IG Group Eyeing German Subsidiary in Near Future

IG Group, a UK-based Online Trading Online Trading Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone Read this Term firm, has reported an increase of 29 percent in pre-tax profit for H1, FY18, amounting to £136.2 million (roughly $190 million). Net trading revenue during this period increased 10 percent to £268.4 million, while operating expenses (excluding variable remuneration), dropped 7 percent to £117.6 million. Moreover, the Diluted EPS showed a climb of 30 percent to 29.3 pence, with an interim dividend of 9.69 pence per share.

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Peter Hetherington, Chief Executive of IG Group, commented on the newly released figures: "The Company delivered record revenue and record profit before tax during the first half of FY18, and continued to make good strategic and operational progress. The Group is taking action to mitigate the potential financial impact of regulatory change, and to position the business so that it will continue to deliver for all of its stakeholders under a more restrictive regulatory environment."

Next Stop: Germany?

As IG Group continues to prepare for various changes in the upcoming year, the company has announced its intentions to open a subsidiary in Germany in the near future. The decision to enter Germany is directly attributed to the Brexit Brexit Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum. In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades.The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019. Active Prime Minis Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum. In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades.The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019. Active Prime Minis Read this Term vote, and the company is preparing for its future course, prior to its implementation.

Many banks and other financial institutions have already left the UK for alternative markets. Several industry leaders have similarly looked to Germany as their choice, following the Brexit decision. Goldman Sachs, Morgan Stanley, and Citi have already chosen Frankfurt as their new EU headquarters. Additionally, JP Morgan has eyed Paris to replace its UK offices.

IG Group has stated its plans to launch new products and services to retail investors, as well as to expand operations to new markets, in an effort to increase its client base. The company has also indicated that it is taking action to adjust to changes in the regulatory framework, which will undoubtedly impact the company’s operations. Over the past few years, regulators have tightened restrictions, in an effort to ensure the protection of the interests of retail and institutional investors alike.

IG Adjusts to Regulation Changes

Earlier this month, the FCA displayed concerns over the lack of adherence to regulatory confinements from various brokerages. In a letter assessing its analysis of 19 CFD trading firms, the FCA concluded that 76 percent of clients lost funds between July 2015 and June 2016. Moreover, the UK regulatory watchdog expressed concern regarding the methodology which these companies’ IBs were employing when communicating with clients, which does not comply with the regulations in place within the UK.

In response to the FCA findings and corresponding letter, IG issued a statement to address its stance in alliance with the regulator: “IG does not offer advisory or discretionary services for CFD products and has terminated its very small number of relationships with distributors who offer our CFD product on a discretionary or advisory basis to retail clients within the UK and EU.”