long-term growth rate (beyond the forecasting period) of 0%. The resulting recoverable
amountis (£unt is (£3,282,000). As this is below nil and therefore the carrying value of the asset of £941,000, an impairment loss of the full £941,000 was recognised
during the period ended 31 March 2024.
Given the significant deficit between the recoverable amount and £nil, there is no reasonable scenario in which the asset would not be fully impaired; as a result,
no sensitivity analysis has been performed.
The Multi-Asset Platform (“MAP”) asset was in early stages of development with the aim of creating a new platform to support existing and planned product
releases as well as delivering operational ecfficiencies. The project was discontinued and therefore resulted in the full impairment of asset, amounting to an
impairment loss of £404,000. The asset sits within the Group’s Trading segment.
During the year ended 31 March 2023 the Group recorded an impairment of £432,000 relating to internally generated computer software assets. The carrying
value of the assets impaired at 1 April 2022 was £841,000, amortisation during the year ended 31 March 2023 was £409,000 until the date of decommissioning
the asset resulting in an impairment of £432,000. The impaired asset provided an enhanced functionality to the clients but this functionality was removed from
theNthe Next Generation platform.
13. Property, plant and equipment
Furniture,
Leasehold fixtures and Computer Right-of-use Construction in
improvements equipment hardware asset progress Tot al
GROUP £’000 £’000 £’000 £’000 £’000 £’000
Cost
At 1 April 2022 (Restated)
16,883
8,922
37,375
21,845
—
85,025
Additions
722
479
5,788
2,872
211
10,072
Reclassification
36
18
—
—
(54)
—
Disposals
(887)
(72)
(579)
(1,813)
—
(3,351)
Foreign currency translation
(189)
(26)
(164)
(270)
(5)
(654)
At 31 March 2023
16,565
9,321
42,420
22,634
152
91,092
Additions
3,006
647
3,779
9,587
—
17,019
Reclassification
—
89
61
—
(150)
—
Disposals
(2,769)
(117)
(514)
(1,306)
—
(4,706)
Foreign currency translation
(260)
(111)
(244)
(595)
(2)
(1,212)
At 31 March 2024
16,542
9,829
45,502
30,320
—
102,193
Accumulated depreciation
At 1 April 2022 (Restated)
(13,521)
(8,280)
(28,360)
(11,694)
—
(61,855)
Charge for the year
(1,585)
(407)
(3,749)
(4,221)
—
(9,962)
Disposals
839
59
340
1,801
—
3,039
Foreign currency translation
175
22
108
152
—
457
At 31 March 2023
(14,092)
(8,606)
(31,661)
(13,962)
—
(68,321)
Charge for the year
(1,136)
(293)
(4,163)
(4,066)
—
(9,658)
Disposals
2,549
116
256
601
—
3,522
Foreign currency translation
208
83
174
345
—
810
At 31 March 2024
(12,471)
(8,700)
(35,394)
(17,082)
—
(73,647)
Carrying amount
At 1 April 2022 (Restated)
3,362
642
9,015
10,151
—
23,170
At 31 March 2023
2,473
715
10,759
8,672
152
22,771
At 31 March 2024
4,071
1,129
10,108
13,238
—
28,546
The carrying amount of recognised right-of-use assets relates to leasehold properties.
Refer to note 23 for further details on lease liabilities.
150 – CMC Markets plc
Annual Report and Financial Statements 2024
14. Deferred tax
Deferred income taxes are calculated on all temporary dierencfferences under the liability method at the tax rate expected to apply when the deferred tax will crystallise.
The gross movement on deferred tax is as follows:
Year ended Year ended
31 March 2024 31 March 2023
GROUP £’000 £’000
At 1 April
756
2,713
Charge to income for the year
1,401
(1,380)
Charge to equity for the year
876
—
Change in tax rate
—
(462)
Foreign currency translation
(100)
(115)
At 31 March
2,933
756
The following table details the deferred tax assets and liabilities recognised by the Group and movements thereon during the year:
Accelerated Intangible
capital fixed Share based Accruals and
Tax losses allowances assets payments provisions Tot al
GROUP £’000 £’000 £’000 £’000 £’000 £’000
At 1 April 2022
93
(278)
(1,728)
273
4,353
2,713
Charge to income for the year
5
(1,590)
(625)
(52)
882
(1,380)
Change in tax rate
(7)
(192)
(182)
(16)
(65)
(462)
Foreign currency translation
4
(22)
—
—
(97)
(115)
At 31 March 2023
95
(2,082)
(2,535)
205
5,073
756
Charge to income for the year
79
(708)
451
119
1,460
1,401
Charge to equity for the year
—
—
—
876
—
876
Foreign currency translation
(3)
(2)
(106)
—
11
(100)
At 31 March 2024
171
(2,792)
(2,190)
1,200
6,544
2,933
The recognition of deferred tax assets is based upon whether it is more likely than not that sucfficient and suitable taxable profits will be available in the future
against which the reversal of the temporary dierenifferences can be deducted. The recoverability of the Group’s deferred tax asset in respect of carry forward losses is
based on an assessment of the future levels of taxable profit expected to arise that can be ose offset against these losses. The Group’s expectations as to the level of
future taxable profits take into account the Group’s long-term financial and strategic plans and anticipated future tax adjusting items. In making this assessment,
account is taken of business plans including the Board-approved Group budget. Key budget assumptions are discussed in the Directors’ viability statement.
Deferred tax assets are recognised for tax losses carried forward to the extent that the realisation of the related tax benefit through future taxable profits is probable.
As at 31 March 2024, the Group did not recognise deferred tax assets of £272,000 (year ended 31 March 2023: £298,000) in respect of losses amounting to
£1,416,000 (year ended 31 March 2023: £1,540,000). £66,000 (year ended 31 March 2023: £520,000) of the losses relates to the Group’s Information Internet
Limited subsidiary and £1,416,000 (year ended 31 March 2023: £1,020,000) of the losses relates to CMC Markets Singapore Invest Pte Ltd subsidiary. There is no
time limit on their utilisation.
The Group has recognised a deferred tax asset of £171,000 (year ended 31 March 2023: £95,000) in respect of losses of £813,000 (year ended 31 March 2023:
£428,000). £548,000 (year ended 31 March 2023: £321,000) of the losses relates to the Group’s Information Internet Limited subsidiary, £265,000 (year ended
31 March 2023: £0) of losses relates to CMC Markets Singapore Invest Pte Ltd and £0 (year ended 31 March 2023: £107,000) of the losses relates to the Polish
branch of the Group’s CMC Markets Germany GmbH subsidiary as at 31 March 2024.
Deferred tax balances are reported at the substantively enacted corporation tax rate of 25%, the substantively enacted tax rate at the balance sheet date.
15. Investment in associates and subsidiary undertakings
Investments in associates
On 6 June 2023, the Group acquired a 33% stake in Strike X Technologies (“Strike X”), a customer centric blockchain solutions business for a cost of £2,800,000.
CMC Markets Ventures Ltd holds 3,330,000 A ordinary shares of £0.0001 each in StrikeX, representing 100% of the nominal value of the shares of that class.
This investment presents the Group with further opportunity for growth. The partnership will allow the Group access to the latest blockchain related products and
services with the opportunity to leverage these for our customers over the longer term.
The Group’s share of loss in Strike X for the year ended 31 March 2024 was £283,000. The investment was adjusted accordingly to £2,517,000 as at 31 March 2024.
Such investments are reviewed for impairment whenever events or circumstances indicate that the carrying amount may not be recoverable. There was no
indication of impairment for the year ended 31 March 2024.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 151
Annual Report and Financial Statements 2024
Notes to the consolidated and parent company financial statements continued
For the year ended 31 March 2024
15. Investment in associates and subsidiary undertakings continued
Investments in subsidiary undertakings
Year ended Year ended
31 March 2024 31 March 2023
COMPANY £’000 £’000
At 1 April (Restated)
167,090
167,722
Capital contribution relating to share-based payments
2,364
2,121
Amounts contributed by subsidiaries in relation to share-based payments
(1,006)
(2,753)
At 31 March
168,448
167,090
The Company’s investments in its subsidiary undertakings are carried at cost less accumulated provision for impairment. In determining the provision for
impairment, the carrying value of the investment is compared to the recoverable amount of the investment. The estimated recoverable amount of these
investments is determined based on an estimate of the fair value less costs to sell of the subsidiary undertaking or the value in use of the subsidiary undertaking,
whichever is higher. Investments in subsidiary undertakings are tested for impairment annually. Total provision for impairment recorded during the year ended
31Ma31 March 2024 was £nil (year ended 31 March 2023: £nil).
The list below includes all of the Group’s direct and indirect subsidiaries as at 31 March 2024:
Country of
incorporation
Principal activities
Held
CMC Markets Holdings Ltd
England
Holding company
Directly
CMC Markets UK Holdings Ltd
England
Holding company
Indirectly
CMC Markets Investments Limited
England
Online investing
Indirectly
CMC Markets Investments Nominee Limited
England
Nominee entity
Indirectly
CMC Markets UK plc
England
Online trading
Indirectly
Information Internet Ltd
England
IT development
Indirectly
CMC Spreadbet plc
England
Financial spread betting
Indirectly
CMC Markets Overseas Holdings Ltd
England
Holding company
Indirectly
CMC Markets CFD Overseas Holdings Limited
England
Dormant
Indirectly
CMC Markets Holdings Ventures Limited
England
Holding company
Indirectly
CMC Markets Ventures Limited
England
Holding company
Indirectly
Opto Markets Limited
England
Holding company
Indirectly
CMC Markets Asia Pacific Pty Ltd
Australia
Online trading
Indirectly
CMC Markets Group Australia Pty Ltd
Australia
Holding company
Indirectly
CMC Markets Stockbroking Ltd
Australia
Stockbroking
Indirectly
CMC Markets Stockbroking Services Pty Lt
Australia
Employee services
Indirectly
CMC Markets Stockbroking Nominees Pty Ltd
Australia
Nominee entity
Indirectly
CMC Markets Stockbroking Nominees (No. 2 Account) Pty Ltd
Australia
Nominee entity
Indirectly
CMC Markets Canada Inc
Canada
Online trading
Indirectly
CMC Markets NZ Ltd
New Zealand
Online trading
Indirectly
CMC Markets Singapore Pte Ltd
Singapore
Online trading
Indirectly
CMC Markets Singapore Invest Pte Ltd
Singapore
Online investing
Indirectly
CMC Business Services (Shanghai) Limited
China
Training and education
Indirectly
CMC Markets Germany GmbH
Germany
Online trading
Indirectly
CMC Markets Middle East Ltd
UAE
Online trading
Indirectly
CMC Markets Bermuda Holdings Ltd
Bermuda
Holding company
Indirectly
CMC Markets Bermuda Ltd
Bermuda
Online trading
Indirectly
Opto Markets LLC
USA
Online trading
Indirectly
Please refer to pages 178 and 179 for the registered oistered office addresses of the subsidiaries above.
All shareholdings are of Ordinary Shares. The issued share capital of all subsidiary undertakings is 100% owned, which also represents the proportion of
the voting rights in the subsidiary undertakings. The Group has taken advantage of the s394A exemption from preparing individual accounts of its dormant
subsidiary CMC Markets CFD Overseas Holdings Limited (Company registration number: 14940138)
The list below includes all of the Group’s employee benefit trusts as at 31 March 2024:
Country of
incorporation
CMC Markets plc Employee Share Trust
Jersey
CMC Markets plc UK Share Incentive Plan
England
CMC Markets plc (Discretionary Schemes) Employee Share Trust
England
152 – CMC Markets plc
Annual Report and Financial Statements 2024
16. Trade and other receivables
GROUP
COMPANY
31 March 2024 31 March 2023 31 March 2024 31 March 2023
£’000 £’000 £’000 £’000
Current
Gross trade receivables
9,936
8,721
—
—
Less: loss allowance
(3,964)
(4,247)
—
—
Trade receivables
5,972
4,474
—
—
Amounts due from Group companies
—
—
—
1,879
Prepayments
13,552
14,985
52
51
Accrued income
3,778
2,335
—
2
Stockbroking debtors
126,339
105,103
—
—
Other debtors and advances
12,415
3,719
5,495
—
162,056
130,616
5,547
1,932
Non-current
Other debtors
2,753
2,666
—
—
Total
164,809
133,282
5,547
1,932
Stockbroking debtors represent the amount receivable in respect of equity security transactions executed on behalf of clients with a corresponding balance
included within trade and other payables (note 21).
