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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Ig Group Holdings Plc | LSE:IGG | London | Ordinary Share | GB00B06QFB75 | ORD 0.005P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -7.50 | -1.02% | 728.50 | 728.00 | 729.00 | 740.00 | 720.00 | 728.50 | 608,705 | 16:35:20 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Commodity Brokers & Dealers | 1.02B | 365.4M | 0.9530 | 7.65 | 2.8B |
From Apr 2019 to Apr 2024
TIDMIGG
RNS Number : 6994G
IG Group Holdings plc
09 August 2016
IG Group Holdings plc
9 August 2016
Annual Report and Accounts 2016
IG Group Holdings Plc ("the Company"), a global leader in online trading, announces that its Annual Report and Accounts for the year ended 31 May 2016 ("Annual Report") has been published on the Company's website www.iggroup.com.
In compliance with Listing Rule 9.6.1, the Annual Report has been submitted to the National Storage Mechanism and will shortly be available for inspection at:
www.Hemscott.com/nsm.do
Printed copies of the Annual Report will be posted to those shareholders who have requested it on 19 August 2016.
Additional information
In compliance with DTR 6.3.5, the following information is extracted from the Company's 2016 Annual Report and Accounts (page references are to pages in the Annual Report) and should be read in conjunction with the Company's Full Year 2016 results announcement issued on 19 July 2016 which can be found at www.iggroup.com. Together these constitute the information required by DTR.6.3.5 to be communicated to the media in unedited full text through a Regulatory Information Service. This information is not a substitute for reading the Company's 2016 Annual Report and Accounts in full.
The principal risks set out below are extracted from pages 46 to 53 of the 2016 Annual Report and Accounts and are repeated here solely for the purpose of complying with DTR 6.3.5.
PRINCIPAL RISKS
The Directors have carried out a robust assessment of the principal risks facing the Company. This is a continual process particularly in the regulatory environment under which we operate. We prepare an ICAAP, ILAA and Recovery and Resolution Plan each year all of which focus on the risks we face, stress-testing of our business model and projections to ensure the business is solvent, liquid and viable. Our principal risks and the mitigation actions taken are detailed below:
Hot Features
Premium
Key Risk Mitigating actions
------------------------------------- --------------------------------------------------------------
REGULATORY RISK
------------------------------------- --------------------------------------------------------------
Regulatory risk is one
of our most significant * We engage with regulators and policymakers in the
risks and we look at jurisdictions we operate or intend to expand our
it from three different product offering into, as part of policy
angles: consultations and by investing in public relations
programmes ensuring we have access to up-to-date
Change risk information on regulatory change.
is the risk that one
of our regulators introduces
new regulations or the * We participate in discussions with regulators that
regulatory environment are considering changing their regulations in order
itself changes impacting to allow retail derivative trading.
on the way we operate
our business.
* Our compliance, legal and risk teams provide a robust
Expansion risk line of defence, ensuring that our processes and
is the risk that policy controls are effective in ensuring compliance with
and regulation in jurisdictions regulatory obligations.
where we do not currently
operate remain onerous
and closed to our business * We work closely with our regulators to ensure that we
model. operate to the highest regulatory standards and can
adapt quickly to regulatory change.
Breach risk
is the risk that we breach
a regulation that applies * We are committed to engaging proactively with
to our business, leading regulators and industry bodies, continuing to support
to a client or market changes which promote protection for clients and
detriment, sanctions, greater clarity of the risks they face.
fines, reputational damage
or, in extreme situations,
loss of license.
------------------------------------- --------------------------------------------------------------
OPERATIONAL AND INFORMATION
TECHNOLOGY (IT) RISK
------------------------------------- --------------------------------------------------------------
This is the risk of financial
loss, disruption or damage * We have designed and implemented a system of internal
to our reputation due controls to manage operational risk in line with the
to inadequate or failed Risk Appetite Statement and Risk Management
internal processes and Framework.
IT systems.
These risks can also * We run a complete disaster recovery solution to
arise from human error ensure we provide clients with a consistent and
or external events that uninterrupted level of service.
we cannot influence.
