CMC Markets

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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)
Services Online trading, CFDs and spread betting
Revenue £127.2m (2013)[1]
Operating income £-2.6m (2013)[1]
Net income £-2.8m (2013)[1]
Total assets £162.1m (2013)[1]
Employees 589 (2013)[1]
Website www.cmcmarkets.com

CMC Markets is a UK-based financial derivatives dealer. The company offers online trading in spread betting, contracts for difference (CFDs) and foreign exchange (forex) across world markets. While a large part of its activity is in the UK, Europe, Singapore and Australia, the company has an international presence.

History[edit]

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 dropped as part of the re-branding in September 2005.[2]

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. The company pioneered 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 Limited, 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 to CMC Markets and the remaining parts of Information Internet Limited 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 online spread betting on financial markets. These two products would become the bulk of the business for CMC Markets in the following years.

In 2002 the company embarked on a major global expansion drive. It expanded quickly between 2002 and 2007 and opened offices in a large number of countries, as well as growing the spread betting business in the UK and the CFD business internationally.

In 2002, CMC Markets opened its first overseas office in Sydney, Australia, with a number of other offices following in next few years including Beijing, Hong Kong, Frankfurt in 2005, Auckland in 2006 and Stockholm in 2007.

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.

In 2006 Peter Cruddas planned to float the company and CMC Markets was prepared for IPO.[3][4] However, the IPO was cancelled at the last minute with Peter Cruddas citing market conditions.

In 2007 CMC Markets bought financial media and technology company Digital Look,[5] 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 continued to run the website 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 renamed CMC Markets StockBroking. This continued to offer physical share broking services in Australia.

In 2007 Goldman Sachs bought a 10% stake in the company[6] and the due diligence that it did as part of the purchase resulted in an overhaul of the company direction.

In 2008 and 2009, CMC Markets saw profits decline with the global financial crisis. In response Peter Cruddas changed his management team, let 350 staff go and closed seven offices.[7]

In 2010, CMC Markets launched its new Next Generation trading platform[8][9] to the UK market. The new trading software quoted market prices to additional decimal points and provided trade execution without re-quotes.

In 2011 the Digital Look business unit was sold to the Spanish-based Web Financial Group.[10]

On 24 March 2012, Peter Cruddas, the owner of CMC markets, was secretly videotaped by the Sunday Times, allegedly selling access to the UK Prime Minister for £250,000 in the 2012 United Kingdom cash for access scandal.[11]

In June 2013, Cruddas successfully sued the Sunday Times for libel over its coverage of him, which the High Court found had been defamatory.

Operations[edit]

CMC Markets operates and has offices in the UK, Australia, Germany, New Zealand, Singapore, Spain, Italy, Sweden, Norway, 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[edit]

CMC Markets is one of the companies that launched CFD 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.[12]

References[edit]

External links[edit]