All amounts due from Group companies in the Company Financial Statements are repayable on demand and are non-interest bearing.
At 31 March 2024 the Group has lease receivables amounting to £548,000 (31 March 2023: £384,000). The Group is an intermediate lessor on these leases
andhand has recognised finance income of £29,000 during the year ended 31 March 2024 (year ended 31 March 2023: £5,000).
17. Derivative financial instruments
Assets
GROUP
31 March 2024 31 March 2024 31 March 2023 31 March 2023
Notional Carrying Notional Carrying
amount amount amount amount
£m £’000 £m £’000
Held for trading
Client trading positions
394.0
31,627
120.9
13,125
Held for hedging
Forward foreign exchange contracts – economic hedges
—
—
73.6
1,106
Total
394.0
31,627
194.5
14,231
Liabilities
GROUP
31 March 2024 31 March 2024 31 March 2023 31 March 2023
Notional Carrying Notional Carrying
amount amount amount amount
£m £’000 £m £’000
Held for trading
Client trading positions
181.4
(7,074)
35.7
(2,033)
Held for hedging
Forward foreign exchange contracts – economic hedges
—
—
—
—
Total
181.4
(7,074)
35.7
(2,033)
The fair value of derivative contracts is based on the market price of comparable instruments at the balance sheet date. All derivative financial instruments have a
maturity date of less than one year.
Held for trading
Derivative financial instruments relating to client trading positions refer to the fair value of open positions held by clients at the end of the year.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 153
Annual Report and Financial Statements 2024
Notes to the consolidated and parent company financial statements continued
For the year ended 31 March 2024
17. Derivative financial instruments continued
Held for hedging
The Group’s forward foreign exchange contracts are categorised as economic hedges.
Economic hedges are held for the purpose of mitigating currency risk relating to transactional currency flows arising from earnings in foreign currencies but
do not meet the criteria for designation in a hedge accounting relationship. During the year ended 31 March 2024, £1,033,000 of net loss relating to economic
hedges was recognised in the Consolidated Income Statement (year ended 31 March 2023: loss of £845,000).
The maximum exposure to credit risk at the reporting date is the carrying value of the derivative assets at the balance sheet date.
The Group’s derivative positions are reported gross on the Consolidated Statement of Financial Position, as required by IAS 32 where the criteria for oiteria for offset are not met.
18. Other assets
GROUP
31 March 2024 31 March 2023
£’000 £’000
Exchange
10,382
1,178
Vaults
1,876
806
Total
12,258
1,984
Other assets are cryptocurrencies, which are owned and controlled by the Group for the purpose of hedging the Group’s exposure to clients’ cryptocurrency
trading positions. The fair value of cryptocurrencies is based on the market price of these instruments as at the balance sheet date.
As presented above, the Group holds cryptocurrencies on exchange and in vault. Cryptocurrencies held on vaults are held in a wallet that has additional security
features. Other assets are measured at fair value less costs to sell.
19. Financial investments
GROUP
Year ended Year ended
31 March 2024 31 March 2023
£’000 £’000
Investment in debt instruments classified at FVOCI
UK government securities
16,162
30,572
Corporate bonds
34,349
—
Financial assets mandatorily measured at FVPL
Equity securities
410
34
Total
50,921
30,606
The eective intereffective interest rates of UK government securities held at the year-end range from 2.43% to 2.61% (31 March 2023: -1.72% to 4.05%). The ee. The effective interest
rates of Corporate bonds held at the year-end range from 0.76% to 5.37%.
GROUP
31 March 2024 31 March 2023
£’000 £’000
Analysis of financial investments
Non-current
32
34
Current
50,889
30,572
Total
50,921
30,606
Financial investments are shown as current assets when they have a maturity of less than one year and as non-current when they have a maturity of more than
one year. The majority of these UK government securities are held to meet the Group’s regulatory threshold requirements under IFPR. These UK government
securities are in Stage 1 and ECL is immaterial for the year ended 31 March 2024 (year ended 31 March 2023: £nil).
154 – CMC Markets plc
Annual Report and Financial Statements 2024
20. Cash and cash equivalents
GROUP
COMPANY
31 March 2024 31 March 2023 31 March 2024 31 March 2023
£’000 £’000 £’000 £’000
Cash and cash equivalents
160,300
146,218
93
586
Analysed as:
Cash at bank
160,300
146,218
93
586
Cash and cash equivalents comprise cash on hand and short-term deposits. Cash equivalents are short-term, highly liquid investments that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. This includes money market funds. While cash and cash
equivalents are also subject to the impairment requirements of IFRS 9, the ECL is immaterial for the year ended 31 March 2024 (year ended 31 March 2023: £nil).
Analysis of net cash
GROUP
31 March 2024 31 March 2023
£’000 £’000
Cash and cash equivalents
160,300
146,218
Borrowings
—
—
Share buyback liability
—
—
Lease liabilities
(16,915)
(11,818)
Net cash
143,385
134,400
GROUP
Changes in
Lease Share buyback liabilities arising Cash and cash
Borrowings liabilities liability from financing equivalents Total
£’000 £’000 £’000 £’000 £’000 £’000
At 1 April 2022 (Restated)
(194)
(14,251)
(27, 264)
(41,709)
176,578
134,869
Cash flows
—
—
—
—
(29,058)
(29,058)
Financing cash flows
194
5,454
27, 26 4
32,912
—
32,912
Inception/modification of leases
—
(3,223)
—
(3,223)
—
(3,223)
Foreign exchange adjustments
—
202
—
202
(1,302)
(1,100)
At 31 March 2023
—
(11,818)
—
(11,818)
146,218
134,400
Cash flows
—
—
—
—
17,506
17,506
Financing cash flows
—
5,531
—
5,531
—
5,531
Inception/modification of leases
—
(10,960)
—
(10,960)
—
(10,960)
Foreign exchange adjustments
—
332
—
332
(3,424)
(3,092)
At 31 March 2024
—
(16,915)
—
(16,915)
160,300
143,385
21. Trade and other payables
GROUP
COMPANY
31 March 2024 31 March 2023 31 March 2024 31 March 2023
£’000 £’000 £’000 £’000
Client payables
119,591
49,409
—
—
Tax and social security
759
1,272
—
—
Stockbroking creditors
116,029
98,428
—
—
Amount due to Group companies
—
—
4,426
—
Accruals and other creditors
36,432
33,175
217
122
Total
272,811
182,284
4,643
122
Stockbroking creditors represent the amount payable in respect of equity and securities transactions executed on behalf of clients with a corresponding balance
included within trade and other receivables (note 16).
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 155
Annual Report and Financial Statements 2024
Notes to the consolidated and parent company financial statements continued
For the year ended 31 March 2024
22. Borrowings
Bank loans
In March 2024, the syndicated revolving credit facility was renewed at a level of £55,000,000 (31 March 2023: £55,000,000) where £27,500,000 had a maturity
date of March 2025 and £27,500,000 had a maturity date of March 2027. This facility can only be used to meet broker margin requirements of the Group. The rate
of interest payable on any loans is the aggregate of the applicable margin and SONIA. Other fees such as commitment fees, legal fees and arrangement fees are
also payable on this facility (note 7).
No amount was outstanding on this facility at 31 March 2024 (31 March 2023: £nil).
All amounts due to Group companies in the Company Financial Statements are repayable on demand and are non-interest bearing.
23. Leases liabilities
The Group leases several assets including leasehold properties and computer hardware to meet its operational business requirements. The average lease term
is 2.8 years.
ROU asset balances relate to both leasehold properties and computer hardware. Refer to note 13 for a breakdown of the carrying amount of ROU assets.
The movements in lease liabilities during the year were as follows:
GROUP
Year ended Year ended
31 March 2024 31 March 2023
£’000 £’000
At 1 April
11,818
14,251
Additions/modifications of new leases during the year
10,960
3,223
Interest expense
966
658
Lease payments made during the year
(6,497)
(6,112)
Foreign currency translation
(332)
(202)
At 31 March
16,915
11,818
GROUP
31 March 2024 31 March 2023
£’000 £’000
Analysis of lease liabilities
Non-current
12,000
6,228
Current
4,915
5,590
Total
16,915
11,818
The lease payments for the year ended 31 March 2024 relating to short-term leases amounted to £732,000 (year ended 31 March 2023: £402,000).
As at 31 March 2024 the potential future undiscounted cash outflows that have not been included in the lease liability due to lack of reasonable certainty the lease
extension options might be exercised amounted to £nil (31 March 2023: £nil).
Refer to note 29 for maturity analysis of lease liabilities.
24. Provisions
GROUP
Restructuring Property
costs related Other Tot al
£’000 £’000 £’000 £’000
At 1 April 2022
—
2,416
70
2,486
Additional provision
—
82
856
938
Utilisation of provision
—
(143)
(370)
(513)
Currency translation
—
(9)
—
(9)
At 31 March 2023
—
2,346
556
2,902
Additional provision
2,186
16
1,646
3,848
Utilisation of provision
—
—
(407)
(407)
Unutilised provisions reversed
—
(1,955)
(157)
(2,112)
Currency translation
—
(21)
(16)
(37)
At 31 March 2024
2,186
386
1,622
4,194
The restructuring provision is for costs relating to redundancies announced within the year ended 31 March 2024.
The property-related provisions include dilapidation provisions. Dilapidation provisions have been capitalised as part of cost of ROU assets and are amortised
over the term of the lease. These dilapidation provisions are utilised as and when the Group vacates a property and expenditure is incurred to restore the property
to its original condition.
156 – CMC Markets plc
Annual Report and Financial Statements 2024
24. Provisions continued
The other provisions balance as at 31 March 2024 and 31 March 2023 relates to provisions made for potential litigation associated with client complaints.
GROUP
31 March 2024 31 March 2023
£’000 £’000
Analysis of total provisions
Current
3,937
815
Non-current
257
2,087
Total
4,194
2,902
25. Share capital, share premium and capital redemption reserve
Number
£’000
GROUP AND COMPANY
31 March 2024
31 March 2023
31 March 2024
31 March 2023
Authorised
Ordinary Shares of 25p
400,000,000
400,000,000
100,000
100,000
Allotted, issued and fully paid
Ordinary Shares of 25p
279,815,463
279,815,463
69,953
69,953
Deferred Shares of 25p
2,478,086
2,478,086
620
620
Total
282,293,549
282,293,549
70,573
70,573
Share class rights
The Company has two classes of shares, Ordinary and Deferred, neither of which carries a right to fixed income. Deferred Shares have no voting or dividend
rights. Inthe event of a win the event of a winding-up, Ordinary Shares shall be repaid at nominal value plus £500,000 each in priority to Deferred Shares.
GROUP AND COMPANY
Ordinary Shares Deferred Shares Tot al
Number Number Number
At 1 April 2022
290,293,919
2,478,086
292,772,005
New shares issued
—
—
—
Shares cancelled
(10,478,456)
—
(10,478,456)
At 31 March 2023
279,815,463
2,478,086
282,293,549
New shares issued
—
—
—
Shares cancelled
—
—
—
At 31 March 2024
279,815,463
2,478,086
282,293,549
GROUP AND COMPANY
Capital
redemption
Ordinary Shares Deferred Shares Share premium reserve Tot al
£’000 £’000 £’000 £’000 £’000
At 1 April 2022
72,573
620
46,236
281
119,710
New shares issued
—
—
—
—
—
Shares cancelled
(2,620)
—
—
2,620
—
At 31 March 2023
69,953
620
46,236
2,901
119,710
New shares issued
—
—
—
—
—
Shares cancelled
—
—
—
—
—
At 31 March 2024
69,953
620
46,236
2,901
119,710
Movements in share capital and premium
During the year ended 31 March 2024, no (year ended 31 March 2023: nil) shares with nominal value of 25 pence were issued to employee benefit trusts (“EBTs”).
