REG - IG Group Hldgs plc - Publication of Annual Report and Notice of AGM
15/08/2023 15:00
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RNS Number : 4053J IG Group Holdings plc 15 August 2023
IG Group Holdings plc
LEI No: 2138003A5Q1M7ANOUD76
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
(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
(https://annualreport.iggroup.com/2023)
· Notice of AGM:
iggroup.com/investors/shareholder-information/general-meetings
(http://www.iggroup.com/investors/shareholder-information/general-meetings)
IG Group Investors IG Group Press FTI Consulting Company Secretariat
Martin Price / Simon Wright Angela Warburton / Alayna Francis Edward Berry / Katherine Bell Aurelia Gibbs
020 7573 0020 / 0099 020 7633 5382 / 5395 07703 330 199 / 079 7687 0961 020 7896 0011
investors@ig.com press@ig.com iggroup.sc@fticonsulting.com (mailto:iggroup.sc@fticonsulting.com) cosec@ig.com (mailto:cosec@ig.com)
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 (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 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.
APPENDIX
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 - trading book and non-trading book (inclusive of interest rate · The inherent conflict in OTC trading, is mitigated at IG through the
risk) design of our business model, being based around the internalisation of client
The risk we face arising from the nature of our business and business model,
trading and hedging of residual exposures more than the predefined Board
including market, credit and liquidity risks, and capital adequacy adherence. The risk of loss due to movements in market prices arising from our net approved limits. In short, our long-term interests align with those of our
position in financial instruments. clients
· Additionally, our order execution system price improves client orders
Risk appetite where the underlying market has moved against them while the order is being
processed. We operate a real-time market position monitoring system
In pursuit of our business goals, we have an appetite for running modest
levels of market risk to facilitate the high-quality instant execution of · Our scenario-based stress tests are performed on an hourly basis
client orders while accepting that periodic credit risk losses will occur in
normal business activity. We have very little appetite for liquidity or · We have predetermined, Board-approved, market risk limits
regulatory capital risk and ensure complete compliance with regulatory
requirements. · Our dynamic approach to limit management makes full use of highly liquid
markets in core hours, reducing in less liquid periods
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 centred on
protecting our clients from poor outcomes, taking into consideration
The risk that a client fails to meet their obligations to us, resulting in a underlying market volatility and liquidity, while simultaneously protecting IG
financial loss. from exposure to debt
· 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 institutional counterparties
upon account opening, which is updated periodically (or ad hoc upon an event)
The risk of loss due to the failure of a financial 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 · Active liquidity management within the Group is central to our approach,
ensuring sufficient liquidity is in the right places at the right times
The risk that we are unable to meet our financial obligations.
· We conduct monthly liquidity stress tests
· We have access to committed unsecured bank facilities and debt
Capital adequacy · We conduct daily monitoring of compliance with all regulatory capital
requirements. With our ICARA (Internal Capital Adequacy and Risk Assessment),
The risk that we hold insufficient capital to cover our risk exposures. we 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 · Regular strategy updates to the Board from the Executive Directors
throughout the year detailing the strategic progress of the business
The risk that our performance is affected by adverse market conditions, The risk that our competitive position weakens or that our profits are
failure to adopt an effective business strategy, or competitors offering more impacted due to the failure to adopt or implement an effective business · External consultation and extensive market research undertaken in advance
attractive products or services. strategy, including the risk of failing to appropriately integrate an of committing to any strategy to test and validate a concept
acquisition.
· Projects managed via a phased investment process, with regular review
periods, to assess performance and determine if further investment is
justified
Risk appetite
There is little appetite 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 information, KPIs and regular
reforecasts of expected financial performance
The risk that our performance is affected by client sensitivity to adverse
market conditions, making it harder to recruit new clients and reducing the · Forecasts used to determine actions necessary to manage performance and
willingness of existing clients to trade. products in different geographical locations, with consideration given to
changes in market conditions
· Regular updates to investors and market analysts to manage the impact of
market conditions on performance expectations
Competitor · Our approach to conduct demands we put the client at the heart of our
decision making. We do not engage in questionable practices, regardless of
We operate in a highly competitive environment and seek to mitigate competitor whether they would prove to be commercially attractive to clients
risk by maintaining a clear distinction in the market. This is achieved
through compelling and innovative product development and quality of service, · Ensuring that our product offering remains attractive, considering the
all while closely monitoring the activity and performance of our competitors. other benefits that we offer our clients, including brand, strength of
technology and service quality
Risk category Principal risks Mitigation and controls
Conduct and Operational Risk Technology and information security · Maintenance of a 24/7 Incident Management function
The risks that our conduct poses to the achievement of fair outcomes for The risk of data loss or that our operations are affected, or clients receive · Security operations function with 24/7 strength-in-depth capabilities to
consumers or the financial markets, and the risk of loss resulting from a degraded service or are unable to trade due to an operational outage or monitor, prevent and triage cyber threats
inadequate or failed internal processes, people, systems, or external events. system limitations. Technology threats can evolve from poor internal practices
and systems or from the continuously evolving cyber landscape. · DOS mitigation services and 24/7 incident management capabilities
· Regular disaster-recovery capability testing
· Capacity stress testing
Risk appetite
· Our Change Management and Quality Assurance functions undertake risk
Operational risk is present in the normal course of business, and it is not assessments, utilise defined maintenance windows and help deploy new products
possible, or even desirable, to eliminate all risks inherent in our and services
activities. We have no appetite for poor conduct-related events.