Cyber risk is a constant * We operate a fully functional secondary site with
threat in the modern real-time replication of all systems across the two
online environment. locations and fully independent power supplies. We
support these systems with on-going business
The reliability of our continuity planning and regular testing.
client trading platforms
is key to delivering
our strategy. * We invest significantly in the technology
infrastructure to ensure that these platforms are
operationally stable, with system access being
centrally controlled.
* Our investment supports the resilience and
reliability of the platform, ensuring low levels of
latency, maintaining and testing system capability
under significant load and conducting penetration
testing.
* The Executive Risk Committee reviews our Key Risk
Indicators on a monthly basis, a process which
includes monitoring levels of core system uptime and
deal latency.
* We have a dedicated team which has implemented a
robust, multi-layered system, providing
round-the-clock monitoring and intruder-prevention
controls.
------------------------------------- --------------------------------------------------------------
MARKET RISK
------------------------------------- --------------------------------------------------------------
This is the risk that
the fair value of financial * This is managed on a real-time basis, monitoring all
assets and financial client positions against market risk limits set by
liabilities will change the Board for 'operational efficiency'.
due to movements in market
prices.
* We hedge most of our residual market risk exposure,
IG takes market risk not taking proprietary positions based on an
in order to facilitate expectation of market movements. However, not all net
real-time client dealing client exposures are hedged and therefore the Group
and as such, taking market may have a residual net position in any of the
risk is inherent to delivering financial markets in which it offers products up to
quality service to clients. the market risk limit.
* We invest in technology that enables real-time and
constant monitoring of our market exposure. If
exposures exceed our pre-agreed limits, our
risk-management policy requires the positions hedged
to bring the exposure back into line with these
limits.
------------------------------------- --------------------------------------------------------------
CREDIT RISK
------------------------------------- --------------------------------------------------------------
This is the risk that Financial institutions credit risk
a counterparty fails * All financial institutions are subject to ongoing
to perform its obligations, credit review.
resulting in financial
loss to the Group. The
principal sources of * Exposure limits are set and approved by the Executive
credit risk are from Risk Committee.
financial institutions
and individual clients.
* We regularly monitor key metrics, including balances
Individual client credit held and changes in short-term and long-term credit
risk can arise where ratings.
there are significant,
sudden movements in the
market, due to high general Individual client credit risk
market volatility or * Only clients that pass certain suitability criteria
specific volatility relating are accepted.
to an instrument in which
the client has an open
position. This can lead * We run training programmes to educate clients in
to a client's deposited aspects of trading and risk management, as well as
funds being insufficient encouraging them to collateralise their accounts to
to cover trading losses. an appropriate level.
* We conduct a pre-deal credit check on every client
order.
* We operate a number of risk management tools for
clients to manage their exposures, including:
guaranteed and non-guaranteed stops, limit orders,
extended trading hours, trading via mobile platforms.
* Our overall credit risk exposure is managed through
real-time monitoring of client positions via our
'close-out monitor' (COM) and through the use of
tiered margining.
* The COM is an automated process whereby accounts
which have fallen below the liquidation threshold are
automatically identified and closed.
* We only grant credit against unrealised losses for a
very small number of generally long-standing clients,
with credit terms such that any losses arising are
payable immediately on the closure of transactions.
------------------------------------- --------------------------------------------------------------
COMPETITOR RISK
------------------------------------- --------------------------------------------------------------
This is the risk that
the market proposition * We recognise that we operate in a highly competitive
of our competitors is industry and the emergence of smaller firms domiciled
more compelling, leading in less regulated environments brings a variety of
to a loss of clients risks.
and revenue for the Group.
Additionally, this is
a risk that the actions * We continuously monitor our competitor activity,
of our competitors affects pricing and operations including through Investment
the way that our regulators Trends surveys.
view our industry.
* We monitor the potential impact of key innovation
from our competitors as well as poor competitor
activity which may have consequences with our
regulators.
------------------------------------- --------------------------------------------------------------
LIQUIDITY RISK
------------------------------------- --------------------------------------------------------------
This is the risk that
we will be unable to * Due to the very short-term nature of our financial
meet payment obligations assets and liabilities, we do not have any material
as they fall due. mismatches in our liquidity maturity profiles.