During the year ended 31 March 2024, no shares (year ended 31 March 2023: 10,478,456) with nominal value of 25 pence were cancelled pursuant to the share
buyback programme.
During the year ended 31 March 2024, no Ordinary Shares were converted to Deferred Shares in accordance with the terms of grant to employees who have now
left the Group (year ended 31 March 2023: nil).
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 157
Annual Report and Financial Statements 2024
Notes to the consolidated and parent company financial statements continued
For the year ended 31 March 2024
25. Share capital, share premium and capital redemption reserve continued
Capital redemption reserve
On 14 March 2022, the Board approved a share buyback programme with up to £30.0 million to be returned to shareholders.
During the period starting 17 March 2022 and up to 19 October 2022, the Company repurchased and cancelled 11,602,010 Ordinary Shares with nominal value of
25pe25 pence. The amount by which the Company’s share capital is diminished on the cancellation of the purchased shares is transferred to the capital redemption
reserve. This amounted to £2,619,614 for the year ended 31 March 2023. No shares were repurchased and cancelled during the year ended 31 March 2024.
26. Own shares held in trust
GROUP AND COMPANY Number
£’000
Ordinary Shares of 25p
At 1 April 2022
653,615
1,094
Acquisition
460,840
1,106
Utilisation
(408,688)
(691)
At 31 March 2023
705,767
1,509
Acquisition
1,046,565
1,788
Utilisation
(328,336)
(708)
At 31 March 2024
1,423,996
2,589
At the AGM held on 27 July 2023, the shareholders authorised the Company to purchase its own shares up to a maximum number of 27,981,546. The authority is
due to expire at the end of the next annual general meeting of the Company or at the close of business on 26 September 2024, whichever is the earlier.er.
The shares are held by various EBTs for the purpose of encouraging or facilitating the holding of shares in the Company for the benefit of employees and the
trustees will apply the whole or part of the trust’s funds to facilitate dealing in shares by such beneficiaries. The maximum number of own shares held at any time
by the Group was 1,423,996 (year ended 31 March 2023:705,767). At 31 March 2024, Ordinary Shares held in trust represent 0.51% (At 31 March 2023:0.25%) of
the called up share capital of the Company.
27. Other reserves
GROUP
Share
Translation Net investment FVOCI Merger buyback
reserve hedging reserve reserve reserve reserve Tot al
£’000 £’000 £’000 £’000 £’000 £’000
At 1 April 2022
7,827
(8,662)
(81)
(47,800)
(27,264)
(75,980)
Currency translation differences
(1,760)
—
—
—
—
(1,760)
Share buyback
—
—
—
—
27, 264
27, 264
Gains recycled from equity to income statement
237
—
—
—
—
237
Losses on net investment hedges
—
(86)
—
—
—
(86)
Losses on financial investments at FVOCI
—
—
(210)
—
—
(210)
At 31 March 2023
6,304
(8,748)
(291)
(47,800)
—
(50,535)
Currency translation differences
(5,285)
—
—
—
—
(5,285)
Share buyback
—
—
—
—
—
—
Gains recycled from equity to income statement
237
—
—
—
—
237
Losses on net investment hedges
—
—
—
—
—
—
Losses on financial investments at FVOCI
—
—
144
—
—
144
At 31 March 2024
1,256
(8,748)
(147)
(47,800)
—
(55,439)
Translation reserve
The translation reserve is comprised of translation dien differences on foreign currency net investments held by the Group.
Net investment hedging reserve
The net investment hedge programme closed at the end of April 2022. Overseas net investments are hedged using forward foreign exchange contracts. Gains
and losses on instruments used to hedge these overseas net investments are shown in the net investment hedging reserve. These instruments hedge balance
sheet translation risk, which is the risk of changes in reserves due to fluctuations in currency exchange rates. All changes in the fair value of these hedging
instruments were treated as being eectig effective under IFRS 9 “Financial Instruments”.
FVOCI reserve
The Group holds certain UK government securities measured at FVOCI. Unrealised gains and losses arising from changes in the fair value of these financial
assets are recognised in the FVOCI reserve.
Merger reserve
The merger reserve arose following a corporate restructure in 2006 when a new holding company, CMC Markets plc, was created to bring all CMC companies
into the same corporate structure. The merger reserve represents the dierenifference between the nominal value of the holding company’s share capital and that of
the acquired companies.
158 – CMC Markets plc
Annual Report and Financial Statements 2024
27. Other reserves continued
Share buyback reserve
On 14 March 2022, the Board approved a share buyback programme with up to £30.0 million to be returned to shareholders. On inception of the contract,
a financial liability of £30,239,000 was established representing the financial liability for the full value of the share buyback programme plus directly
attributable costs.
The share buyback reserve amount is reduced by the consideration paid for the repurchased shares with a corresponding transaction recorded within retained
earnings to reflect the consumption of distributable profits. The share buyback reserve is presented in both the Consolidated and Parent Company Statements of
Changes in Equity. No shares were purchased during the year ended 31 March 2024.
The shares purchased and the average price paid per share for the year ended 31 March 2023 were as follows:
Year ended 31 March
Number of shares purchased
Aggregate purchase amount
Average price of shares purchased
2023
10,478,456
£27,236,000
£2.60
28. Cash generated from/(used in) operations
GROUP
COMPANY
Year ended Year ended Year ended Year ended
31 March 2024 31 March 2023 31 March 2024 31 March 2023
£’000 £’000 £’000 £’000
Cash flows from operating activities
Profit before taxation
63,333
52,163
13,072
33,763
Adjustments for:
Interest income
(11,246)
(4,761)
(14)
—
Income on client funds
(23,797)
(9,166)
—
—
Dividends received
—
—
(13,698)
(34,260)
Finance costs
1,951
2,315
42
318
Depreciation
9,658
9,962
—
—
Amortisation and impairment of intangible assets
17,765
5,675
—
—
Research and development tax credit
(497)
(651)
—
—
Share of results of associate
283
—
—
—
Loss/(profit) on disposal of property, plant and equipment
479
(27)
—
—
Other non-cash movements including exchange rate movements
(187)
980
—
—
Share-based payment
2,092
1,651
—
—
Changes in working capital
(Increase)/decrease in trade and other receivables
(31,181)
17,222
(2,891)
840
(Increase)/decrease in amounts due from/due to brokers
(42,673)
17,261
—
—
(Increase)/decrease in other assets
(10, 274)
11,459
—
—
Increase/(decrease) in trade and other payables
90,520
(20,792)
4,521
(54)
Increase in net derivative financial instrument liabilities
(12,355)
(7,167)
—
—
Increase in provisions
3,268
460
—
—
Cash generated from operations
57,139
76,584
1,032
607
1
1 This change in working capital for the year ended 31 March 2023 is stated after oed after offsetting a payment amounting to £9,500,000 made to Australia and New Zealand Banking Group Limited in relation to the portfolio of
share investing clients acquired during the year ended 31 March 2022.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 159
Annual Report and Financial Statements 2024
Notes to the consolidated and parent company financial statements continued
For the year ended 31 March 2024
29. Financial instruments
Analysis of financial instruments by category
The following tables analyse financial assets and liabilities in accordance with the categories of financial instruments on an IFRS 9 basis.
31 March 2024
Assets Assets Assets at
at FVOCI at FVPL amortised cost Total
GROUP £’000 £’000 £’000 £’000
Financial assets
Cash and cash equivalents
—
—
160,300
160,300
Financial investments
50,511
410
—
50,921
Amounts due from brokers
—
—
228,882
228,882
Derivative financial instruments
—
31,627
—
31,627
Trade and other receivables excluding non-financial assets
—
—
150,709
150,709
50,511
32,037
539,891
622,439
31 March 2024
Liabilities Liabilities Liabilities at
at FVOCI at FVPL amortised cost Total
GROUP £’000 £’000 £’000 £’000
Financial liabilities
Trade and other payables excluding non-financial liabilities
—
—
(272,052)
(272,052)
Amounts due to brokers
—
—
(6,982)
(6,982)
Derivative financial instruments
—
(7,074)
—
(7,074)
Lease liabilities
—
—
(16,915)
(16,915)
—
(7,074)
(295,949)
(303,023)
31 March 2023
Assets Assets Assets at
at FVOCI at FVPL amortised cost Tot al
GROUP £’000 £’000 £’000 £’000
Financial assets
Cash and cash equivalents
—
—
146,218
146,218
Financial investments
30,572
34
—
30,606
Amounts due from brokers
—
—
188,154
188,154
Derivative financial instruments
—
14,231
—
14,231
Trade and other receivables excluding non-financial assets
—
—
117, 905
117,905
30,572
14,265
452,277
497,114
31 March 2023
Liabilities Liabilities Liabilities at
at FVOCI at FVPL amortised cost Tot al
GROUP £’000 £’000 £’000 £’000
Financial liabilities
Trade and other payables excluding non-financial liabilities
—
—
(181,012)
(181,012)
Amounts due to brokers
—
—
(8,927)
(8,927)
Derivative financial instruments
—
(2,033)
—
(2,033)
Lease liabilities
—
—
(11,818)
(11,818)
—
(2,033)
(201,757)
(203,790)
160 – CMC Markets plc
Annual Report and Financial Statements 2024
29. Financial instruments continued
Analysis of financial instruments by category continued
The maximum exposure to credit risk at the reporting date is the fair value of the financial assets at the balance sheet date.
31 March 2024
Assets Assets Assets at
at FVOCI at FVPL amortised cost Total
COMPANY £’000 £’000 £’000 £’000
Financial assets
Cash and cash equivalents
—
—
93
93
Trade and other receivables excluding non-financial assets
—
—
5,495
5,495
—
—
5,588
5,588
31 March 2024
Liabilities Liabilities Liabilities at
at FVOCI at FVPL amortised cost Total
COMPANY £’000 £’000 £’000 £’000
Financial liabilities
Trade and other payables excluding non-financial liabilities
—
—
(4,643)
(4,643)
—
—
(4,643)
(4,643)
31 March 2023
Assets Assets Assets at
at FVOCI at FVPL amortised cost Tot al
COMPANY £’000 £’000 £’000 £’000
Financial assets
Cash and cash equivalents
—
—
586
586
Trade and other receivables excluding non-financial assets
—
—
1,879
1,879
—
—
2,465
2,465
31 March 2023
Liabilities Liabilities Liabilities at
at FVOCI at FVPL amortised cost Tot al
COMPANY £’000 £’000 £’000 £’000
Financial liabilities
Trade and other payables excluding non-financial liabilities
—
—
(122)
(122)
—
—
(122)
(122)
Maturity analysis
31 March 2024
Less than Three months After
On demand three months to one year one year Total
GROUP £’000 £’000 £’000 £’000 £’000
Financial assets
Cash and cash equivalents
160,300
—
—
—
160,300
Financial investments
410
18,633
32,966
—
52,009
Amounts due from brokers
228,882
—
—
—
228,882
Derivative financial instruments
31,627
—
—
—
31,627
Trade and other receivables excluding non-financial assets
140,785
2,466
456
1,508
145,214
562,004
21,099
33,422
1,508
618,032
Financial liabilities
Trade and other payables excluding non-financial liabilities
(272,052)
—
—
—
(272,052)
Amounts due to brokers
(6,982)
—
—
—
(6,982)
Derivative financial instruments
(7,074)
—
—
—
(7,074)
Lease liabilities
—
(1,612)
(4,162)
(14,776)
(20,550)
(286,108)
(1,612)
(4,162)
(14,776)
(306,658)
Net liquidity gap
275,896
19,487
29,260
(13,268)
311,374
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 161
Annual Report and Financial Statements 2024
Notes to the consolidated and parent company financial statements continued
For the year ended 31 March 2024
29. Financial instruments continued
Maturity analysis continued
31 March 2023
Less than Three months After
On demand three months to one year one year Tot al
GROUP £’000 £’000 £’000 £’000 £’000
Financial assets
Cash and cash equivalents
146,218
—
—
—
146,218
Financial investments
34
—
15,330
16,007
31,371
Amounts due from brokers
188,154
—
—
—
188,154
Derivative financial instruments
13,125
1,106
—
—
14,231
Trade and other receivables excluding non-financial assets
113,283
2,465
495
1,662
117, 905
460,814
3,571
15,825
17,669
497,879
Financial liabilities
Trade and other payables excluding non-financial liabilities
(181,012)
—
—
—
(181,012)
Amounts due to brokers
(8,927)
—
—
—
(8,927)
Derivative financial instruments
(2,033)
—
—
—
(2,033)
Lease liabilities
—
(1,525)
(4,412)
(8,041)
(13,978)
(191,972)
(1,525)
(4,412)
(8,041)
(205,950)
Net liquidity gap
268,842
2,046
11,413
9,628
291,929
The amounts disclosed in the table are the contractual undiscounted cash flows, including principal and interest payments; these amounts will not reconcile to the
amounts disclosed in the Consolidated Statement of Financial Position.
