TIDMIGG
RNS Number : 4053J
IG Group Holdings plc
15 August 2023
IG Group Holdings plc
L EI No: 2 1 3 8 0 0 3A5Q1 M7 A NOUD 76
15 August 2023
IG Group Holdings plc
(the 'Company')
Publication of Annual Report and Notice of Annual General
Meeting
The Company announces that its 2023 Annual General Meeting will
be held at 13:00 on Wednesday 20 September 2023 at the Company's
registered office, located at Cannon Bridge House, 25 Dowgate Hill,
London, EC4R 2YA.
The following documents will today be distributed to
shareholders:
-- Annual Report and Financial Statements for the year ended 31 May 2023 ('Annual Report'); and
-- Notice of the 2023 Annual General Meeting ('AGM').
In accordance with Listing Rule 9.6.1, copies of the documents
listed above will be submitted to the National Storage Mechanism
and will shortly be available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
The Annual Report and Notice of the AGM are available to view on
the Company's website using the following links:
-- Annual Report: annualreport.iggroup.com/2023
-- Notice of AGM: iggroup.com/investors/shareholder-information/general-meetings
IG Group Investors IG Group FTI Consulting Company Secretariat
Press
Martin Price Angela Warburton Edward Berry / Aurelia Gibbs
/ Simon Wright / Alayna Katherine Bell
Francis
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020 7573 0020 020 7633 07703 330 199 /
/ 0099 5382 / 5395 079 7687 0961 020 7896 0011
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investors@ig.com press@ig.com iggroup.sc@fticonsulting.com cosec@ig.com
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Additional information
The Appendix to this announcement contains information extracted
from the 2023 Annual Report for the purposes of compliance with the
FCA's Disclosure Guidance and Transparency Rules. It should be read
in conjunction with the Company's Full Year 2023 results
announcement issued on 20 July 2023, 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 Annual
Report in full. Page numbers and cross references in the extracted
information refer to page numbers and cross references in the 2023
Annual Report.
About IG
IG Group (LSEG:IGG) is an innovative, global fintech company
that delivers dynamic online trading platforms and a robust
educational ecosystem to power the pursuit of financial freedom for
the ambitious. For nearly five decades, the Company has evolved its
technology, risk management, financial products, content, and
platforms to meet the needs of its retail and institutional
clients. IG Group continues to innovate its offering for the new
generation of tomorrow's investors through its IG, tastytrade, IG
Prime, Spectrum, and DailyFX brands.
Established in 1974, IG Group is a London-headquartered FTSE 250
company offering its clients access to 19,000 financial markets
through its offices spread across Europe, North America, Africa,
Asia-Pacific and the Middle East.
APPIX
The principal risks set out below are extracted from pages 49 to
53 of the Annual Report and are repeated here solely for the
purpose of complying with DTR 6.3.5.
Principal Risks
Risk category Principal risks Mitigation and controls
------------------------- -------------------------- -----------------------------------------------------------
Business Model Risk Market risk -
The risk we face arising trading book and * The inherent conflict in OTC trading, is mitigated at
from the nature of non-trading book IG through the design of our business model, being
our business and (inclusive of based around the internalisation of client trading
business interest rate and hedging of residual exposures more than the
model, including market, risk) predefined Board approved limits. In short, our
credit and liquidity The risk of loss long-term interests align with those of our clients
risks, and capital due to movements
adequacy adherence. in market prices
arising from our * Additionally, our order execution system price
Risk appetite net position in improves client orders where the underlying market
In pursuit of our financial instruments. has moved against them while the order is being
business processed. We operate a real-time market position
goals, we have an monitoring system
appetite
for running modest
levels of market risk * Our scenario-based stress tests are performed on an
to facilitate the hourly basis
high-quality
instant execution of
client orders while * We have predetermined, Board-approved, market risk
accepting that periodic limits
credit risk losses
will occur in normal
business activity. * Our dynamic approach to limit management makes full
We have very little use of highly liquid markets in core hours, reducing
appetite for liquidity in less liquid periods
or regulatory capital
risk and ensure complete
compliance with
regulatory
requirements.
Emerging and evolving
risks
We monitor the emergence
of significant events
or topics which could,
if unmanaged, have
a material impact on
the Group. Such matters
include the war in
Ukraine, trade wars,
political and
legislative
changes and any other
matters which may lead
to macro market
movements.
Where such events or
topics emerge, as a
matter of course we
consider client margin
requirements, market
risk limits, broker
positions, and cash
and capital held at
each individual entity
to ensure we remain
within our risk appetite
as the external
environment
and risks we face
change.
