REG - IG Group Hldgs plc - Annual Report and Notice of AGM
15/08/2022 18:00
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RNS Number : 0860W IG Group Holdings plc 15 August 2022
IG Group Holdings plc
LEI No: 2138003A5Q1M7ANOUD76
15 August 2022
Publication of Annual Report and Notice of Annual General Meeting
IG Group Holdings plc ('the Company'), a global leader in online trading, has
today distributed to shareholders the following documents:
· Annual Report and Accounts for the year ended 31 May 2022 ('Annual
Report'); and
· Notice of the 2022 Annual General Meeting ('AGM').
In accordance with Listing Rule 9.6.1, copies of the documents listed above
have been submitted to the Financial Conduct Authority via the National
Storage Mechanism and will shortly be available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(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:
www.iggroup.com/investors/financial-results/results-reports-and-presentations/result/year/2022
(http://www.iggroup.com/investors/financial-results/results-reports-and-presentations/result/year/2022)
Notice of AGM:
www.iggroup.com/investors/shareholder-information/general-meetings
(http://www.iggroup.com/investors/shareholder-information/general-meetings)
The Company announces that its 2022 AGM will be held at 14:00 on Wednesday 21
September 2022 at the Company's offices located at Cannon Bridge House, 25
Dowgate Hill, London, EC4R 2YA.
Additional information
The Appendix to this announcement contains information extracted from the 2022
Annual Report for the purposes of compliance with the FCA's Disclosure
Guidance and Transparency Rules and should be read in conjunction with the
Company's Full Year 2022 results announcement issued on 21 July 2022 which
can be found at www.iggroup.com (http://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 2022 Annual Report.
APPENDIX
The principal risks set out below are extracted from pages 47 to 53 of the
Annual Report and are repeated here solely for the purpose of complying with
DTR 6.3.5.
Risk taxonomy
1. Regulatory environment risk
The risk that we face enhanced regulatory scrutiny with a higher chance of
regulatory action, or the risk that the regulatory environment in any of the
jurisdictions in which we currently operate, or may wish to operate, changes
in a way that has an adverse effect on our business or operations, through
reduction in revenue, increases in costs, or increases in capital and
liquidity requirements.
2. Commercial risk
The risk that our performance is affected by adverse market conditions,
failure to adopt an effective business strategy or competitors offering more
attractive products or services.
3. Business model risk
The risk we face arising from the nature of our business and business model,
including market, credit and liquidity risks and capital adequacy adherence.
4. Conduct and operational risk
The risk that our conduct poses to the achievement of fair outcomes for
consumers or the financial markets. The risk of loss resulting from inadequate
or failed internal processes, people, systems or external events.
Within each of these broad categories the taxonomy identifies more detailed
risks as outlined in the tables below.
Principal Risks
1. Regulatory environment risk
Regulatory risk
Risk Mitigation and controls
We are subject to enhanced regulatory scrutiny and therefore face a higher · Monitor operations to ensure they adhere to regulatory requirements and
chance of investigation, enforcement or sanction by financial services standards
regulators. This may be driven by internal factors, such as the strength of
our control framework or its interpretation, or the awareness, understanding · Continuously review all regulatory incidents and breaches
or implementation of relevant regulatory requirements. This risk can also
arise from external factors, such as the current and changing priorities of · Define and embed policies and procedures across the Group to ensure
our regulators' policy and supervision departments. regulatory compliance
Regulatory change
Risk Mitigation and controls
We operate across highly regulated environments which are continually · Maintain strong relationships with key regulators and actively seek to
evolving, and face the risk of governments or regulators introducing converse in an effort to keep abreast of, contribute to and correctly
legislation or new regulations and requirements in any of the jurisdictions implement regulatory changes
in which we operate. This could result in an adverse effect on our business
or operations, through reduction in revenue, increases in costs or increases · Monitor relevant public statements by regulators that affect our
in capital and liquidity requirements. industry
· Maintain current and emerging risk reports which timeline incoming
changes
Tax
Risk Mitigation and controls
The risk of significant adverse changes in the manner in which we are taxed. · Monitor developments in international tax laws to ensure continued
compliance and that stakeholders are aware of any significant adverse changes
Examples of tax risks we face include the risk of the imposition of a that might impact us
financial transactions tax, which could severely impact the economics of
trading and developments in international tax law, which in turn could impact · Where appropriate and possible, collaborate with tax and regulatory
the amount of tax that we pay. authorities to provide input on tax policy, or changes in law
2. Commercial risk
Strategic delivery
Risk Mitigation and controls
The risk that our competitive position weakens or profits are impacted due to · The Board receive strategy updates from the Executive Directors
the failure to adopt or implement an effective business strategy, throughout the year detailing the strategic progress of the business
including the risk of failing to appropriately integrate an acquisition.