Given that 91% of the Group’s financial assets are available on demand, there is no significant maturity risk as at 31 March 2024 (31 March 2023: 93%).
31 March 2024
Less than Three months After
On demand three months to one year one year Total
COMPANY £’000 £’000 £’000 £’000 £’000
Financial assets
Cash and cash equivalents
93
—
—
—
93
93
—
—
—
93
Financial liabilities
Trade and other payables excluding non-financial liabilities
(4,643)
—
—
—
(4,643)
(4,643)
—
—
—
(4,643)
Net liquidity gap
(4,550)
—
—
—
(4,550)
31 March 2023
Less than Three months After
On demand three months to one year one year Tot al
COMPANY £’000 £’000 £’000 £’000 £’000
Financial assets
Cash and cash equivalents
586
—
—
—
586
Trade and other receivables excluding non-financial assets
1,879
—
—
—
1,879
2,465
—
—
—
2,465
Financial liabilities
Trade and other payables excluding non-financial liabilities
(122)
—
—
—
(122)
(122)
—
—
—
(122)
Net liquidity gap
2,343
—
—
—
2,343
162 – CMC Markets plc
Annual Report and Financial Statements 2024
29. Financial instruments continued
OsettiOffsetting financial instruments
The Group enters into various collateral arrangements with its counterparties. These agreements provide the Group with the right, in the ordinary course of
business and/or in the event of a counterparty default (such as bankruptcy or a counterparty’s failure to pay or perform), to net a counterparty’s rights and
obligations under such agreement and, in the event of counterparty default, set o coet off collateral held by the Group against the net amount owed by the counterparty.
The following financial assets and liabilities have been oset anffset and are subject to enforceable netting agreements:
Note
31 March 2024
Gross amounts
Gross amounts of recognised Net amounts
of recognised financial subject to
financial instruments offsetting
instruments offset arrangements
GROUP £’000 £’000 £’000
Financial assets
Trade and other receivables
16
1,400
(337)
1,063
Amounts due from brokers
261,335
(32,453)
228,882
262,735
(32,790)
229,945
Financial liabilities
Trade and other payables
21
(303,296)
183,705
(119,591)
Amounts due to brokers
(7,986)
1,004
(6,982)
(311,282)
184,709
(126,573)
Note
31 March 2023
Gross amounts
Gross amounts of recognised Net amounts
of recognised financial subject to
financial instruments offsetting
instruments offset arrangements
GROUP £’000 £’000 £’000
Financial assets
Amounts due from brokers
193,558
(5,404)
188,154
193,558
(5,404)
188,154
Financial assets
Trade and other payables
21
(51,041)
1,632
(49,409)
Amounts due to brokers
(8,931)
4
(8,927)
(59,972)
1,636
(58,336)
Fair value estimation
IFRS 13 “Fair Value Measurement” requires the Group to classify its financial assets and liabilities according to a hierarchy that reflects the observability of
significant market inputs. The three levels of the fair value hierarchy are defined below:
– Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;
– Level 2 – inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly
(thatis,d(that is, derived from prices); or
– Level 3 – inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).
Valuation techniques
Specific valuation techniques used to value financial instruments include:
– the use of quoted market prices or dealer quotes for similar instruments; and
– for foreign currency forwards – forward exchange rates at the balance sheet date.
There have been no changes to the fair value hierarchy or valuation techniques for any of the Group’s financial instruments held at fair value in the year
(31Marc(31 March2023h 2023: none).
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 163
Annual Report and Financial Statements 2024
Notes to the consolidated and parent company financial statements continued
For the year ended 31 March 2024
29. Financial instruments continued
Valuation techniques continued
The fair value of the Group’s financial assets and liabilities measured at amortised cost approximates their carrying amount.
31 March 2024
Level 1 Level 2 Level 3 Total
GROUP £’000 £’000 £’000 £’000
Financial investments
50,889
—
32
50,921
Derivative financial instruments (current assets)
—
31,627
—
31,627
Derivative financial instruments (current liabilities)
—
(7,074)
—
(7,074)
50,889
24,553
32
75,474
31 March 2023
Level 1 Level 2 Level 3 Tot al
GROUP £’000 £’000 £’000 £’000
Financial investments
30,572
—
34
30,606
Derivative financial instruments (current assets)
—
14,231
—
14,231
Derivative financial instruments (current liabilities)
—
(2,033)
—
(2,033)
30,572
12,198
34
42,804
30. Financial risk management
The Group’s day-to-day business activities naturally expose it to strategic, financial (including credit, counterparty, market and liquidity) and operational risks.
The Board accepts that it cannot place a cap or limit on all of the risks to which the Group is exposed to; however, eecti, effective risk management ensures that risks
are managed to an acceptable level. The Board is ultimately responsible for the implementation of an appropriate risk strategy, defining and communicating
the Group’s risk appetite, the establishment and maintenance of eecce of effective systems and controls, and continued monitoring of the adherence to Group policies.
The Group has adopted a standard risk process, through a five-step approach to risk management: risk identification; risk assessment; risk management;
risk reporting; and risk monitoring. The approach to managing risk within the business is governed by the Board-approved Risk Appetite Statement and Risk
Management Framework.
The Board sets the strategy and the policies for managing these risks and delegates the monitoring and management of these risks to various Committees
including the Executive Risk Committee, which in turn reports to the Group Risk Committee.
The Group’s ICARA review document is prepared in accordance with the Investment Firm Prudential Regime (“IFPR”) that is articulated in the Financial Conduct
Authority’s (“FCA”) MIFIDPRU Prudential sourcebook. The ICARA process is designed to cover the identification, monitoring and mitigation of harms, business
model planning and forecasting, recovery and wind-down planning, and assessing the adequacy of financial resources.
Financial risks arising from financial instruments are categorised into market, credit, counterparty and liquidity risks which, together with how the Group
categorises and manages these risks, are described below.
Market risk
Market risk is defined as the risk that the value of our residual portfolio will decrease due to the change in market risk factors. The three standard market risk
factors are price moves, interest rates and foreign exchange rates.
Mitigation of market risk
The Group benefits from a number of factors which also reduce the volatility of its revenue and protect it from market shocks as follows:
– Natural mitigation of concentration
The Group acts as a market maker in over 10,000 cross-asset class instruments, specifically equities, equity indices, commodities, treasuries, foreign
exchange and cryptocurrencies. Due to the high level of notional turnover there is a high level of internal risk crossing and natural aggregation across
instruments and asset classes to mitigate significant single instrument concentration risk within the portfolio.
– Natural aggregation
In the year ended 31 March 2024, the Group had over 55,000 trading active clients. This large international client base has a diverse range of trading strategies
resulting in the Group enjoying a high degree of natural aggregation between clients. This “portfolio eefolio effect” leads to a significant reduction in the Group’s net
market risk exposure.
– Ease of hedging
The Group predominantly acts as a market maker in linear, highly liquid financial instruments in which it can easily neutralise market risk exposure through its
prime broker (“PB”) arrangements. In order to avoid over-reliance on one arrangement the Group aims to have at least two PBs per asset class. For instruments
where there is no equivalent underlying market (e.g. Countdowns) the Group controls its risk through setting prudent position/exposure limits. This is further
augmented by dealer monitoring and intervention, which can take the form of restricting the size oered or, if deemize offered or, if deemed necessary, restricting the clients’ ability
totake a posto take a position in an instrument.
Market risk limits
Market risk exposures are managed in accordance with the Group’s Risk Appetite Statement and Group Risk Management Framework to ensure that the
Grouphas sp has suufficient capital resources to support the calculated market risk capital requirement as well as staying within its risk appetite. The Group manages
thiscthis component under notional position limits that are set on an instrument and asset class level with overarching capital-based limits.
164 – CMC Markets plc
Annual Report and Financial Statements 2024
30. Financial risk management continued
Market risk continued
Client exposures can vary significantly over a short period of time and are highly dependent on underlying market conditions. The Group’s own funds
requirements (“OFR”) are calculated in accordance with the IFPR. The market risk OFR has increased compared to the prior year and remains within the
Board-approved risk appetite.
GROUP OFR
31 March 2024 31 March 2023
£’000 £’000
Asset class
Consolidated equities
41,367
38,872
Commodities
10,545
6,562
Fixed income and interest rates
2,613
677
Foreign exchange
26,182
21,806
Cryptocurrencies
699
589
81,406
68,506
Market price risk – stress testing
Group Financial Risk conducts market price risk stress testing on a daily basis to quantify the potential losses to which the Group is exposed from adverse market
moves to its residual exposure. The residual exposure is derived by all products oered to cliffered to clients, after taking into account the hedging performed by the Group in
accordance with the hedging strategy.
A range of risk measurement techniques are used including Value at Risk (“VaR”), Expected Shortfall (“ES”) and Stress Testing models. The models are
performed for both likely and probable scenarios as well as an extreme stress scenario, where the stress factors simulate low probability high severity events
toasseto assess potential losses from tail events.
The end-of-day market risk VaR model is performed using a one-day holding period with a 99% confidence interval with a 12-month lookback. A more severe
stress is also performed, based on maximum daily moves in the same lookback period.
In addition, for asset classes where the Group sees high intraday client turnover, stress testing is performed on intraday exposures by stressing the largest
positions during the trading session.
The VaR holding period is one day; therefore the model assumes exposure is maintained and does not take into account potential risk mitigation actions which the
desk can take by hedging the net exposure intraday. The stress factors are reviewed and updated periodically ensuring recent volatility is captured in the model.
The table below shows the end-of-day market risk VaR model results:
31 March 31 March
2024 2023
£’000 £’000
Market risk
(10,778)
(18,284)
Non-trading book interest rate risk
Interest rate risk arises from either less interest being earned or more being paid on interest-bearing assets and liabilities due to a change in the relevant floating rate.
The Group is exposed to interest rate risk through a limited number of channels: income on segregated client and own funds; debits on client balances that are
over a pre- defined threshold; an exposure to the credit market through fixed income investments and liquidity money market funds; and changes to the value
of fixed rate UK government securities held. The Group benefits from a robust cash position that is actively optimised to manage exposure to interest rates and
enhance return.
The sensitivity analysis performed is based on a reasonable and possible move in the floating rate by 1.00% upwards (31 March 2023: 1.00%) and 1.00%
downwards (31 March 2023: 0.50%).
This is summarised in the below table and reflects the Group’s view that in the current economic environment, interest rate volatility is unlikely to have a significant
impact on the profits of the Group.
Changes in interest rate variables result in a decrease/increase in the fair value of fixed rate financial assets classified as fair value through OCI. This has no
material impact on the Group’s equity.
31 March 2024
Absolute Absolute
increase decrease
GROUP £’000 £’000
Impact of
1.00% change
1.00% change
Profit after tax
4,232
(5,287)
Equity
4,232
(5,287)
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 165
Annual Report and Financial Statements 2024
Notes to the consolidated and parent company financial statements continued
For the year ended 31 March 2024
30. Financial risk management continued
Non-trading book interest rate risk continued
31 March 2023
Absolute Absolute
increase decrease
GROUP £’000 £’000
Impact of
1.00% change
0.50% change
Profit after tax
4, 274
(2,572)
Equity
4, 274
(2,572)
Non-trading book foreign exchange risk
Foreign exchange risk is the risk that the Group’s results are impacted by movements in foreign exchange rates. CMC is exposed to foreign exchange risk in the
form of transaction and translation exposure.