------------------------- -------------------------- -----------------------------------------------------------
Credit risk -
client * Our approach to setting client margin requirements is
The risk that centred on protecting our clients from poor outcomes,
a client fails taking into consideration underlying market
to meet their volatility and liquidity, while simultaneously
obligations to protecting IG from exposure to debt
us, resulting
in a financial
loss. * Client positions are automatically liquidated once
they have insufficient margin on their account - this
not only protects IG against debt, but importantly
protects our clients
* Our client education offering provides information
about robust risk management practices
------------------------- -------------------------- -----------------------------------------------------------
Credit risk -
financial institution * We undertake credit reviews of financial
The risk of loss institutional counterparties upon account opening,
due to the failure which is updated periodically (or ad hoc upon an
of a financial event)
institution counterparty.
* Our credit exposures to each of our broking
counterparties are actively managed in line with
limits
* We perform daily monitoring of counterparties'
creditworthiness
-------------------------- -----------------------------------------------------------
Liquidity
The risk that * Active liquidity management within the Group is
we are unable central to our approach, ensuring sufficient
to meet our financial liquidity is in the right places at the right times
obligations.
* We conduct monthly liquidity stress tests
* We have access to committed unsecured bank facilities
and debt
-------------------------- -----------------------------------------------------------
Capital adequacy
The risk that * We conduct daily monitoring of compliance with all
we hold insufficient regulatory capital requirements. With our ICARA
capital to cover (Internal Capital Adequacy and Risk Assessment), we
our risk exposures. conduct an annual capital and liquidity assessment
including the application of a series of
stress-testing scenarios, based against our financial
projections, all of which is approved by the Board
------------------------- -------------------------- -----------------------------------------------------------
Risk category Principal risks Mitigation and controls
------------------------- ------------------------- ------------------------------------------------------------
Commercial Risk Strategic delivery
The risk that our The risk that * Regular strategy updates to the Board from the
performance our competitive Executive Directors throughout the year detailing the
is affected by adverse position weakens strategic progress of the business
market conditions, or that our profits
failure to adopt an are impacted due
effective business to the failure * External consultation and extensive market research
strategy, or competitors to adopt or implement undertaken in advance of committing to any strategy
offering more attractive an effective business to test and validate a concept
products or services. strategy, including
the risk of failing
to appropriately * Projects managed via a phased investment process,
Risk appetite integrate an acquisition. with regular review periods, to assess performance
There is little appetite and determine if further investment is justified
for activities that
threaten efficient
delivery of any core
initiatives or that
can diminish our
reputation,
although acceptance
of some strategic risk
is necessary to foster
innovation.
Emerging and evolving
risks
We closely monitor
the high-inflationary
environment and the
UK's cost of living
crisis, and their
effects
on client's ability
to trade, supplier
costs, wages, and income
from interest. As a
UK-headquartered firm
we are exposed to FX
rate fluctuations when
transferring funds
between non-UK entities.
------------------------- ------------------------- ------------------------------------------------------------
Financial market
conditions * Review of daily revenue, monthly financial
The risk that information, KPIs and regular reforecasts of expected
our performance financial performance
is affected by
client sensitivity
to adverse market * Forecasts used to determine actions necessary to
conditions, making manage performance and products in different
it harder to recruit geographical locations, with consideration given to
new clients and changes in market conditions
reducing the willingness
of existing clients
to trade. * Regular updates to investors and market analysts to
manage the impact of market conditions on performance
expectations
------------------------- ------------------------- ------------------------------------------------------------
Competitor
We operate in * Our approach to conduct demands we put the client at
a highly competitive the heart of our decision making. We do not engage in
environment and questionable practices, regardless of whether they
seek to mitigate would prove to be commercially attractive to clients
competitor risk
by maintaining
a clear distinction * Ensuring that our product offering remains attractive,
in the market. considering the other benefits that we offer our
This is achieved clients, including brand, strength of technology and
through compelling service quality
and innovative
product development
and quality of
service, all while
closely monitoring
the activity and
performance of
our competitors.
------------------------- ------------------------- ------------------------------------------------------------
Risk category Principal risks Mitigation and controls
--------------------------- -------------------- ------------------------------------------------------------
Conduct and Operational Technology
Risk and information * Maintenance of a 24/7 Incident Management function
The risks that our security
conduct poses to The risk of
the achievement of data loss * Security operations function with 24/7
fair outcomes for or that our strength-in-depth capabilities to monitor, prevent
consumers or the operations and triage cyber threats
financial markets, are affected,
and the risk of loss or clients
resulting from inadequate receive a * DOS mitigation services and 24/7 incident management
or failed internal degraded service capabilities
processes, people, or are unable
systems, or external to trade due
events. to an operational * Regular disaster-recovery capability testing
outage or
system limitations.
Risk appetite Technology * Capacity stress testing
Operational risk threats can
is present in the evolve from
normal course of poor internal * Our Change Management and Quality Assurance functions
business, and it practices undertake risk assessments, utilise defined
is not possible, and systems maintenance windows and help deploy new products and
or even desirable, or from the services
to eliminate all continuously
risks inherent in evolving cyber
our activities. We landscape. * We invest in strength-in-depth capabilities to
have no appetite mitigate the ever-present and changing cyber threats
for poor conduct-related
events.