Short-term liquidity 'gaps' can arise, due to our
commitment to segregate all client funds.
* Total available liquidity is monitored on a daily
basis, including the committed unsecured banking
facilities.
* Daily stress tests are carried out and the level of
committed unsecured bank facilities is validated by
stress testing our three year liquidity forecast.
------------------------------------- --------------------------------------------------------------
CONDUCT RISK
------------------------------------- --------------------------------------------------------------
This is the risk that
the Group's conduct poses * Our Group conduct risk strategy puts consumer and
to the achievement of market outcomes at the heart of the business. All
fair outcomes for consumers client calls are recorded and our compliance team
or to the sound, stable, monitor these on a regular basis.
resilient and transparent
operation of the financial
markets. * Training is being rolled out to fully embed the
conduct risk strategy into the current business
practices and culture of the Group.
* We evaluate suitability and only offer access to
products where knowledge and wealth considerations
have been evaluated.
------------------------------------- --------------------------------------------------------------
REPUTATIONAL RISK
------------------------------------- --------------------------------------------------------------
This is the risk of damage
to the perception of * We actively monitor steps and changes being made by
the Group by public opinion, regulators and the industry ensuring that the Group
its customers, investors remains compliant. This includes ongoing training for
or any other interested all employees.
party.
* We have a dedicated investor relation team dealing
with shareholders, journalists and the members of the
public on all matters that may affect the reputation
of the Group.
* We continue to embed a culture and tone from the top
of doing the right thing for our clients, our staff
and our industry.
------------------------------------- --------------------------------------------------------------
PEOPLE RISK
------------------------------------- --------------------------------------------------------------
This is the risk that
the Group has an incorrect * We regularly review the Group's resource requirements,
level and mix of people talent mapping and succession planning including the
to execute its business most appropriate locations to deploy our staff.
strategy, combined with
the inability to attract,
develop, motivate and * We operate a remuneration system which is linked to
retain talented employees. revenue performance and a bi-annual appraisal system
to provide regular assessment of individual
performance and identification of training and
development needs.
* Benchmarking of remuneration packages of all
employees is undertaken annually.
* The Group invites all employees to participate in the
annual employee survey to gauge employees'
satisfaction and feedback on improvements.
* We continue to invest in the development of our
people with tailored training to meet their needs.
------------------------------------- --------------------------------------------------------------
REGULATORY CHANGE RISKS
As the regulatory environment continues to evolve, there are a number of events, policy initiatives and proposals in development that may impact or have already impacted our sector as described below.
CHANGE AND IMPACT ON GROUP IMPACT STATUS AND MITIGATING
LEVEL ACTIONS
------------------------------------------------ ------- ---------------------------
UK/EU Referendum - a change to the High We expect there
UK's membership in the European to be a period
Union: The Group's business in continental before any changes
Europe is offered pursuant to the are effective,
EU passporting regime for financial that will allow
services. On 23 June 2016, the UK for alternative
elected for the UK to leave the options to be
European Union. Any change to the considered and
UK's membership status of the European implemented.
Union could have an impact on how We continue to
the Group is able to operate in monitor
the European Union. developments
carefully.
------------------------------------------------ ------- ---------------------------
ESMA committee on speculative products: Medium We have expended
A committee of the European regulator significant efforts
ESMA (European Securities and Markets throughout the
Authority) has been established year to understand
to consider the marketing and selling the many stakeholders'
of speculative products (CFDs, forex interests. We
and binaries) to retail clients continue to monitor
across the European Union under developments
MiFID (Markets in Financial Instruments carefully.
Directive). The intention of the
committee is to ensure that there
is regulatory convergence across
the European Union. Guidelines on
the marketing and selling of speculative
products have been issued and we
expect further clarifying practices
to be issued. We do not consider
that our interpretation of MiFID
and its requirements is materially
different to ESMA's interpretation.
However, any material change in
interpretation or the introduction
of any new requirements by ESMA
in relation to how our industry
should market or sell its products
across the European Union may have
a material impact on our European
business.