Transaction exposure is from holdings of cash and other current assets and liabilities in a currency other than the base currency of the entity. This risk is hedged each
month by the treasury team according to a policy based on a cap and floor model, with gains/losses recognised in the income statement. Any foreign exchange
transaction exposures are hedged in accordance with the Group Foreign Exchange Hedging Policy. Given the eectivee effectiveness of the hedging programme (income
statement impact in year ended 31 March 2024: loss of £1,033,000 (year ended 31 March 2023: loss of £845,000), no sensitivity analysis has been performed.
The instruments used for economically hedging foreign exchange risk are derivative financial instruments and are reported as described in note 17.
Translation exposure occurs when the net assets of an entity are denominated in a foreign currency other than GBP, when the Consolidated Statement of
Financial Position is prepared .
Credit risk
Credit risk is the risk of losses arising from a counterparty failing to meet its obligations as they fall due. Credit risk is divided into credit, counterparty and
settlement risk. Below are the channels of credit risk the Group is exposed through:
– financial institutions (“FIs”); and
– clients.
Financial institution credit risk
The Group has relationships with a number of counterparties that provide prime brokerage and/or banking services (e.g. cash accounts, foreign exchange
trading, credit facilities, custodian services, etc.).
FI credit risk can materialise in the following ways:
– For FIs used as a bank and those as a broker, the Group does not receive the funds the FIs hold on the Group’s account.
– For FIs used as a prime broker, a default will result in a loss of any unrealised profits and could cause the need to re-hedge at a dieree at a different broker at a
dierdifferent price.
– For FIs used as a cryptocurrency counterparty, the loss of physical assets.
Mitigation of FIs credit risk
To mitigate or avoid a credit loss:
– The Group maintains, where practical, a range of relationships to reduce over-reliance on a single FI – as detailed in the Group Counterparty Concentration
Risk Policy.
– The Group regularly monitors the creditworthiness of the FIs that it is exposed to and reviews counterparties at least annually – as detailed in the Group Hedge
Counterparty Selection Policy.
– The Group has introduced a new internal stress test model to measure exposure to credit risk, which is based on regulatory adopted methodology for
calculating unexpected loss. Inputs to the model include credit ratings which are used to derive a probability of default for each counterparty.
Contractual losses can be reduced by the “close-out netting” conditions in the ISDA and broker agreements. If a specified event of default occurs, all transactions
or all of a given type are terminated and netted (i.e. set o ag. set off against each other) at market value or, if otherwise specified in the contract or if it is not possible to obtain
a market value, at an amount equal to the loss suered by the nffered by the non-defaulting party in replacing the relevant contract.
In order to manage both credit and counterparty credit risk within appetite the Group sets internal limits. As defined in the Group’s policies the limits determine the
total balance that can be held with each rated FI, each unrated FI and each cryptocurrency counterparty. These limits are expressed as a maximum percentage
of capital, in the case of rated FIs, or a fixed amount for both unrated FIs and cryptocurrency counterparties. Liquidity Risk Management monitors the credit
quality of all FIs and cryptocurrency counterparties, by tracking the credit ratings issued by Standard & Poor’s, Moody’s and Fitch rating agencies, the credit
default swap (“CDS”) spreads determined in the CDS market, share price, performance against a relevant index, and other relevant metrics.
All rated FIs that the Group transacts with are of investment grade quality, with the exception of one counterparty to which the Group has limited exposure;
however, no quantitative credit rating limits are set by the Group that FIs must exceed because the choice of suitable FIs is finite and therefore setting minimum
rating limits could lead to the possibility that no FIs are able to meet them. As an alternative, the Group reviews negative rating action and large CDS spread widening to
FIs on a case-by-case basis. Should an institution’s credit rating fall below investment grade, the Executive Risk Committee will be called and options discussed.
Possible actions by the Group to reduce exposure to FIs depend on the nature of the relationship and the practical availability of substitute FIs. Possible actions
include the withdrawal of cash balances from a FI on a daily basis, switching a proportion of hedge trading to another prime broker FI or ceasing all commercial
activity with the FI.
166 – CMC Markets plc
Annual Report and Financial Statements 2024
30. Financial risk management continued
Credit risk continued
Mitigation of FIs credit risk continued
The tables below present CMC Markets plc’s exposure to credit institutions (or similar) based on their long-term credit rating:
31 March 2024
Net derivative
Cash and cash Amounts due financial
equivalents from brokers Other assets instruments Total
GROUP £’000 £’000 £’000 £’000 £’000
AA+ to AA-
32,841
3
—
—
32,844
A+ to A-
30,535
131,631
—
—
162,166
BBB+ to BBB-
60,897
84,042
—
—
144,939
Unrated
36,027
13,206
12,258
24,553
86,044
160,300
228,882
12,258
24,553
425,993
31 March 2023 (Restated)
Net derivative
Cash and cash Amounts due financial
equivalents from brokers Other assets instruments Tot al
GROUP £’000 £’000 £’000 £’000 £’000
AA+ to AA-
52,744
—
—
—
52,744
A+ to A-
37,138
—
—
—
37,138
BBB+ to BBB-
41,361
182,951
—
1,106
225,418
Unrated
14,975
5,203
1,984
11,092
33,254
146,218
188,154
1,984
12,198
348,554
Client counterparty risk
The Group’s CFD, spread bet and the recently launched OTC options business operates a real-time mark-to-market trading facility where clients are required to
lodge collateral against positions, with any profits and losses generated by the client credited and debited automatically to their account. As with any leveraged
product oeuct offering, there is the potential for a client to lose more than the collateral lodged.
Client counterparty risk captures the risk associated with a client defaulting on its obligations due to the Group. As the Group does not oer ms not offer most of its retail clients
credit terms and has a robust liquidation process, client counterparty risk will in general only arise when markets and instruments gap and the movement in the
value of a client’s leveraged portfolio exceeds the value of the equity that the client has held at the Group leaving the client account in deficit.
“Negative balance protection” accounts do not pose counterparty risk to the Group as the maximum loss for this account type is limited to their account value.
In addition, the Group provides stockbroking services in the UK and Singapore, as well as in Australia where it operates as a designated clearing broker. For the
stockbroking business trading is subject to settlement process for financial products. This exposes the Group to settlement risk if a client or counterparty do
not fulfil their side of the agreement by failing to deliver the underlying stock or value of the contract. The majority of client orders are fully vetted at the point of
execution, which limits the settlement exposure generation. In relation to other counterparties, the Group is exposed to settlement risk from executing brokers
fortransfor transactions not directly cleared on an exchange.
Mitigation of client counterparty risk
– Liquidation process
This is the automated process of closing a client’s open position(s) if the account’s total equity is not enough to cover a predefined percentage of required
margin for the portfolio held.
– Pre-emptive processes are also in place where a client’s free equity (total equity less total margin requirement) becomes negative
1
. At this point the client’s
account is restricted from increasing their position and a notification is sent inviting them to review their account.
1 Clients in some regions may use limited risk accounts, where it is guaranteed that a client cannot move to a negative equity balance.
– Tiered margin
Tiered margins were implemented in September 2013 on the Next Generation platform. It enables the Group to set higher margin rates (therefore requiring
a client to lodge more collateral) against positions that are deemed to be more risky due to risk profile, which could be due to size relative to the underlying
turnover, the Group’s risk appetite or volatility of the instrument.
– Position limits
Position limits can be implemented on an instrument and client level. The instrument level enables the Group to control the total exposure the Group acquires in
a single instrument. At a client level this ensures that the client can only reach a pre-defined size in any one instrument or asset class. Additionally, a position limit
on an underlying instrument can be applied limiting the overall exposure that can be reached through dierent futufferent futures of the same underlying . For FX the client
position limits are based on Net Open Position (“NOP”) which limits the currency exposure a client can reach via diea different FX pairs.
Client counterparty risk stress testing
Group Financial Risk conducts client counterparty risk stress testing on a daily basis based on an internal model developed to assess the potential client
counterparty risk exposure. The Group’s stress testing is based on scenarios with dierent sifferent severity including stress factors which simulate low probability
severeevents to asssevere events to assess potential impact.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 167
Annual Report and Financial Statements 2024
Notes to the consolidated and parent company financial statements continued
For the year ended 31 March 2024
30. Financial risk management continued
Credit risk continued
Client receivables history
The Group determines expected credit losses for amounts due from clients, based on historical experience and forward-looking considerations. The total loss
allowance provided for the year was £190,000 (year ended 31 March 2023: loss allowance reversed : £1,408,000 ), which amounts to 0.1% of total revenue (year
ended 31 March 2023: 0.4%). During the year, trade receivables of £473,000 were written o, whitten off, which represented 0.1% of revenue (year ended 31 March 2023:
£1,615,000, 0.5% of revenue).
The table below details the movement on the Group allowance for expected credit losses of trade receivables under the expected credit loss model:
GROUP
Year ended Year ended
31 March 2024 31 March 2023
£’000 £’000
At the beginning of the year
4,247
6,219
Loss allowance on trade receivables (reversed)/provided
190
(357)
Trade receivables written off
(473)
(1,615)
At the end of the year
3,964
4,247
Debt ageing analysis
The Group seeks to minimise the eece the effects of client debts on the Company’s profit and loss. Client debts are managed very early in their lifecycle in order to minimise
the likelihood of them ageing. Debts that are past due carry an expected credit loss provision as set out in the table below:
31 March 2024
Debt Provision
GROUP £’000 £’000
Less than one month
5,596
1
One to three months
42
15
Three to twelve months
270
203
Over twelve months
4,028
3,745
9,936
3,964
31 March 2023
Debt Provision
GROUP £’000 £’000
Less than one month
936
23
One to three months
3,367
11
Three to twelve months
189
146
Over twelve months
4,229
4,066
8,721
4,247
The ECL on amounts due from brokers, accrued income and the Company’s trade and other receivables balances is immaterial in both current and prior years.
Please refer to note 19 for information on the ECL on UK government securities and note 20 for information on the ECL on cash and cash equivalents.
Liquidity risk
Liquidity risk is the risk that there is insusufficient available liquidity to meet the obligations of the Group as they fall due.
Liquidity is managed centrally for the Group by the treasury team, with oversight from a second line provided by the liquidity risk team. The Group utilises a
combination of liquidity forecasting and stress testing (formally in the ICARA) to ensure that it retains access to sus to sufficient liquid resources under both normal and
stressed conditions to meet its liabilities as they fall due. Liquidity forecasting incorporates the impact of liquidity regulations in force in each jurisdiction that the
Group is active in and other impediments to the free movement of liquidity around the Group, including its own protocols on minimum liquidity to be retained by
overseas entities. The Group has introduced a revised Liquid Asset Threshold Requirement (“LATR”) model in line with the IFPR regulatory requirements, to
better estimate the maximum amount of liquid assets required over the course of the next 12 months under business-as-usual and periods of plausible stress.
The new model is based on forward-looking estimates and is updated on a daily basis, providing a dynamic management of requirements.
Liquidity stress testing is performed quarterly using a range of firm-specific and market-wide scenarios that represent severe but plausible stress events that
the Group could be exposed to over the short and medium term. The firm takes a holistic stress testing approach, using a scenario comprised of multiple stress
events occurring simultaneously. The Group ensures that the tests are commensurate to its current and future liquidity risk profile. Output from the quarterly
stress testing process is used to calibrate a series of limits and metrics which are monitored and reported to senior management daily. This process seeks to
ensure that the Group has appropriate sources of liquidity in place to meet its liabilities as they fall due under both “business as usual” and stressed conditions.
