CMC Markets’ shares fell three per cent this morning after the company said it was difficult to anticipate how much of an impact regulatory changes will have on the business.
The spreadbetting giant made clear last month that it will consider moving its headquarters out of London if the Financial Conduct Authority (FCA) pushes ahead with a clampdown on the industry.
“The group believes that as one of the longest-established providers in the industry, with a focus on higher-value, experienced clients and client service, that it is well placed to deal with these changes in the competitive landscape,” CMC said in a statement today.
“As the group enters the final quarter of the financial year, it is not possible to determine whether the recent uplift in client activity that we have seen will be sustained. However, operating costs continue to be well controlled and in-line with guidance.”
Authorities in Germany and France have recently followed the FCA in laying out plans to crack down on selling contract for difference (CFDs) products, such as spreadbets for retail customers.
CMC’s share price plunged nearly 40 per cent, from 184p to 115p, after the FCA announced its plans for an assault of CFDs. And shares have failed to recover since, closing at 114p on Wednesday and falling a further three per cent to 111p on Thursday.
Chief executive Peter Cruddas was upbeat. “The regulatory changes that will be implemented later in the year will undoubtedly present the group with some short- to medium-term challenges as clients and the industry adjust,” he said.
“However, as a well-capitalised and established business with 14 offices globally, a strong institutional offering and a business model that is focused on experienced clients, I believe that in the longer term the group’s competitive position will be strengthened compared to competitors whose business model is more focused towards inexperienced clients.”
He added: “The sector will clearly continue to be challenging while the structure and timings of the regulatory changes are confirmed.
“However, we believe our business is well able to adapt and we look forward to continuing our successful development within the new regulatory framework.”