CMC Markets


CMC Markets
CMC Markets
Type Private (Peter Cruddas and family 86%, Goldman Sachs 10%)
Industry Financial Services
Founded London, UK (1986 (1986))
Founder(s) Peter Cruddas
Headquarters London, UK
Key people Peter Cruddas(Founder/Chairman), Doug Richards CEO
Services On-line trading, CFDs and Spread Betting
Revenue £193.2m (2009), increase 7% from 2008
Operating income £25.3m (2009), decrease 57% from 2008
Net income £-15.4m (2009), decrease 138% from 2008
Total assets £89.7m (2009), decrease 13% from 2008
Employees 678 (2011), decrease was 720 in 2010
Website www.cmcmarkets.com

CMC Markets is a UK based financial derivatives dealer. The company offers online trading in spread betting, Contract for difference (CFDs) and Foreign Exchange (Forex) across world markets. While large part of its activity is in the UK, Europe and Australia, it has presence internationally.

Contents

History

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.

CMC Markets also operated the brand name deal4free.com from 2001 to 2005. The deal4free brand was designed to promote the zero commission charge service which it used primarily for its spread betting business in the UK. Commissions were later re-introduced and this brand was a dropped as part of the re-branding in September 2005.[1]

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. It is hard to verify, but even if it was not true, CMC Markets was certainly one of the first companies to offer on-line trading over the internet. As well as being a pioneer in 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 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 for CMC Markets and the remaining parts of Information Internet became the internal IT function of CMC Markets.

In 2000, CMC Markets began to offer Contracts for difference (CFDs) and the following year it introduced on-line Spread Betting on financial markets. These two products now make up the bulk of CMC Markets business.

In 2002, CMC Markets opened its first Asian office in Sydney, Australia followed in 2005 by Beijing and Hong Kong.

The first European office was opened in Frankfurt in 2005, followed by Stockholm in 2007 and Madrid in 2008.

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. Primarily as it was unable to offer its main CFD and spread betting products there due to regulatory restrictions.

CMC Markets expanded quickly from 2002 to 2007 and opened offices in a large number of countries as well as growing the spread betting business in the UK and CFDs internationally. It offered services in a number of different languages and was one of the first CFD provider in Australia to offer full Chinese-speaking service. A service they expanded globally.

In 2006 Peter Cruddas planned to float the company and the company had been prepared for IPO.[2][3] However the IPO was cancelled at the last minute with Peter Cruddas citing market conditions.

In 2007 it bought financial media and technology company 'digital look',[4] 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 continues to run the web site and data services for third parties. In 2008 CMC Markets bought the Australian stock broker 'Andrew West', this was merged with the CMC Markets Australian operation and re-named CMC Markets StockBroking. This continues to offer physical share broking services in Australia.

In 2007 Goldman Sachs bought a 10% stake in the company[5] and the due diligence that it did as part of the purchase resulted in a overhaul of the company direction.

In 2008 and 2009 CMC Markets saw profits decline with GFC, in response Peter Cruddas changed his management team, let 350 staff go and closed seven offices.[6]

In 2010, CMC Markets launched its new trading platform[7] and iphone application[8] to the UK market. The new trading software featured a new pricing engine with 100% automated execution, prices quoted to additional decimal points and no re-quotes.

In 2011 the Digital Look business unit was sold to the Spanish based Web Financial Group.[9]

Operations

CMC Markets operates and has offices in the UK, Australia, Germany, New Zealand, Singapore, Spain, Ireland, Italy, Japan, China, Sweden, Norway, Denmark, Austria, France and Canada.

CMC Markets runs most of its operations from its head office in London and runs a trading desk in London and in Singapore.

Competition

CMC Markets is one of the companies that launched CFDs products to the retail market in 2000 and is one of the largest CFD providers globally. Actual market share is difficult to confirm as there is no reliable independent data in the over-the-counter CFD and Spread Betting industry as providers have no duty to report trading volumes or transactions. 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.[10]

References

External links


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