Due to the risk management strategy adopted and the changeable scale of the client trading book, the largest and most variable consumer of liquidity is PB
margin requirements. The collateral calls are met in cash from own funds and cash received from non-segregated clients who have signed a TTCA agreement
but to ensure liquidity is available for extreme spikes, the Group has a committed bank facility of £55.0 million, syndicated by two dieated by two different banks, to meet short-
term liquidity obligations to PBs in the event that it does not have suot have sufficient access to own cash and to leave a suave a sufficient liquidity buey buffer to cope with a stress event.
The Group does not actively engage in maturity transformation as part of its underlying business model and therefore maturity mismatch of assets and liabilities
does not represent a material liquidity risk. The maturity analysis tables are presented in note 29.
168 – CMC Markets plc
Annual Report and Financial Statements 2024
30. Financial risk management continued
Liquidity risk continued
Own funds
Own funds is a key measure the Group uses to monitor the overall level of liquidity available to the Group. Own funds includes investments in UK government
securities and corporate bonds, the majority of which are held to meet the Group’s regulatory threshold requirements under IFPR. The derivation of own funds is
shown in the table below:
GROUP
31 March 2024 31 March 2023
£’000 £’000
Cash and cash equivalents (net of bank overdraft)
160,300
146,218
Amount due from brokers
228,882
188,154
Other assets
12,258
1,984
Financial investments
50,921
30,606
Derivative financial instruments (excluding client CFD positions) (current assets)
—
1,106
452,361
368,068
Less: title transfer funds
(119,591)
(49,409)
Less: amount due to brokers
(6,982)
(8,927)
Less: derivative financial instruments (excluding client CFD positions) (current liabilities)
—
—
Own funds
325,788
309,732
The following Own Funds Flow Statement summarises the Group’s generation of own funds during each year and excludes all cash flows in relation to monies
held on behalf of clients. Additionally, short-term financial investments, amounts due from brokers and amounts receivable/(payable) on the derivative financial
instruments have been included within “own funds” in order to provide a clear presentation of the Group’s potential cash resources.
GROUP
Year ended Year ended
31 March 2024 31 March 2023
£’000 £’000
Operating activities
Profit before tax
63,333
52,163
Adjustments for:
Depreciation and amortisation
27,423
15,637
Other non-cash adjustments
2,045
1,629
Tax paid
(8,602)
(17,060)
Own funds generated from operating activities
84,199
52,369
Movement in working capital
(21,036)
(13,995)
Outflow from investing activities
Net purchase of property, plant and equipment and intangible assets
(19,876)
(28,221)
Other outflow from investing activities
(2,800)
(8)
Outflow from financing activities
Dividends paid
(13,688)
(35,040)
Share buyback
—
(27, 26 4)
Other outflow from financing activities
(7,319)
(6,754)
Total outflow from investing and financing activities
(43,683)
(97, 287)
Increase/(decrease) in own funds
19,480
(58,913)
Own funds at the beginning of the year
309,732
369,947
Effect of foreign exchange rate changes
(3,424)
(1,302)
Own funds at the end of the year
325,788
309,732
Capital management
The Group’s objectives for managing capital are as follows:
– to comply with the capital requirements set by the financial market regulators to which the Group is subject;
– to ensure that all Group entities are able to operate as going concerns and satisfy any minimum externally imposed capital requirements; and
– to ensure that the Group maintains a strong capital base to support the development of its business.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 169
Annual Report and Financial Statements 2024
Notes to the consolidated and parent company financial statements continued
For the year ended 31 March 2024
30. Financial risk management continued
Capital management continued
The capital resources of the Group consist of equity, being share capital reduced by own shares held in trust, share premium, other reserves and retained
earnings, which at 31 March 2024 totalled £403,493,000 (31 March 2023: £374,015,000). The Group has been compliant with all applicable prudential regulatory
requirements to which it is subject throughout the year.
The Group’s ICARA review document, prepared in accordance with FCA requirements, is an ongoing assessment of CMC Markets plc’s risks and risk mitigation
strategies, to ensure that adequate financial resources are maintained against risks that the Group wishes to take to achieve its business objectives.
The outcome of the ICARA is presented as an Internal Capital and Liquidity Assessment document covering the Group. It is reviewed and approved by the Board
at least on an annual basis.
Disclosure documents have been prepared that contain relevant information regarding the Group’s FCA regulated entities’ capital adequacy, risk
management objectives and policies, governance and remuneration policies and practices. These are available on the CMC Markets plc website
(www.cmcmarkets.com/group). The Group’s country-by-country reporting disclosure is also available in the same location on the website.
31. Share-based payment
The Group operates both equity and cash settled share based payment schemes for certain employees including Directors.
Current awards have been granted under the terms of the Management Equity Plan 2015 (“2015 MEP”), the Combined Incentive Plan (“2018 CIP”), the UK
Share Incentive Plan (“UK SIP”) and the International Share Incentive Plan (“Australian SIP”). Equity settled schemes are oerees are offered to certain employees, including
Executive Directors in the UK and Australia, and automatically vest on the vesting date subject to conditions described below for each scheme. Cash settled
schemes are oerees are offered to certain employees outside of the UK and Australia. During the year ended 31 March 2024 equity schemes for UK employees were
settled net of employee taxes due. The rights of participants in the various employee share schemes are governed by detailed terms, including in relation to
arrangements which would apply in the event of a takeover.
Consolidated Income Statement charge for share-based payments
The total costs relating to these schemes for the year ended 31 March 2024 was £2,757,000 (year ended 31 March 2023: £2,229,000).
For the year ended 31 March 2024 the charge relating to equity settled share-based payments was £2,364,000 (year ended 31 March 2023: £2,123,000) and the
charge relating to cash settled share-based payments was £393,000 (year ended 31 March 2023: £106,000).
No shares were gifted to employees during the year (year ended 31 March 2023: nil).
Current schemes
2015 MEP
Share awards granted under the 2015 MEP are predominantly equity settled, with the exception of certain participants that are cash settled. The Remuneration
Committee approves any awards made under the 2015 MEP. Current schemes are:
– Long Term Incentive Plan: awards to senior management and critical sta, excludal staff, excluding Executive Directors. These are awarded in the form of share awards and
Options. The share awards have dividend equivalence where additional shares will be awarded in place of dividends on vesting. The only vesting conditions of
the 2020 and 2021 equity settled awards is that employees remain employed by the Group, with the 2022 equity awards having a non-market performance
condition of cumulative PBT over a three-year period in addition to remaining employed by the Group. This was revised in May 2023, with the performance
condition now being aligned to net operating income over the same period. The vesting conditions of the 2023 Option awards are that employees remain
employed by the Group and the price of the CMC Markets plc’s shares must be greater than the relevant exercise price at the vesting date.
The fair value of share awards were calculated using the average of the share price three days prior to the grant date. The fair value of the Options granted during
the year was calculated using the Black-Scholes model that takes into account the exercise price, the term of the option, the impact of dilution (where material),
the share price at grant date and expected price volatility of the underlying share, the expected dividend yield, the risk-free interest rate for the term of the option,
and the correlations and volatilities of the peer group companies.
2018 CIP
Share awards granted to the Executive Directors under the 2018 CIP have been in the form of conditional awards and are equity settled. The Remuneration
Committee approves any awards made under the 2018 CIP. Shares awarded are deferred over a period of at least three years subject to a performance underpin.
The Committee will review Group performance over the relevant period, taking into account factors such as: a) the Company’s TSR performance; b) aggregate
profit levels; and c) any regulatory breaches during the period.
170 – CMC Markets plc
Annual Report and Financial Statements 2024
31. Share-based payment continued
Current schemes continued
Share awards
Number
Dividend
equivalent
Awarded Forfeited awarded Exercised
Share price At the start during the during the during the during the At the end
Scheme
at award
Vesting date
 of the year year year year year of the year
Combined Incentive Plan
349.2p
20 July 2023
107,774
—
(14,212)
—
(93,562)
—
Combined Incentive Plan
349.2p
20 July 2024
80,831
—
(10,640)
1,704
—
71,895
Combined Incentive Plan
349.2p
20 July 2025
80,828
—
(10,637)
1,704
—
71,895
Combined Incentive Plan
445.8p
22 July 2024
117,692
—
(24,000)
1,772
—
95,464
Combined Incentive Plan
445.8p
21 July 2025
88,268
—
(18,000)
1,329
—
71,597
Combined Incentive Plan
445.8p
20 July 2026
88,268
—
(18,000)
1,329
—
71,597
Combined Incentive Plan
280.8p
14 July 2025
96,788
—
(12,647)
2,129
—
86,270
Combined Incentive Plan
280.8p
13 July 2026
72,591
—
(9,482)
1,596
—
64,705
Combined Incentive Plan
280.8p
12 July 2027
72,591
—
(9,484)
1,596
—
64,703
Long Term Incentive Plan
445.8p
20 July 2023
402,093
—
(10,115)
—
(391,978)
—
Long Term Incentive Plan
280.8p
20 July 2025
1,473,020
—
(301,298)
38,498
—
1,210,220
Combined Incentive Plan
149.5p
21 July 2025
—
167,397
—
4,376
171,773
Combined Incentive Plan
149.5p
21 July 2026
—
125,548
—
3,282
128,830
Combined Incentive Plan
149.5p
21 July 2027
—
125,548
—
3,282
—
128,830
Total
2,680,744
418,493
(438,515)
62,597
(485,540)
2,237,779
The weighted average share price at exercise of awards was 154 pence, the weighted average exercise price of exercised awards for UK participants (354,692
shares) was £nil and for Australian participants (130,848 shares) was £nil. The weighted average remaining contractual life of share awards outstanding at 31 March
2024 was 1.5 years and the weighted average share price of share awards granted during the period was 149.5 pence.
Options
Awarded Forfeited Exercised
At the start during the during the during the At the end
Scheme
Exercise price
Vesting date
 of the year year year year of the year
Long Term Incentive Plan
152.8p
21 July 25
—
2,069,308
(384,718)
—
1,684,590
Long Term Incentive Plan
229.2p
21 July 26
—
5,653,374
(1,051,050)
—
4,602,324
Long Term Incentive Plan
305.6p
21 July 27
—
5,169,124
(961,022)
—
4,208,102
—
12,891,806
(2,396,790)
—
10,495,016
The weighted average remaining contractual life of options outstanding at 31 March 2024 was 2.5 years
In addition, cash settled share awards and options have been granted and vest in periods from July 2025 to July 2027. Balances of 179,551 share awards and 2,153,181
options remained at the end of the period, with a total carrying value of £382,000 as at 31 March 2024 (31 March 2023: £197,000). All of the share awards benefit
from dividend equivalence. The value of the share awards is the share price on the date these awards vest. The weighted average remaining contractual life of
share awards outstanding at 31 March 2024 was 1.3 years and the weighted average exercise price of exercised awards was £nil.
UK and Australia SIP awards
Shares awarded under the UK SIP scheme are held in trust in accordance with UK tax authority conditions and all shares awarded under the Australian scheme
are held in a UK trust. Employees are entitled to receive dividends in the form of additional shares on the shares held in trust as long as they remain employees.
UK employees are invited to subscribe for up to £1,800 of partnership shares relating to each tax year with the Company matching on a one-for-one basis.
AllmatAll matching shares vest after three years should the employee remain employed by the Group for the term of the award.
Australian employees are invited to subscribe for up to the equivalent of £1,800 of investment shares with the Company matching on a one-for-one basis.
Matching shares for each scheme vest on the third anniversary after award date should the employee remain employed by the Group for the term of the award.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 171
Annual Report and Financial Statements 2024
Notes to the consolidated and parent company financial statements continued
For the year ended 31 March 2024
31. Share-based payment continued
Current schemes continued
UK and Australia SIP awards continued
Number
Awarded Forfeited Exercised
Country Share price Vesting At the start during the during the during the At the end
of award
Award date
 at award period/date of the year year year year of the year
UK
April 2020 to
194.6p to April 2023 to
45,808
—
(1,689)
(44,119)
—
March 2021 425.2p March 2024
UK
April 2021 to
225.8p to April 2024 to
66,858
—
(3,958)
(5,123)
57,777
March 2022 518.0p March 2025
UK
April 2022 to
219.0p to April 2025 to
97,839
—
(9,618)
(7,103)
81,118
March 2023 313.6p March 2026
UK
April 2023 to
90.8p to April 2026 to
—
211,025
(8,102)
(9,425)
193,498
March 2024 182.0p March 2027
Australia
5 April 2020
201.0p
5 April 2023
2,314
—
—
(2,314)
—
Australia
6 April 2021
527.0p
6 April 2024
2,563
—
—
—
2,563
Australia
6 April 2022
270.0p
8 April 2025
3,174
—
—
—
3,174
Australia
6 April 2023
175.0p
6 April 2026
—
6,950
—
—
6,950
Total
218,556
217,975
(23,367)
(68,084)
345,080
The weighted share price at the exercise date of awards exercised during the year ended 31 March 2024 was 133.2 pence (year ended 31 March 2023:
253.5 pence).
