CMC Markets

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CMC Markets
Public Limited Company
Traded as LSE: CMCX
Industry Financial Services, Online Forex trading, CFDs, spread betting, shares trading
Founded 1989 (1989)
Founder Peter Cruddas
Headquarters London, United Kingdom
Area served
 Worldwide
Key people
 Peter Cruddas (Founder/Chief Executive)
Simon Waugh (Non-Executive Chairman)
Grant Foley (Chief Financial Officer)
Services Online trading, CFDs and spread betting
Increase £143.6m (2015)[1]
Increase £51.9m (2015)[1]
Number of employees
 550 worldwide (2015)[2]
Website www.cmcmarkets.com

CMC Markets is a UK-based financial derivatives dealer. The company offers online trading in spread betting, contracts for difference (CFDs) and foreign exchange (forex) across world markets.[3] CMC is headquartered in London, with hubs in Sydney and Singapore and a further 11 offices internationally.[1]

History

1989-2000: Early years

The company was founded in 1989 by Peter Cruddas as a Foreign Exchange market maker under the name 'Currency Management Corporation'. The name was later abbreviated to CMC and then changed to CMC Markets in September 2005.

In 1992, CMC Markets became authorised and regulated in the UK by the AFBD which later became the Financial Services Authority (FSA).

In 1996, the company launched a real-time FX trading platform and has made claims to have done the first FX deal on-line over the internet. Although not verifiable, CMC Markets was certainly one of the first companies to offer on-line trading over the internet. The company pioneered internet trading technology with its MarketMaker software platform.

The software was developed by Information Internet Limited, a sister company jointly owned by Peter Cruddas and the two developers that designed and built the first version of the software, Terry Johnston and Ben Fisher. From 1996 to 2000 Information Internet Limited, as well as supplying CMC Markets, sold the software to a small number of banks. In 2000 Peter Cruddas bought out the other owners, made the software exclusive to CMC Markets and the remaining parts of Information Internet Limited became the internal IT function of CMC Markets.

2000: Introduction of CFDs and spread betting

In 2000, CMC Markets began to offer contracts for difference (CFDs) and the following year it introduced online spread betting on financial markets. These two products would become the bulk of the business for CMC Markets.

2002-2006: Global expansion

In 2002 the company began embarking on a major global expansion drive. It expanded quickly between 2002 and 2007 and opened offices in a large number of countries, as well as growing the spread betting business in the UK and the CFD business internationally. This began with its first overseas office in Sydney, Australia, with a number of other offices following in next few years including Beijing, Hong Kong, Frankfurt in 2005, Auckland in 2006 and Stockholm in 2007.

The first North American office was opened in 2003 in New York. This was followed by the acquisition of Canadian broker Shorecan Index, which became its Toronto office in 2005. CMC Markets subsequently pulled out of the US market and closed its New York office in 2008, which was primarily because it was unable to offer its main CFD and spread betting products there due to regulatory restrictions.

From 2001-2005, CMC Markets also operated the brand name deal4free.com. This brand was designed to promote the zero commission charge service, used primarily for its UK-based spread betting business. Commissions were later re-introduced and this brand was dropped as part of the re-branding in September 2005.[4]

In 2006 Cruddas planned to IPO the company, however this was cancelled at the last minute with Cruddas citing market conditions.[5][6]

2007: M&A activity

CMC Markets acquired financial media and technology company Digital Look,[7] which ran the financial information site www.digitallook.com, as well as selling financial data to third party sites. The company was merged into CMC Markets' main operations in London, but continued to run the website and data services for third parties. Subsequently CMC Markets bought the Australian stock broker, Andrew West. This was merged with the CMC Markets Australian operation and renamed CMC Markets StockBroking. This continued to offer physical share broking services in Australia.

Later in 2007, Goldman Sachs bought a 10% stake in the company for £140m, effectively valuing the company at £1.4bn.[8]

2008-2013: Global financial crisis

In 2008 and 2009, CMC Markets saw profits decline with the global financial crisis. In response Peter Cruddas changed his management team and closed seven offices as well as reducing the company headcount from a high of 1100 employees.[9]

In 2010, CMC Markets launched its Next Generation trading platform[10][11] to the UK market. The new trading software improved on previous MarketMaker software; amongst other things being able to quote market prices to additional decimal points and provide trade execution without re-quotes.

In 2011 the Digital Look business unit was sold to the Spanish-based Web Financial Group.[12]

2014 onwards

After a return to profits in 2014 speculation emerged that CMC Markets was again looking at an IPO.[13][14]

In 2015 the company increased its profits and in early 2016 the company announced it would proceed with an initial public offering.[1][15]

On the 5th February 2016 CMC Markets listed on the London Stock Exchange at 240p equating to an initial market capitalisation of £691M.[16] On the 25th April 2016 CMC Markets launched a range of binary products specifically designed for mobile, tablet and desktop. [17]

Operations

International presence

CMC Markets operates and has offices in the UK, Australia, Germany, New Zealand, Singapore, Spain, Italy, Sweden, Norway, France, Poland, Austria and Canada. Most operations are run from its head office in London and runs a trading desk in London and in Sydney.

Regulation

Its primary regulator is the UK's Financial Conduct Authority, but it is also regulated in other countries where there is an office.[18] CMC's Tier 1 regulatory capital ratio of 18.6% (2014) surpasses that of major banks and investment banks.

Market position

CMC Markets is one of the companies that launched CFD products to the retail market in 2000 and is one of the major CFD providers. No reliable data exists for the over-the-counter CFD and spread betting industry. However, in 2009 some industry participants commissioned a survey to look at the UK market and results indicated that CMC Markets market share in 2008 was lower than its main competitor.[19]

References

  1. ↑ 1.0 1.1 1.2 1.3 Lua error in package.lua at line 80: module 'strict' not found.
  2. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  3. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  4. ↑ CMC Group announces rebranding
  5. ↑ Volatile market conditions force CMC to pull float
  6. ↑ Peter Cruddas prepares for CMC flotation
  7. ↑ Cruddas appointments bolster CMC board
  8. ↑ Goldmans buys 10% stake in CMC Markets
  9. ↑ Peter Cruddas has taken CMC Markets back to basics
  10. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  11. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  12. ↑ Web Financial Group Press Release
  13. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  14. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  15. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  16. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  17. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  18. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  19. ↑ Investors switch between spread betting providers

External links

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