· Undertake external consultation and extensive market research in
advance of committing to any strategy in order to test and validate a concept
· Manage projects via a phased investment process, with regular
review periods, in order to assess performance and determine if further
investment is justified
Financial market conditions
Risk Mitigation and controls
The risk that our performance is affected by client sensitivity to adverse · Review daily revenue, monthly financial information, KPIs and
market conditions, making it harder to recruit new clients and reducing the regular reforecasts of expected financial performance
willingness of existing clients to trade.
· Use forecasts to determine actions necessary to manage performance
and products in different geographical locations, with consideration given
to changes in market conditions
· Regularly update investors and market analysts on revenue
performance, and engage with them to manage the impact of market conditions on
performance expectations
Competitor risk
Risk Mitigation and controls
We operate in a highly competitive environment and seek to mitigate competitor · Monitor conduct to ensure we do not engage in questionable
risk by maintaining a clear distinction in the market. This is achieved practices, regardless of whether they would prove to be commercially
through compelling and innovative product development and quality of service, attractive to clients
all while closely monitoring the activity and performance of our competitors.
· Ensure that our product offering remains attractive, taking into
account the other benefits that we offer our clients, including brand,
strength of technology and service quality
3. Business model risk
Market risk
Risk Mitigation and controls
The risk of loss due to movements in market prices arising from our net · Use a real-time market position monitoring system
position in financial instruments. We seek to manage our market risk so our
trading revenue predominantly reflects client transaction fees net of hedging · Monitor market risk exposures with hourly scenario-based stress
costs and is not driven by market risk gains or losses. tests which analyse the impact of potential stress and market gap events
We are also exposed to interest rate risk through our debt and holdings of · Take appropriate action to reduce risk exposures as required. If
cash and investments. exposures exceed pre-determined limits, hedging is undertaken to bring the
exposure back within the limits
· Our framework consists of dynamic limits which can be fully
utilised during market opening hours and contract in less liquid periods.
Market risk limits have been increased over the year in line with the growth
of the Group, bringing greater efficiency of internalisation of client flow.
All increases are reviewed and approved by the Board
Credit risk - Client
Risk Mitigation and controls
The risk that a client fails to meet their obligations to us, resulting in a · Set client margin requirements considering the market for each
financial loss. Client credit risk principally arises when a client's total instrument, requiring clients to deposit additional collateral or reduce
funds deposited are insufficient to cover any trading losses incurred. positions where necessary
· Manage client credit risk in real time via our 'Close-out monitor'
system. Monitor and manage client margin calls via automatic liquidation of
account positions once pre-determined account close-out levels are breached
· Offer risk management training to clients which encourages them to
collateralise their accounts at an appropriate level and set a level at which
an individual deal will be closed
Credit risk - Financial institution
Risk Mitigation and controls
We have financial exposure to a number of financial institutions, owing to the · Perform credit reviews on financial institutional counterparties
placement of financial assets at banks and the hedging of market risk in the when a new relationship is entered into; this is updated semi-annually (or ad
wholesale markets, which requires us to place margin with our hedging brokers. hoc upon an event)
· Actively manage credit exposure to each of our broking
counterparties, settling or recalling balances at each broker on a daily basis
in line with the collateral requirements
· Ensure the majority of deposits are demand or overnight deposits,
enabling us to react immediately to any deterioration in credit quality
Liquidity
Risk Mitigation and controls
This is the risk that we are unable to meet our financial obligations as they · Manage liquidity within the UK Defined Liquidity Group (UK DLG)