· We invest in strength-in-depth capabilities to mitigate the ever-present
and changing cyber threats
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 reporting on suspicious
transactions, which is designed to protect the integrity of the financial
The risk of failing to identify and report financial crime. Inadequate markets and provide a stable and fair-trading environment for our clients
oversight and client due diligence can result in clients attempting to use us
to commit fraud or launder money, third parties trying to access client or · Appropriate onboarding processes for different client types and vendors
corporate funds, or employees misappropriating funds if an opportunity arose. with enhanced due diligence and monitoring processes where appropriate
· Segregated duties within processes to ensure adequate oversight and
control over internal fraud
Trading issues · A 24/7 approach with trading desks located in London and Australia
providing 24-hour coverage. We apply Board-approved Market Risk Limits and
The risk related to any issues around our internal hedging, client trading, operate under a robust control framework to mitigate our exposure to loss
and process for corporate actions, dividends, and stock transfers. through operational risk events which may impact trading. Our order execution
processes not only comply with all regulatory requirements, but go over and
above in filling client orders, on an asymmetrical basis, providing better
than best execution
Client life cycle management · Bespoke onboarding processes ensure we only offer products and services
to clients with sufficient means and a clear understanding of the risks
This is the risk related to issues in the client life cycle spanning the involved. Regular assessments of services identified as being critical to
customer agreement, account set-up, interactions, and appropriateness of clients to ensure their operational resiliency. Single points of failure
account types and product offerings. identified, and contingency plans set in place
· Complete adherence to client money and asset regulations, taking the
highest standard set by the FCA in the UK and applying them worldwide where
possible
· 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 and statutory reporting issues · Our operational risk framework provides the base from which our robust
control environment reduces operational risk events from manifesting
The risk of production issues which could lead to untimely, incomplete, or
inaccurate Financial Statements, transaction reporting, tax filing, regulatory · Our automated systems enable us to flex with client trading volumes
capital, and forecasting.
· Dedicated specialist steering committees manage and oversee niche areas,
such as transaction reporting, financial crime, financial reporting and
forecasting, climate responsibilities, our Internal ICARA and Annual Report
production
Risk category Principal risks Mitigation and controls
Regulatory Environment Risk Regulatory risk · Continuous monitoring of operations to ensure they adhere to regulatory
requirements and expected standards
The risk that we face enhanced regulatory scrutiny with a higher chance of The risk of investigation, enforcement, or sanction by financial services
regulatory action, or the risk that the regulatory environment in any of the regulators. This may be driven by internal factors, such as the strength of · Continuous review of all regulatory incidents and breaches with deep
jurisdictions in which we currently operate, or may wish to operate, changes our control framework or our interpretation, understanding, or implementation dives performed on common themes
in a way that has an adverse effect on our business or operations, through of relevant regulatory requirements. This risk can also arise from external
reduction in revenue, increases in costs, or increases in capital and factors, such as the current and changing priorities of our regulators' policy · Policies and procedures are embedded across the Group with a regulatory
liquidity requirements. and supervision departments. compliant mindset
· We operate values to always Champion the Client, whilst Raising the Bar
Risk appetite
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 · We foster strong relationships with key regulators, with whom we actively
seek to converse to keep abreast of, contribute, to and correctly implement
The risk of governments or regulators introducing legislation or new regulatory changes
regulations and requirements in any of the jurisdictions in which we operate
which could result in an adverse effect on our business or operations, through · We pay close regard to relevant public statements issued by regulators
reduction in revenue, increases in costs or increases in capital and liquidity that may affect our industry
requirements.
· The Board Risk Committee receives regular reports of current and emerging
risks which timeline incoming, and potential incoming, changes
· The Board Risk Committee has received regular updates on UK Consumer Duty
regulation, from the early consultation stage through to approval of the final
implementation plan
Tax change · We monitor developments in international tax laws to ensure continued
compliance and ensure stakeholders are aware of any significant adverse
The risk of significant adverse changes in the way we are taxed. changes that might impact us
· Where appropriate and possible, we collaborate with tax and regulatory
authorities to provide input on tax policy, or changes in law
A prime example is the imposition of a financial transactions tax, 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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