The fair value of SIP awards is determined to be the share price at grant date without making adjustments for dividends as awardees are entitled to dividend
equivalents over the vesting period.
Movement in share awards and options
12,891,806 Options and 707,597 new share awards were granted in the year ended 31 March 2024 (year ended 31 March 2023: Options: Nil, Share awards:
1,947,449) and these are detailed above in the current schemes section. Movements in the number of share awards outstanding are as follows:
Year ended
Year ended 31 March 2024 31 March 2023
Options Share awards Share awards
GROUP Number Number Number
At beginning of year
—
2,899,300
1,712,119
Awarded (including dividend equivalents)
12,891,806
707,597
1,947,449
Forfeited
(2,396,790)
(493,413)
(187,699)
Exercised
—
(531,973)
(572,569)
At end of year
10,495,016
2,581,511
2,899,300
32. Retirement benefit plans
A defined contribution plan is a post-employment benefit plan into which the Group pays fixed contributions to a third-party pension provider and has no legal
or constructive obligation to pay further amounts. Contributions are recognised as sta expes staff expenses in the income statement in the years during which related
employee services are fulfilled.
The Group operates defined contribution pension schemes for its Directors and employees. The assets of the schemes are held separately from those of the
Group in independently administered funds.
The pension charge for these plans for the year ended 31 March 2024 was £3,439,000 (year ended 31 March 2023: £2,743,000).
33. Related party transactions
Company
The amounts outstanding with Group entities at year end were as follows:
COMPANY
Year ended Year ended
31 March 2024 31 March 2023
£’000 £’000
Amounts due from subsidiaries
—
1,879
Amounts due to subsidiaries
4,426
—
All amounts above are repayable on demand and are non-interest bearing.
172 – CMC Markets plc
Annual Report and Financial Statements 2024
33. Related party transactions continued
Group
Transactions between the Group and its other related parties are disclosed below:
Compensation of key management personnel
GROUP
Year ended Year ended
31 March 2024 31 March 2023
£’000 £’000
Key management compensation:
Short-term employee benefits
3,280
2,620
Post-employment benefits
88
57
Share-based payments
632
609
4,000
3,286
GROUP
Year ended Year ended
31 March 2024 31 March 2023
£’000 £’000
Aggregate remuneration of highest paid Director
1,027
871
Key management comprises the Board of CMC Markets plc only. Compensation of key management personnel is disclosed in the Directors’ remuneration
report on page 94.
Directors’ transactions
A number of the Directors have company credit cards and have, during the course of the year, used the company credit cards for personal expenses. All personal
expenses have been reimbursed by the Directors, with the exception of the item above.
There were no other transactions with Directors.
34. Contingent liabilities
The Group’s geographical reach exposes it to a high degree of uncertainty regarding the interpretation of local regulatory, tax and legal matters in each territory
in which it has operations. In addition, the Group is party to various contractual relationships that could result in non-performance claims and other contractual
breaches and from time to time is involved in disputes as part of the ordinary course of business.
In certain instances, legal disputes can pose a have a significant financial exposure, however the Group’s manages these risks proactively to resolve disputes and
claims are usually resolved without any material loss. The Group makes provision for claims where costs are likely to be incurred.
Where there are uncertainties regarding regulatory, tax and legal matters and a provision has not been made, there are no contingent liabilities where the Group
considers any material adverse financial impact to be probable.
Notice of class action lawsuit
The Group received notice of a class action lawsuit being brought against one of its operating entities on 31 May 2022. The scope of the claim is still being defined,
and there has been no material progress. As a result an assessment regarding the probability and size of financial outflow cannot be determined.
Brexit approach
There is regulatory uncertainty regarding the Group’s historical approach to the use of reverse solicitation provisions allowing EEA clients to trade with UK
subsidiaries after 31 December 2020. The risk to the approach has now been mitigated given the majority of EEA clients’ activities with the UK subsidiary ceased
prior to 31 March 2021. The Group continues to engage with the regulatory authorities in the EEA markets where the UK subsidiary continued to service clients
after 31 December 2020. Whilst it is possible that regulatory censure may result from these matters, they are in their early stages and such an outcome is not
currently considered probable.
UK banking surcharge
During the year ended 31 March 2024, the Group reached an agreement with the UK tax authority HMRC, in relation to the ability of its UK entities to satisfy
the conditions for exemption from the banking surcharge tax. The matter is now closed without any additional costs and with HMRC agreeing to the Group’s
original position that it was not subject to the banking surcharge tax for the periods in question. The group has therefore concluded that the potential exposure of
£23.4mil4 million arising from this matter as at 31 March 2023 is no longer in question and as such no contingent liability exposure exists as at the balance sheet date.
Open tax enquiries
The Group has open tax enquiries in relation to its European operations arising from historical product launches and more routine enquires in its North American
entities. The potential outcome of these enquiries is unclear and there is no certainty whether there may be a financial cost to the Group.
35. Ultimate controlling party
The Group’s ultimate controlling party is Lord Cruddas by virtue of his majority shareholding in CMC Markets plc.
36. Events after the reporting period
There were no significant events after the reporting period.
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 173
Annual Report and Financial Statements 2024
Shareholder information
Group history
CMC Markets plc began trading
in 1989 as a foreign exchange
broker, led by founder Lord Peter
Cruddas. In1996, the Group
launched the world’s first online
retail forex trading platform,
oering its clients the opportunity
to take advantage of markets
previously only accessible to
institutional traders.
CMC Markets plc has since become a global leader in online trading. There
have been a number of significant milestones for the Group over the past 30
years, as it has expanded into new markets around the world and continues to
promote innovation and new trading technology.
In 2000, CMC Markets plc expanded its business to become a CFD broker.
A year later, the Group launched an online financial spread betting service,
becoming the first spread betting company to release the daily Rolling Cash®
bet. The groundbreaking daily Rolling Cash® concept was to become an
industry benchmark. In 2002, CMC Markets plc opened its first overseas
oce in Sydney, launching into the Australian market as an online CFD and
forex provider. By 2007, the Group had expanded its global footprint with
oces in New Zealand, Germany, Canada, Singapore and Sweden. Further
global growth followed over the next few years, with oces opened across
Europe – and most recently in Poland, in 2015. The Group continued to grow
its product oering during the year, following the launch of its fixed-odds
Countdowns product in 2015.
The Company successfully listed on the London Stock Exchange in February
2016. In April 2016 CMC Markets plc successfully introduced Digital 100s.
Further cementing its place as one of the industry leaders, the Group
was awarded a number of important accolades during the year. In the
2016 Investment Trends UK Leveraged Trading Report, which measures
customer satisfaction, CMC Markets plc ranked first across 17 service
categories among CFD traders. The Group achieved the highest rating for
overall satisfaction, mobile trading, platform features and charting in all three
product segments of spread betting, CFD trading and FX. Additional notable
recognition came as the Company won Financial Services Provider of the
Year for the fourth successive year, an award voted for by the readers of
Shares Magazine.
The Company also received Best CFD Broker for its burgeoning institutional
oering, in line with one of its core strategic objectives.
The Company successfully completed the white label stockbroking
partnership with ANZ Bank in Australia during 2018, representing the largest
migration of client accounts in Australian Stock Exchange history and making
the Company the second largest retail stockbroker in the country.
In 2021 CMC Markets launched its dedicated institutional brand, CMC
Connect, positioning the Company to service the ever-growing number of
client types interested in its products.
174 – CMC Markets plc
Annual Report and Financial Statements 2024
1989
CMC Markets plc begins
operations in the UK
1996
Launches the world’s first online
retail FX trading platform
2000
Starts oering CFDs in the UK
2001
Launches online spread betting
service in the UK
Timeline
2002
Opens first non-UK oce in
Sydney, Australia
2005
Oces opened in Beijing, Canada
and Germany
2007
Singapore and Sweden oces
opened; and Goldman Sachs
purchases 10% stake
2008
CMC Markets (Australia) starts
oering a stockbroking service
following the acquisition of local
stockbroker Andrew West & Co
2010
Next Generation platform is
launched; oces opened in Italy
and France; and spread betting
iPhone app launched in the UK
2011
CMC Markets plc wins Financial
Services Provider of the Year
(Shares Magazine)
2012
Spread betting app for
Android™ launched
2013
CMC Markets plc wins 33
industry awards globally
2014
CMC Markets plc celebrates 25
years of being a world leader in
online trading
2015
Countdowns launched;
Poland and Austria oces
opened; and Stockbroking Pro
platform launched
2016
CMC Markets plc lists on the
London Stock Exchange,
trading as CMCX; and Digital
100s launched
2018
CMC Markets (Australia)
completes the ANZ Bank white
label stockbroking transaction
2019
CMC Markets plc celebrates its
30th year and launches exclusive
cryptocurrency, forex and
commodity indices
2020
CMC Markets plc releases
dedicated institutional brand,
CMC Connect
2022
CMC Invest launched in the UK,
oering stockbroking services to
UK clients
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 175
Annual Report and Financial Statements 2024
Shareholder information continued
Five-year summary
Group income statement
For the year ended 31 March
2024
£m
2023
£m
2022
(Restated)
£m
2021
(Restated)
£m
2020
£m
Net operating income 332.8 288.4 281.9 409.8 252.0
Adjusted operating expenses (267.2) (233.9) (188.3) (184.7) (151.3)
Operating profit 65.6 54.5 93.6 225.1 100.7
Share of results of associates (0.3) — — — —
Finance costs (2.0) (2.3) (2.1) (1.7) (2.1)
Profit before tax 63.3 52.2 91.5 223.3 98.7
Taxation (16.4) (10.8) (20.0) (45.8) (11.7)
Profit after tax 46.9 41.4 71.5 177.6 86.9
Other metrics
2024 2023
2022
(Restated)
2021
(Restated) 2020
Own funds generated from operations (£m) 84.2 52.4 88.1 199.3 102.0
Profit margin
PBT margin (%) 19.0 18.1 32.5 54.5 39.2
Earnings per share (“EPS”)
Basic EPS (pence) 16.7 14.7 24.6 61.3 30.1
Diluted EPS (pence) 16.7 14.6 24.5 61.0 29.9
Dividend per share
Interim dividend per share (pence) 1.00 3.50 3.50 9.20 2.85
Final dividend per share (pence) 7.30 3.90 8.88 21.43 12.18
Total ordinary dividend per share (pence) 8.30 7.40 12.38 30.63 15.03
Client metrics (unaudited)
2024 2023 2022 2021 2020
Trading revenue per active client (£) 4,685 3,968 3,575 4,560 3,750
Trading number of active clients 55,294 58,737 64,243 76,591 57,202
176 – CMC Markets plc
Annual Report and Financial Statements 2024
Five-year summary continued
Group statement of financial position
At 31 March
2024
£m
2023
£m
2022
(Restated)
£m
2021
(Restated)
£m
2020
£m
ASSETS
Non-current assets
Intangible assets 28.9 35.3 30.3 10.3 4.6
Property, plant and equipment 28.5 22.8 23.2 25.0 28.1
Deferred tax assets 6.2 4.8 6.0 6.4 16.5
Financial investments — — 13.5 — —
Trade and other receivables 2.8 2.7 1.8 1.8 2.3
Investment in associates 2.5 — — — —
Total non-current assets 68.9 65.6 74.8 43.5 51.5
Current assets
Trade and other receivables 162.0 130.6 148.2 129.8 186.3
Derivative financial instruments 31.6 14.2 8.8 6.2 5.4
Current tax recoverable 1.9 9.0 1.6 2.2 0.8
Financial investments 50.9 30.6 14.5 28.1 25.4
Other assets 12.3 2.0 13.4 — —
Amounts due from brokers 228.9 188.2 208.9 267. 8 134.3
Cash and cash equivalents 160.3 146.2 176.6 118.9 84.3
Total current assets 647.9 520.8 572.0 553.0 436.5
Total assets 716.8 586.4 646.8 596.5 488.0
LIABILITIES
Current liabilities
Trade and other payables 272.8 182.2 212.6 158.3 177.1
Amounts due to brokers 7.0 8.9 12.4 13.8 —
Derivative financial instruments 7.1 2.0 3.7 2.7 2.4
Share buyback liability — — 27.3 — —
Borrowings — — 0.2 0.9 0.9
Lease liabilities 4.9 5.6 4.9 4.6 4.7
Current tax payable 2.1 0.4 1.7 0.3 —
Short-term provisions 3.9 0.8 0.4 1.9 0.5
Total current liabilities 297. 8 200.1 263.2 182.5 185.6
Non-current liabilities
Trade and other payables — — — — —
Borrowings — — — 0.2 0.8
Lease liabilities 12.0 6.2 9.3 10.8 14.6
Deferred tax liabilities 3.2 4.0 3.3 1.6 2.2
Long-term provisions 0.3 2.1 2.1 1.8 1.9
Total non-current liabilities 15.5 12.3 14.7 14.4 19.5
Total liabilities 313.3 212.4 27 7.9 196.9 205.1
EQUITY
Total equity 403.5 374.0 368.9 399.5 282.9
Total equity and liabilities 716.8 586.4 646.8 596.5 488.0
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 177
Annual Report and Financial Statements 2024
Shareholder information continued
Proposed final dividend for the
year ended 31 March 2024
Ex-dividend date: Thursday 11 July 2024
Record date: Friday 12 July 2024
Dividend payment date: Friday 9 August 2024
Annual General Meeting
The 2024 AGM will be held at 10:00am on
Thursday 25 July 2024 at 133 Houndsditch,
London EC3A 7BX.