------------------------------------------------ ------- ---------------------------
French marketing restrictions and Medium We have expended
Belgian marketing and product restrictions: significant efforts
In France, there are proposed measures throughout the
that would restrict the ability year to understand
for our products to be advertised the many stakeholders'
electronically to retail clients. interests. We
A proposed law has been submitted continue to monitor
for consideration and the impact developments
will depend on whether the measures carefully.
are introduced and, if so, the form
in which they are introduced.
In Belgium, a regulation has been
passed, but is yet to be approved,
restricting the types of products
that can be offered to retail clients
and marketing practices in relation
to those products. We believe the
proposed restrictions are aimed
at providers with a presence in
Belgium and therefore will not impact
our business.
------------------------------------------------ ------- ---------------------------
Financial Transactions Tax (FTT) Medium We continue to
in the European Union: The Enhanced monitor developments
Cooperation FTT effort, involving carefully.
10 of the 28 member states, has
continued this year. It remains
unclear what the ultimate outcome
of the Enhanced Cooperation FTT
will be. Progress to this point
has been extremely slow. There remains
the political will within a group
of member states for the introduction
of an Enhanced Cooperation FTT,
although this group has decreased
in number since last year. The lack
of detail makes the potential impact
on our revenue from Europe difficult
to assess.
------------------------------------------------ ------- ---------------------------
Markets in Financial Instruments Medium We continue to
II Directive (MiFID II): The MiFID monitor MiFID
II dossier has continued to develop II carefully
this year. The MiFID II and Markets and to take part
in Financial Investments Regulation in industry consultations
(MiFIR) Level One texts have been where appropriate.
adopted and the majority of the
detailed Level Two texts will be
finalised shortly. The application
of MiFID II will be delayed by one
year from January 2017 to January
2018. MiFID II provides new powers
to regulators to intervene in certain
circumstances and prohibit or restrict
the marketing, distribution or sale
of financial products. The exercise
of these powers in relation to our
products by a regulator would have
a negative impact on our business.
Other than the potential exercise
of these powers, we remain of the
view that MiFID II is unlikely to
pose a threat to our UK and European
businesses.
------------------------------------------------ ------- ---------------------------
European Markets Infrastructure Low The remaining
Regulation (EMIR): The main impact rules are close
of this legislation on our business to being finalised.
is increased reporting requirements The risk mitigation
to trade repositories. In the medium-to-longer measures are
term the risk mitigation measures not expected
for over the counter trading will to impact us
increase slightly IG's margin requirements until September
with some of our hedging brokers. 2020.
------------------------------------------------ ------- ---------------------------
Packaged Retail and Insurance Based Low We are putting
Investments Products Regulation together a Key
(PRIIPS): This will impose an obligation Investor Information
on us from January 2017 to provide Document ("KIID")
our UK and European clients with which will be
information about our products in provided to UK
a standardised form. We do not anticipate and European
this having a negative impact on clients from
our business. January 2017.
------------------------------------------------ ------- ---------------------------
Capital Requirements Directive IV Low We have modelled
(CRD IV) and Capital Requirements the impact of
Regulation (CRR): The European Union these changes
began implementing these rules from through to full
1 January 2014 and further requirements implementation
are to be introduced in the coming of requirements
years. The most significant changes in 2020 and do
for IG relate to changes in capital not expect any
requirements and liquidity requirements significant impact
that are being phased in. There to our capital
are also new corporate governance or liquidity
and remuneration obligations that positions.
are not expected to have a significant
impact.
------------------------------------------------ ------- ---------------------------
Monetary Authority of Singapore Low We believe that
(MAS) regulatory framework for margined the majority
derivatives: As previously reported, of IG's revenue
in 2013 the MAS confirmed that it currently comes
would push forward with its proposal from clients
to increase margin requirements who would qualify
for non-accredited investors on for accredited
a forex trade from 2% to 5%, thereby investor status.
reducing leverage from 50 times In addition,
to 20 times. Although these rules the use of guaranteed
have not yet been introduced, we stops enables
consider there is a good possibility clients to further
they will be introduced in the future. manage leverage
If introduced, it is intended that levels.
the rules will not apply to accredited
investors, defined by virtue of
their wealth or income level.