Emerging and evolving
risks
The cyber threat
landscape continues
to evolve, with cyber
criminals and ransomware
groups constantly
changing and maturing
their attack methods
and targets. The
impact of climate
change poses risks
to business continuity
and, therefore, potential
harm to our clients
and people. Failure
to responsibly manage
our Group emissions
or to mitigate the
risks associated
with climate change
poses reputational
and regulatory risks.
The ongoing energy
crisis in South Africa,
which results in
load-shedding, is
a concern, with proactive
steps taken by the
Group to mitigate
any potential impact
on our clients and
employees.
-------------------- ------------------------------------------------------------
Financial
crime * A mature control framework for identifying and
The risk of reporting on suspicious transactions, which is
failing to designed to protect the integrity of the financial
identify and markets and provide a stable and fair-trading
report financial environment for our clients
crime. Inadequate
oversight
and client * Appropriate onboarding processes for different client
due diligence types and vendors with enhanced due diligence and
can result monitoring processes where appropriate
in clients
attempting
to use us * Segregated duties within processes to ensure adequate
to commit oversight and control over internal fraud
fraud or launder
money, third
parties trying
to access
client or
corporate
funds, or
employees
misappropriating
funds if an
opportunity
arose.
-------------------- ------------------------------------------------------------
Trading issues
The risk related * A 24/7 approach with trading desks located in London
to any issues and Australia providing 24-hour coverage. We apply
around our Board-approved Market Risk Limits and operate under a
internal hedging, robust control framework to mitigate our exposure to
client trading, loss through operational risk events which may impact
and process trading. Our order execution processes not only
for corporate comply with all regulatory requirements, but go over
actions, dividends, and above in filling client orders, on an
and stock asymmetrical basis, providing better than best
transfers. execution
-------------------- ------------------------------------------------------------
Client life
cycle management * Bespoke onboarding processes ensure we only offer
This is the products and services to clients with sufficient
risk related means and a clear understanding of the risks
to issues involved. Regular assessments of services identified
in the client as being critical to clients to ensure their
life cycle operational resiliency. Single points of failure
spanning the identified, and contingency plans set in place
customer agreement,
account set-up,
interactions, * Complete adherence to client money and asset
and appropriateness regulations, taking the highest standard set by the
of account FCA in the UK and applying them worldwide where
types and possible
product offerings.
* The use of KPIs to monitor levels of service provided
and act where needed
* We offer a plethora of high-quality, easily
accessible educational material to ensure clients can
improve their understanding of our products and the
financial markets - supporting their pursuit of
financial freedom
* We monitor for client behaviours which may indicate
levels of vulnerability and proactively engage with
them to minimise poor outcomes
-------------------- ------------------------------------------------------------
Financial
integrity * Our operational risk framework provides the base from
and statutory which our robust control environment reduces
reporting operational risk events from manifesting
issues
The risk of
production * Our automated systems enable us to flex with client
issues which trading volumes
could lead
to untimely,
incomplete, * Dedicated specialist steering committees manage and
or inaccurate oversee niche areas, such as transaction reporting,
Financial financial crime, financial reporting and forecasting,
Statements, climate responsibilities, our Internal ICARA and
transaction Annual Report production
reporting,
tax filing,
regulatory
capital, and
forecasting.
--------------------------- -------------------- ------------------------------------------------------------
Risk category Principal risks Mitigation and controls
------------------------- -------------------------- -----------------------------------------------------------
Regulatory Environment Regulatory risk
Risk The risk of investigation, * Continuous monitoring of operations to ensure they
The risk that we face enforcement, or adhere to regulatory requirements and expected
enhanced regulatory sanction by financial standards
scrutiny with a higher services regulators.
chance of regulatory This may be driven
action, or the risk by internal factors, * Continuous review of all regulatory incidents and
that the regulatory such as the strength breaches with deep dives performed on common themes
environment in any of our control
of the jurisdictions framework or our
in which we currently interpretation, * Policies and procedures are embedded across the Group
operate, or may wish understanding, with a regulatory compliant mindset
to operate, changes or implementation
in a way that has an of relevant regulatory
adverse effect on our requirements. * We operate values to always Champion the Client,
business or operations, This risk can whilst Raising the Bar
through reduction in also arise from
revenue, increases external factors,
in costs, or increases such as the current
in capital and liquidity and changing priorities
requirements. of our regulators'
policy and supervision
Risk appetite departments.
We have no appetite
to breach financial
services regulatory
requirements and we
strive to always comply
with applicable laws
and regulations.
