Business
Response to ASIC consultation paper
Response to ASIC consultation paper.
About this update from Cmc Markets Plc
[{"type":"text","content":"\n \nRNS Number : 9455J CMC Markets Plc 22 August 2019 \n\n22 August 2019\nCMC Markets Plc\nResponse to ASIC consultation paper and update on current trading\n \nCMC Markets plc (\"CMC\") notes the announcement by the Australian Securities and Investments Commission (\"ASIC\") issued today regarding a consultation on the application of product intervention powers on the issuance and distribution of binary options and contracts for difference to retail clients.\nIn its consultation paper, ASIC are seeking industry comment on the proposed introduction of regulatory changes, covering binary options, leverage ratio limits, margin close-out, negative balance protection, inducements and disclosure. The changes proposed are similar to that already implemented in other jurisdictions, including ESMA. ASIC is required to consult with the industry before making a product intervention order. Any product intervention order which ASIC makes is only effective for up to an initial period of 18 months.\nFair outcomes for clients have always been a focus for CMC. Benefitting from its proprietary technology and focus on targeting higher valued experienced clients, CMC is well prepared to respond quickly and manage any regulatory changes as required. \nCMC noted in its Q1 Trading Update on 25 July 2019 that the imposition of limits by ESMA had resulted in a period of transition, where clients adjusted their trading behaviour to the new environment and CMC adjusted its model accordingly. Following the stabilisation noted in the Q1 update, the Board is pleased to see that net operating income has performed strongly through the summer.\nAustralia is an important part of CMC's balanced and diverse portfolio of regions and products, with a large non-leveraged stockbroking business and a leveraged CFD business aimed at more sophisticated investors. In the last financial year ended 31 March 2019, the Australian business as a whole represented 31% of the Group's net operating income. Within that, CFD net revenue constituted 20% of Group CFD (and Spread bet) net revenue and 17% of the Group's net operating income.\nCMC values regular and transparent dialogue with regulators. Key to this dialogue is CMC's belief in a consistent approach to regulation, a level playing field, and raising standards in the industry. CMC will continue to engage with AS...