------------------------------------------------ ------- ---------------------------
Base Erosion and Profit Shifting Low We will continue (BEPS): The Organisation for Economic to monitor the Cooperation and Development (OECD) impact of the has developed proposals to address implementation perceived international tax avoidance of the BEPS proposals by high profile multinationals. in countries The final proposals for each focus where we operate. area of the BEPS action plan have been agreed. Countries will now implement the proposals and have agreed to continue work on BEPS until 2020. None of the action plans are expected to significantly impact the Group's tax profile. ------------------------------------------------ ------- ---------------------------
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The following responsibility statement is extracted from the Statement of Directors' Responsibilities on page 101 of the 2016 Annual Report and Accounts and is repeated here solely for the purpose of complying with DTR 6.3.5. The statement relates to the full 2016 Annual Report and Accounts and not the extracted information presented in this announcement or the Full Year Results announcement.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report, the Directors' Remuneration Report and the Financial Statements in accordance with applicable law and regulations.
The Companies Act 2006 requires the Directors to prepare Financial Statements for each financial year. Under this law, the Directors have prepared the Group and parent company Financial Statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union.
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 affairs of the Group and the Company, and of the Group's profit or loss for that financial year. In preparing these Financial Statements, the Directors are required to:
-- Select suitable accounting policies and apply them consistently -- Make judgements and accounting estimates that are reasonable and prudent
-- State whether applicable IFRSs as adopted by the European Union and IFRSs issued by the IASB have been followed, subject to any material departures disclosed and explained in the Financial Statements
-- Prepare the Financial Statements on a going-concern basis, unless it is inappropriate to presume that the Company will continue in business.
Legislation in the United Kingdom governing the preparation and dissemination of Financial Statements may differ from legislation in other jurisdictions.
The Directors are responsible for ensuring that the Group and the Company keeps adequate accounting records. These records must be sufficient to show and explain the Group and the Company's transactions and disclose the financial position of the Group and the Company with reasonable accuracy at any time. They must also enable the Directors to ensure that the Financial Statements and the Directors' Remuneration Report comply with the Companies Act 2006 and, as regards the Group Financial Statements, Article 4 of the IAS Regulation.
The Directors are responsible for safeguarding the assets of the Group and the Company, and for taking reasonable steps to prevent and detect fraud and other irregularities.
The maintenance and integrity of the Group's website is also the Directors' responsibility.
RESPONSIBILITY STATEMENT
It is the Directors' opinion that the Annual Report and Accounts, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Group and the Company's performance, business model and strategy.
Each of the Directors, whose names and functions are listed in the Corporate Governance Report, confirms that, to the best of their knowledge:
-- The Financial Statements, which have been prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit of the Group and the Company and the undertakings included in the consolidation taken as a whole
-- The Strategic Report and the Directors' Report included within this Annual Report provide a fair review of the business's development and performance, the Group and the Company's position and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that the Group and the Company face.
On behalf of the Board:
Peter Hetherington
Chief Executive Officer
19 July 2016
End
For further information, please contact:
IG Group
Kieran McKinney
Head of Investor Relations 020 7573 0026
FTI Consulting
Neil Doyle / Ed Berry 020 3727 1141 / 1046
IG is a global leader in online trading, providing fast and flexible access to over 10,000 financial markets - including shares, indices, forex, commodities and binaries.
Established in 1974 as the world's first financial spread betting firm, IG's aim is to become the default choice for active traders globally. It is an award-winning multi-platform trading company, the world's No.1 provider of CFDs* and a global leader in forex, and it now offers an execution-only stockbroking service in the UK, Australia, Ireland, Germany, Austria and the Netherlands.
It is a member of the FTSE 250, with offices across Europe, Africa, Asia-Pacific, the Middle East and the US, where it offers limited risk derivatives contracts via the Nadex brand.
*Based on revenue excluding FX, published financial statements, September 2015.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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August 09, 2016 08:47 ET (12:47 GMT)
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