Emerging and evolving
risks
The regulatory landscape
continues to evolve,
and we need to react
and ensure adherence
to incoming regulations
in a timely manner.
Less well-developed
regulatory frameworks,
such as digital assets,
are actively monitored
for any changes where
we may need to adapt
strategic rollouts.
The introduction of
the FCA's Consumer
Duty principle is an
example of how we plan
for change by
identifying
workstreams with owners
who are responsible
for updating steering
committees on progress.
The same approach will
be taken with incoming
DORA1, MiFID/MiFIR2
Review, EMIR3, and
any other regulatory
changes. Many of the
concepts in the FCA's
Consumer Duty, and
other incoming
regulations,
are already practiced
and well-embedded;
and are in line with
our purpose, strategic
drivers, and values
such as being 'Tuned
for Growth' and
'Champion
the Client. We welcome
their introduction
and the impact that
they will have on our
industry.
------------------------- -------------------------- -----------------------------------------------------------
Regulatory change
The risk of governments * We foster strong relationships with key regulators,
or regulators with whom we actively seek to converse to keep
introducing legislation abreast of, contribute, to and correctly implement
or new regulations regulatory changes
and requirements
in any of the
jurisdictions * We pay close regard to relevant public statements
in which we operate issued by regulators that may affect our industry
which could result
in an adverse
effect on our * The Board Risk Committee receives regular reports of
business or operations, current and emerging risks which timeline incoming,
through reduction and potential incoming, changes
in revenue, increases
in costs or increases
in capital and * The Board Risk Committee has received regular updates
liquidity requirements. on UK Consumer Duty regulation, from the early
consultation stage through to approval of the final
implementation plan
------------------------- -------------------------- -----------------------------------------------------------
Tax change
The risk of significant * We monitor developments in international tax laws to
adverse changes ensure continued compliance and ensure stakeholders
in the way we are aware of any significant adverse changes that
are taxed. might impact us
A prime example
is the imposition * Where appropriate and possible, we collaborate with
of a financial tax and regulatory authorities to provide input on
transactions tax, tax policy, or changes in law
which could severely
impact the economics
of trading and
developments in
international
tax law.
-------------------------- -----------------------------------------------------------
1 DORA - Digital Operational Resilience Act7
2 MiFID - Markets in Financial Instruments Directive
MiFIR - Markets in Financial instruments Regulation
3 EMIR - European Market Infrastructure Regulation
------------------------- -----------------------------------------------------------------------------------------
Statement of Directors' Responsibilities in respect of the
Financial Statements
The Directors are responsible for preparing the FY23 Annual
Report and Financial Statements in accordance with applicable law
and regulation.
Company law requires the Directors to prepare Financial
Statements for each financial year. Under that law the Directors
have prepared the Group and the Company Financial Statements in
accordance with UK-adopted International Accounting Standards.
Under company law, 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 Company and of the
profit or loss of the Group for that period. In preparing the
Financial Statements, the Directors are required to:
-- Select suitable accounting policies and then apply them consistently;
-- State whether applicable UK-adopted International Accounting
Standards have been followed, subject to any material departures
disclosed and explained in the Financial Statements;
-- Make judgements and accounting estimates that are reasonable and prudent; and
-- Prepare the Financial Statements on the going concern basis
unless it is inappropriate to presume that the Group and Company
will continue in business.
The Directors are responsible for safeguarding the assets of the
Group and Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The Directors are also responsible for keeping adequate
accounting records that are sufficient to show and explain the
Group's and Company's transactions and disclose with reasonable
accuracy at any time the financial position of the Group and
Company and enable them to ensure that the Financial Statements and
the Directors' Remuneration Report comply with the CA2006.
The Directors are responsible for the maintenance and integrity
of the Company's website. Legislation in the UK governing the
preparation and dissemination of Financial Statements may differ
from legislation in other jurisdictions.
Directors' confirmations
The Directors consider that the FY23 Annual Report and Financial
Statements, taken as a whole, is fair, balanced and understandable
and provides the information necessary for shareholders to assess
the Group's and Company's position and performance, business model
and strategy.
Each of the Directors, whose names and functions are listed on
pages 58-61 confirm that, to the best of their knowledge:
-- The Group and Company Financial Statements, which have been
prepared in accordance with UK-adopted International Accounting
Standards, give a true and fair view of the assets, liabilities and
financial position of the Group and Company, and of the profit of
the Group
-- The Strategic Report includes a fair review of the
development and performance of the business and the position of the
Group and Company, together with a description of the principal
risks and uncertainties that it faces
In the case of each Director in office at the date the
Directors' Report is approved:
-- So far as the Director is aware, there is no relevant audit
information of which the Group's and Company's Auditor are
unaware
-- They have taken all the steps that they ought to have taken
as a Director in order to make themselves aware of any relevant
audit information and to establish that the Group's and Company's
Auditor is aware of that information
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