Registrars/shareholder enquiries
Link Group can be contacted to deal with any
questions regarding your shareholding using the
contact details listed below. Alternatively, you can
access www.cmcmarketsshares.co.uk, where
you can view and manage all aspects of your
shareholding securely.
E: shareholderenquiries@linkgroup.co.uk
Mail
Link Group
10th Floor
Central Square
29 Wellington Street
Leeds LS1 4DL
Phone
T: 0371 664 0300
Calls to 0371 664 0300 are charged at the
standard geographic rate and will vary by provider.
Calls outside the United Kingdom are charged at
the applicable international rate.
Phone lines are open between 9:00am and
5:30pm, Monday to Friday excluding public
holidays in England and Wales.
CMC Markets plc
133 Houndsditch
London
EC3A 7BX
United Kingdom
Registered number: 05145017
T: 020 7170 8200
www.cmcmarkets.com
LEI: 213800VB75KAZBFH5U07
Company Secretary
Roy Tooley
Investor relations
E: investor.relations@cmcmarkets.com
www.cmcmarkets.com/group/investor-relations
Brokers
Peel Hunt LLP
100 Liverpool Street
London
EC2M 2AT
RBC Capital Markets
100 Bishopsgate
London
EC2N 4AA
Independent auditor
Deloitte LLP
1 New Street Square
London
EC4A 3HQ
Legal advisers
Linklaters LLP
One Silk Street
London
EC2Y 8HQ
Media relations advisers
Camarco
40 Strand
London
WC2N 5RW
Global oces
UK – head oce
CMC Markets plc, CMC Markets Holdings
Limited, CMC Markets CFD Overseas
Holdings Limited, CMC Markets Holdings
Ventures Limited, CMC Markets Investments
Limited, CMC Markets Nominees Limited,
CMC Markets Overseas Holdings Limited,
CMC Markets Services Limited, CMC
Markets UK Holdings Limited, CMC Markets
UK plc, CMC Spreadbet plc, Information
Internet Limited, CMC Markets Ventures
Limited, Opto Markets Limited, Opto
Markets LLC
133 Houndsditch
London
EC3A 7BX
T: +44 (0)20 7170 8200
E: info@cmcmarkets.com
www.cmcmarketsplc.com
Australia
CMC Markets Asia Pacific Pty Ltd,
CMC Markets Stockbroking Ltd, CMC
Markets Group Australia Pty Ltd, CMC
Markets Stockbroking Nominees Pty Ltd,
CMC Markets Stockbroking Nominees
(No. 2 Account) Pty Ltd, CMC Markets
Stockbroking Services Pty Ltd, Branch of
CMC Markets UK plc (Branch)
Level 20, Tower 3
International Towers
300 Barangaroo Avenue
Sydney
NSW 2000
T: 1300 303 888
T: +61 (0)2 8221 2100
E: support@cmcmarkets.com.au
E: brokingservice@cmcmarkets.com.au
www.cmcmarkets.com.au
Austria
CMC Markets Germany GmbH
Zweigniederlassung Wien
Information Internet Limited (Branch)
The ICON Vienna, Wiedner Gürtel 13
Tower 24, 10th floor
1100 Wien
T: +43 (0)1 532 1349 0
E: kundenservice@cmcmarkets.at
www.cmcmarkets.com/de-at/
178 – CMC Markets plc
Annual Report and Financial Statements 2024
Global oces continued
Bermuda
CMC Markets Bermuda Holdings Limited
CMC Markets Bermuda Limited
Park Place, 55 Par La Ville Road
Hamilton, Bermuda HM11
T: +1 44 1703 8895
Canada
CMC Markets Canada Inc
CIBC Square
Level 35, Suite 3550
81 Bay Street, Toronto
Ontario MSJ 1E6
T: +1 416 682 5000
T: +86 (0)10 6607 00211
E: info@cmcmarkets.ca
www.cmcmarkets.ca
www.cmcmarkets.cn
Germany
CMC Markets Germany GmbH
Garden Tower
Neue Mainzer Straße 46-50
60311 Frankfurt am Main
T: +49 (0)69 2222 44 000
E: kundenservice@cmcmarkets.de
www.cmcmarkets.com/de-de/
New Zealand
CMC Markets NZ Ltd
Level 39
23 Albert Street
Auckland, 1010
T: +64 (0)9 359 1200
E: support@cmcmarkets.co.nz
www.cmcmarkets.com/en-nz/
Norway
CMC Markets Germany GmbH Filial Oslo
Filial Oslo (Branch)
Fridtjof Nansens Plass 6
0160 Oslo
T: +47 22 01 97 02
E: info@cmcmarkets.no
www.cmcmarkets.no
Poland
CMC Markets Germany GmbH sp. z o.o.
oddział w Polsce (Branch)
Emilii Plater 53
00-113 Warsaw
T: +48 22 160 5600
E: biuro@cmcmarkets.pl
www.cmcmarkets.pl
Singapore
CMC Markets Singapore Pte Limited,
CMC Markets Singapore Invest Pte Limited
9 Raes Place #30-02
Republic Plaza
Singapore 048619
T: 1800 559 6000 (local)
T: +65 6559 6000
E: info@cmcmarkets.com.sg
E: support@cmcinvest.sg
www.cmcmarkets.com/en-sg/
www.cmcinvest.sg
Spain
CMC Markets Germany GmbH,
Sucursal En Espana (Branch),
CMC Markets UK plc Sucursal en
Espana (Branch)
Paseo de la Castellana 40
9th Floor
28046 Madrid
T:+34 911 140 700
E: soporteclientes@cmcmarkets.es
www.cmcmarkets.com/es-es/
UAE
CMC Markets Middle East Ltd
Unit 2903, Level 29
ICD Brookfield Place
Dubai International Financial Centre,
Dubai 507183
T: +04 401 9218
E: connect.servicesmena@cmcmarkets.com
www.cmcmarkets.com/en-gb/connect
Strategic report Governance Financial statements Shareholder information
CMC Markets plc – 179
Annual Report and Financial Statements 2024
Appendix: Alternative Performance Measures
a. Reconciliation of trading net revenue
GROUP
2024
£m
2023
£m
Trading revenue (note 4) 274.3 252.0
Trading introducing partner commission and betting levies (note 3) (15.2) (18.9)
Trading net revenue 259.1 233.1
b. Reconciliation of investing net revenue
GROUP
2024
£m
2023
£m
Investing revenue (note 4) 45.7 55.7
Investing introducing partner commissions (note 3) (11.7) (17. 8)
Investing net revenue 34.0 37.9
c. Reconciliation of interest income
GROUP
2024
£m
2023
£m
Interest income on own funds 11.2 4.7
Income on client funds 23.8 9.2
Interest income 35.0 13.9
d. Reconciliation of net operating income
GROUP
2024
£m
2023
£m
Trading net revenue (a) 259.1 233.1
Investing net revenue (b) 34.0 37.9
Interest income (c) 35.0 13.9
Other revenue (note 4) 4.7 3.5
Net operating income 332.8 288.4
Reconciliation of trading revenue per client
GROUP 2024 2023
Trading net revenue - £m (a) 259.1 233.1
Trading active clients (e) 55,294 58,737
Trading revenue per client - £ (a/e) 4,685 3,968
Reconciliation of non-statutory summary Group balance sheet to primary statements
Fixed assets
GROUP
March 2024
£’000
March 2023
£’000
Intangible assets (note 12) 28,906 35,342
Property, plant and equipment (note 13) 28,546 22,771
Lease liabilities (note 23) (16,915) (11,818)
Lease debtors presented within other debtors presented (note 16) 548 392
Fixed assets 41,085 46,687
Fixed assets (rounded to £m) 41.1 46.7
Appendices
180 – CMC Markets plc
Annual Report and Financial Statements 2024
Working capital
GROUP
March 2024
£’000
March 2023
£’000
Trade and other receivables (note 16) 164,809 133,282
Lease debtors presented within fixed assets above (548) (392)
Derivative financial instruments – client CFD positions (note 17) 24,553 11,092
Trade and other payables (note 21) (272,811) (182,284)
Provisions (note 24) (4,194) (2,902)
Title transfer funds¹ 119,591 49,409
Working capital 31,400 8,205
Working capital (rounded up to £m) 31.4 8.2
1 Amounts deducted from “own funds”.
Deferred tax net asset
GROUP
March 2024
£’000
March 2023
£’000
Deferred tax assets (note 14) 6,177 4,768
Deferred tax liabilities (note 14) (3,244) (4,012)
Deferred tax net asset 2,933 756
Deferred tax net asset (rounded to £m) 2.9 0.8
Net tax receivable / (payable)
GROUP
March 2024
£’000
March 2023
£’000
Current tax receivable 1,917 9,066
Current tax payable (2,147) (431)
Net tax receivable / (payable) (230) 8,635
Net tax receivable / (payable) (rounded to £m) (0.2) 8.6
Reconciliation of adjusted operating expenses to primary statements
GROUP
March 2024
£’000
March 2023
£’000
Operating expenses (note 5) 254.9 233.5
Impairment of intangible assets (note 12) 12.3 0.4
Adjusted operating expenses including variable remuneration 267. 2 233.9
Less: variable remuneration (17.7) (16.7)
Adjusted operating expenses excluding variable remuneration 249.5 217. 2
CMC Markets plc’s commitment to environmental issues is reflected in
this Annual Report, which has been printed on Magno Volume and Symbol
Matt Plus, FSC® certified materials. This document was printed by Park
Communications using its environmental print technology, which minimises
the impact of printing on the environment, with 99% of dry waste diverted from
landfill. Both the printer and the paper mill are registered to ISO 14001.
CBP025523
CMC Markets plc
133 Houndsditch
London EC3A 7BX
United Kingdom
T: +44 (0)20 7170 8200
E: info@cmcmarkets.com
www.cmcmarketsplc.com
CMC Markets plc Annual Report and Financial Statements 2024