3 Min Read
* CEO says clients don't want to be reined in
* Regulatory crackdown has cast shadow over industry
* Does not see Brexit as a major issue- CEO (Adds company comments, details, share movement)
By Noor Zainab Hussain
June 8 (Reuters) - Financial spreadbetting company CMC Markets said its customers know the risks they are taking on as regulators move to tighten controls on the fast-growing 3.5 billion pound ($4.5 billion) industry.
The number of CMC's active clients rose 5 percent to 60,082 in the year to end of March and Chief Executive Peter Cruddas said they had shown "complete ambivalence" to regulatory issues.
"Clients just want to trade.... what clients are telling us in they like trading, they understand the risks, they don't need leverage imposed upon them," Cruddas told Reuters on Thursday.
Britain's Financial Conduct Authority (FCA) said in December it had found evidence of poor conduct across the market over the past six years and that people using the most popular product - known as a contract for difference - lost 2,200 pounds a year on average.
It wants to cap the level of exposure that clients take on and impose other curbs.
Shares in CMC and rivals IG Group and Plus500 fell heavily after the FCA intervention.
CMC Chairman Simon Waugh said results for the year had been "somewhat overshadowed" by regulatory proposals.
CMC, which listed on the London stock market last year, posted lower annual profit in the year to March 31 as reduced levels of volatility resulted in fewer trading opportunities for its clients.
However, a pick up in activity around the U.S presidential elections in November and a strong end to the year helped it to beat expectations.
Annual pretax profit fell 9 percent to 48.5 million pounds, ahead of consensus estimates of 45.5 million pounds.
"We had a good finish to the month of March and so we've had a good beat on the income," Grant Foley, chief operating and financial officer, told Reuters.
CMC shares rose as much as 7.4 percent to 137.25 pence on Thursday. They remain well below the 240 pence price at which they were floated in February 2016.
Cruddas, one of the City of London's most prominent Brexit supporters in last year's referendum, played down the impact of Britain's departure from the bloc.
"When Britain exits the European Union, we don't see this as a major issue for us. We have a very strong German office, Spanish office, France office, we can easily hub out of one of those," Cruddas said. ($1 = 0.7738 pounds) (Reporting by Noor Zainab Hussain in Bengaluru; Editing by Sunil Nair and Keith Weir)