fall due. comprising of IG Markets (IGM), IG Index (IGI) and IG Trading and Investments
(IGT&I)
· The UK DLG carries out a liquidity assessment each year to
ascertain if it has sufficient liquidity to continue in operation under
liquidity stress and provides mitigating actions to improve the liquidity
position in these stress scenarios
· Mitigate liquidity risk through access to committed unsecured
bank facilities and debt
Capital adequacy
Risk Mitigation and controls
The risk that we hold insufficient capital to cover our risk exposures and · Manage capital resources with the objectives of facilitating
have to curtail or cease operations. business growth, maintaining our dividend policy and complying with the
regulatory capital resource requirements
We are supervised on a consolidated basis by the UK's FCA and our global
entities' operations are directly authorised by the respective local · Undertake an annual capital assessment and apply a series of
regulators. stress-testing scenarios to our base financial projections, approved by the
Board
· Operate a monitoring framework over our capital resources and minimum
capital requirements daily
4. Conduct and operational risk
Platform outage
Risk Mitigation and controls
The risk that clients are unable to trade on the platform due to an · Maintain a 24/7 Incident Management function to manage the
operational outage and the risk that our operations are affected due to resolution of incidents
inadequate disaster recovery capabilities and delays in our ability to recover
within appetite. · Perform regular disaster recovery capability testing to ensure
that standby services are effective and minimise the impact to operations
· Apply denial-of-service (DOS) protection against cyber-attacks
that would impact platform availability
· Maintain a Change Management function which undertakes risk
assessments and utilises defined maintenance windows to protect core trading
periods and client impact
System performance and capacity issues
Risk Mitigation and controls
The risk that system capability limitations or unexpected client activity · Undertake regular performance and capacity stress testing to
results in degradation of client platforms or internal business service to ensure our platforms have sufficient headroom and resilience to perform in
clients. We need to ensure we have sufficient capacity to flex with client times of heightened volatility and increased demand
demand.
· Maintain an Enterprise Change function to manage business change
and the development of new products and services
· Maintain a Quality Assurance function to test and identify system
defects through the development lifecycle and resolve these before they impact
applications
Information security
Risk Mitigation and controls
This is the risk of data loss that results in a regulatory breach or fine. · Maintain a 24/7 Security Operations Centre for the review and
This can be due to employee or vendor activity, non-compliance with data triage of information security incidents, and employ mitigation services for
regulations, cyber-attack or data integrity issues. threats such as hacking, malware, data loss and data gathering
· Host a dedicated Information Security Forum, through which senior
management are updated on the strategy and progress of the Information
Security Programme and the status of threats and risks
Employee working conditions issues
Risk Mitigation and controls
The risk that we have inadequate employment practices which are detrimental to · Continuously refresh our employment policies and processes to
staff or can create conflict with the business. Employees should be confident ensure they match the latest industry standards and best practices
that they work in a safe environment.
· Obtain regular feedback from staff members on employment
practices and working conditions in order to assess and improve our practices
and continue to be a top employer
· Undertake annual engagement surveys to identify any employee
dissatisfaction which can then be investigated and improved upon
· Purchase suitable insurance programmes which cover employee
requirements globally
Trading issues
Risk Mitigation and controls
The risk related to any issues with the processes around our internal hedging · Internalise client flow and hedge efficiently with return to volume
and client trading. This also considers how we process clients' corporate of client income being a key monitoring metric
action events, dividends and stock transfers.
