A note on spread betters (PLUS/CMC)

Thursday, 7th June 2018 09:18 - by Rajan Dhall

Now this is an industry that has come under intense regulatory changes recently. ESMA has changed leverage guidelines, MiFiD II has been implemented and client education regulations are being enforced. Despite this PLUS 500 continue to flourish and this morning state 'While market conditions have returned to more normal levels in Q2 2018, trading has nevertheless been subsequently materially ahead of management expectations'.

In regards to ESMA the company are saying its hard to assess the impact of the rules which come into effect on the 1st Aug but the Co. will make further announcements when appropriate. 

CMC Markets reported client activity increasing net operating income to £187.1 million up £26.3 million (16%) and Institutional business revenues increased by £8.7 million (38%) to £31.4 million. The company also stated that performance is inline with the previous years with no guidance changes. 

Its clear to see the future is slightly uncertain on how the ESMA leverage changes will impact the spread betters. If financial market volatility remains the expectations are for revenues to stay strong, but there  their seems to be a case of over regulation in some cases and it is having an impact on business. PLUS is looking very well placed for this battle but the share price has risen sharply recently but as the old saying goes maybe the trend will be your friend. 

The Writer's views are their own, not a representation of London South East's. No advice is inferred or given. If you require financial advice, please seek an Independent Financial Adviser.