November 23, 2017 / 8:16 AM / a year ago

UPDATE 1-UK's CMC Markets H1 profit up 58 pct boosted by high value trading

(Adds details, background)

Nov 23 (Reuters) - British financial spreadbetting firm CMC Markets Plc reported a 58 percent jump in first-half profit, allaying some concerns about a sectorwide regulatory clampdown and lower levels of volatility.

Shares of CMC rose as much as 8 percent in morning trading.

The company, set up by Chief Executive Peter Cruddas as a foreign exchange broker with a 10,000 pound investment in 1989, said pretax profit rose to 29.8 million pounds ($39.7 million) in the six months ended Sept. 30, from 18.8 million pounds a year earlier.

The value of trades was up 29 percent, while volumes increased 15 percent.

Revenue per active client rose 22 percent to 1,814 pounds, while the number of active clients fell 2 percent to 46,634.

Chairman Simon Waugh will retire from the board on Dec. 31 and will be replaced by James Richards, the company added.

CMC said it would pay an interim dividend of 2.98 pence per share, unchanged from the previous year.

The company said it remained cautious in its short-term outlook, citing uncertainties around current regulatory reviews and future regulatory changes.

CEO Cruddas said the company executives had met with Europe’s regulators as part of an ongoing review of the spreadbetting industry.

“What is clear from the consultation process is that the regulators are concerned with the level of client losses, and inadequate appropriateness and on-boarding checks,” Cruddas said.

CMC said in June that its customers know the risks they are taking on, as regulators moved to tighten controls on the fast-growing 3.5 billion pound industry.

Cruddas said at the time that clients had shown “complete ambivalence” to regulatory issues.

Britain’s Financial Conduct Authority (FCA) in December joined other European regulators to protect individuals in the spreadbetting industry, where it said most retail investors lose money.

The FCA 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.

CMC stock was trading 6.7 percent higher at 178 pence at 0810 GMT. ($1 = 0.7509 pounds)

Reporting by Noor Zainab Hussain and Sangameswaran S in Bengaluru; Editing by Saumyadeb Chakrabarty and Amrutha Gayathri

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