· Put in place market risk limits and have very low tolerance for
operational issues that result in a market risk loss
· Strictly adhere to best execution rules which are monitored through
the Best Execution Committee, applying the highest standards to all
jurisdictions in which we operate Take a 'follow the sun' approach with
trading desks located in Australia and London with shift patterns
Client management issues
Risk Mitigation and controls
This is the risk related to the operational and conduct issues in the client · Regular assessments of services which have been identified as
lifecycle spanning from the customer agreement, account set-up, interaction being critical to clients and are required to be operationally resilient, with
with us, and appropriateness of account types and product offerings. single points of failure identified and back-ups set in place
· Cross-team training to ensure resources are adequate to flex with
demand
· Establish KPIs to monitor levels of service provided, and invite
clients to provide feedback, with any issues identified being investigated
Financial crime
Risk Mitigation and controls
The failure to identify and report financial crime, and inadequate client due · Have a mature control framework for identifying suspicious
diligence and oversight, can result in a breach of regulatory requirements. transactions related to market abuse which must then be reported on
Clients may attempt to use us to commit fraud or launder money, third parties
may try to extract client or corporate funds, and employees could · Establish appropriate onboarding processes for different clients and
misappropriate funds if an opportunity arose. vendors with an enhanced due diligence process
· Ensure Group policies and processes have segregated duties to ensure
adequate oversight and control over internal fraud
Business support process issues
Risk Mitigation and controls
The risk that inadequate business processes and oversight can lead to internal · Our operational risk framework ensures the control environment is
issues within the business. These can relate to inaccurate or late client monitored and aim to reduce the operational events which occur
money or asset management, mismanaged corporate cash, unintentional breach of
market risk limits, incorrect revenue calculation or allocation, or incorrect · Escalation procedures efficiently manage the occurrence of these
or late payroll processing. risks
· Specific committees and audits monitor topics such as client money
and asset management
· Ensure correct resourcing to flex with client volumes and monitor
attrition rates at a functional level
Financial integrity and statutory reporting issues
Risk Mitigation and controls
The risk of production issues which could lead to untimely, incomplete or · Monitor and enhance our control environment, which aims to reduce the
inaccurate Financial Statements, transaction reporting, tax filing, regulatory number, size of and impact of these events which occur
capital, financial crime reporting and forecasting. Any issues or errors can
have a detrimental impact on clients, markets and shareholders. · Implement escalation procedures to efficiently manage the occurrence
of these risks
· Specific steering committees help manage areas such as transaction
reporting, financial crime reporting, financial reporting and forecasting,
Internal Capital Adequacy and Risk Assessment (ICARA) production and annual
report production
Threats to employees and assets
Risk Mitigation and controls
The risk related to dangers to employees and damage to physical and · Secure data centres and offices and with state-of-the-art cyber
non-physical property or assets from natural or non-natural external causes. security and fire safety protocols in place
We recognise the growing risks associated with climate change and a warming
planet. These include the physical risks from changing weather patterns, and · Purchase suitable commercial insurance globally for assets and each
the transition risks arising from movement towards a less polluting, greener of our premises
economy.
· Engage with an external environmental consultant to help conduct
climate-related risk assessments bi-annually
Statement of Directors' Responsibilities in respect of the Financial
Statements
The Directors are responsible for preparing the FY22 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
· 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 Companies Act 2006.
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 FY22 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 115
to 116 of the full Annual Report 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 are aware of that
information
On behalf of the Board.
June Felix
Chief Executive Officer
15 August 2022
For further information, please contact:
IG Group:
Deputy Group Company Secretary
Aurelia Gibbs
+44 20 7896
0011
cosec@ig.com (mailto:cosec@ig.com)
Investors contact
Richard Heading, Business Finance Director /
+44 20 7573 0742
Simon Wright, IR Manger
+44 20 7573 0099
investors@ig.com (mailto:investors@ig.com)
Press contact
Alayna Francis, Global Head of Media Relations
+44 20 7633 5395
press@ig.com (mailto:press@ig.com)
FTI Consulting:
Neil Doyle / Katherine Bell
+44 777 1978 220 / +44 797 687 0961
neil.doyle@fitconsulting.com /
katherine.bell@fticonsulting.com (mailto:katherine.bell@fticonsulting.com)
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 continues to innovate its offering for the new generation of
tomorrow's investors through its IG.com
(https://urldefense.com/v3/__http:/IG.com__;!!E1R1dd1bLLODlQ4!EaVW3CZ_pnee8jmfkm7Bjj4rTxFJrgJmW1f8YUlURmALkmxA0XMXX9gDJmJdOFfB_krkfncFI61jJbPOq_62Is3x$)
, 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.
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