CMC Markets to Start Retail Investment Platform for U.K. Clients

(Bloomberg) -- CMC Markets Plc is building a retail investment platform for U.K. clients as the online broker looks to diversify its business.

The London-based firm is building a “a non-leveraged trading platform for U.K. clients,” it said in a statement that also unveiled annual results in line with analyst estimates.

The plans, reported earlier by Sky News, will see CMC compete with providers such as Hargreaves Lansdown Plc and AJ Bell Plc in offering investment products including ISAs and self-invested personal pensions.

The group said net operating income increased to 410 million pounds ($577 million) in the year through March, up 63% from the previous year. The rise was helped by high trading volumes and market volatility during Covid-19 lockdowns.

CMC currently allows U.K. clients to speculate on the price of securities through derivatives known as contracts for difference. CFD active clients increased by 34% to nearly 77,000 during the year, with each one generating average revenues of 4,560 pounds. The firm has refocused on “ high value, sophisticated, experienced global clients” after regulators across Europe clamped down on leveraged trades for retail customers.

While trading activity has moderated from elevated levels at the beginning of the pandemic, CMC said it believes that its active client levels are likely to be sustainable.

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