IG Group Holdings plc
LEI No: 2138003A5Q1M7ANOUD76
10 August 2020
Notice of Annual General Meeting and related matters
IG Group Holdings Plc ('the Company'), a global leader in online trading, announces that its 2020 Annual General Meeting (the 'AGM') will be held at 11.00 a.m. on Thursday 17 September 2020 at the Company's offices located at Cannon Bridge House, 25 Dowgate Hill, London, EC4R 2YA.
Due to the uncertainty over whether the UK Government's restrictions on gatherings will be eased over the next few months, the Board have decided that the AGM will be held as a closed meeting. The Company will keep under review the AGM format and any changes to the AGM will be communicated to Shareholders before the meeting on the Company's website at www.iggroup.com and, where appropriate, by an announcement via the Regulatory Information Service.
In connection with the AGM, the following documents have been posted or made available to shareholders on 10 August 2020:
· Annual Report and Accounts for the year ended 31 May 2020 ('Annual Report');
· Notice of the AGM; and
· Proxy Form for the AGM
In accordance with Listing Rule 9.6.1, copies of the documents listed above have been submitted to the UK Listing Authority via the National Storage Mechanism and will shortly be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism
The Annual Report and Notice of the AGM are available to view on the Company's website at www.iggroup.com
NED Role Changes
The Company wishes to further announce a number of changes to the allocation of responsibilities amongst its Non-Executive Directors which will take effect from the closure of the AGM on 17 September 2020.
Malcolm Le May is currently Chair of the Remuneration Committee and the Senior Independent Director (SID). Malcolm intends to step down from the role of Chair of the Remuneration Committee and from the role of SID following the conclusion of the AGM. At that time Helen Stevenson will assume the responsibilities of the role of Chair of the Remuneration Committee*. Jonathan Moulds will assume the role of SID following the conclusion of the AGM. Malcolm Le May will remain on the Board as a Non-Executive Director.
Commenting on the changes, Company Chairman Mike McTighe said: "I'd like to thank Malcolm for fulfilling the role of Chairman of the Remuneration Committee and SID which he has done with considerable skill and professionalism over a number of years. I am delighted that we will be able to continue to call on his skills and experience as a Non-Executive Director going forward. I welcome Helen and Jonathan to their new roles as Chair of Remuneration Committee and SID respectively."
* this is subject to regulatory approval in respect of IG Index Limited and IG Markets Limited.
In addition to the standard business to be conducted at the 2020 AGM, a special resolution is being proposed to rectify the position in relation to certain dividends having been made by the Company otherwise than in accordance with the Companies Act 2006.
As announced on 23 July 2020, the Board has become aware of certain issues in respect of the payment of the historical dividends paid by the Company in March 2010, October 2017 and March 2018 (together, the "Relevant Dividends" and each a "Relevant Dividend"). These issues resulted in each of the Relevant Dividends being made otherwise than in accordance with the 2006 Act.
At the time the Company made the Relevant Dividends, it did not have sufficient distributable profits. There were sufficient distributable profits within the Group as a whole, but the assessments made in calculating the amount of profits that were required to be remitted to the Company in order to create sufficient distributable profits were incorrect. This led to insufficient distributable profits in the Company at those times. Accordingly, the Relevant Dividends were, regrettably, made by the Company otherwise than in accordance with the 2006 Act. The total aggregate amount of the Relevant Dividends paid otherwise than in accordance with the 2006 Act was approximately £18.8 million, less than 15% of the aggregate Relevant Dividends paid. The Group's current and historical capital positions are unaffected.
Resolution 24 which is proposed as a special resolution at the AGM is being proposed in order to: (i) remedy the potential consequences of the Relevant Dividends having been made by the Company otherwise than in accordance with the 2006 Act; and (ii) put all potentially affected parties so far as possible in the position in which they were always intended to be had the Relevant Dividends been made in accordance with the requirements of the 2006 Act.
In compliance with DTR 6.3.5, the following information is extracted from the Company's Annual Report (page references are to pages in the Annual Report) and should be read in conjunction with the Company's Full Year 2020 results announcement issued on 23 July 2020 which can be found at 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.
The principal risks set out below are extracted from pages 53 to 59 of the Annual Report and are repeated here solely for the purpose of complying with DTR 6.3.5.
Principal risks/Taxonomy level 1
Taxonomy level 2
Regulatory environment risk
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.
· regulatory change
· Tax change
We actively monitor and manage the outlook for regulatory environment risk across all countries and territories where IG operates. Changes resulting from the 2019 European Securities and Markets Authority (ESMA) and Financial Conduct Authority (FCA) product intervention measures are now well embedded at IG. As regulation of all forms continues to evolve, further changes are anticipated in the normal course of business. When changes occur, we will have plans in place to ensure a smooth transition to meet new requirements.
The risk that our performance is affected by client sensitivity to adverse market conditions, failure to adopt or implement an effective business strategy, failure to provide the expected levels of client service, new or existing competitors offering more attractive products or services, risk to third-party supply of services or client dissatisfaction.
· Strategic delivery risk
· Market conditions risk
· Competitor risk
· Supplier restriction risk
· Client service risk
Market volatility increased sharply in Q4 2020 and remained at elevated levels into June 2020, leading to strong business performance. We've also made significant progress on our strategic initiatives, despite the circumstances related to the Covid-19 pandemic.
Business model risk
The risk we face arising from the nature of our business and our business model.
· Market risk
· Credit risk
· Liquidity risk
· Capital adequacy risk
Heightened volatility in Q4 resulted in significant trading volumes as existing and new clients looked to benefit from opportunities in the financial markets. Our mature and embedded systems and controls enabled us to manage the increased business model risk we faced during this extraordinary period.
The risk of loss resulting from inadequate or failed internal processes, people, systems or external events. Includes the risk that we're unable to attract and retain the staff we need to operate our business successfully.
· Technology risk
· People risk
· Process risk
· External risk
Increased trading volumes, particularly in Q4, inevitably led to additional stress across all areas of operational risk. While our systems, people and processes handled this well, we've prioritised several projects to strengthen our technological and operational control environment for the years ahead.
The risk that our conduct poses to the achievement of fair outcomes for consumers, or to the sound, stable, resilient and transparent operation of the financial markets.
· Our clients
· The markets and financial crime
· Culture and our people
IG continues to invest in systems, people and training to ensure our management of conduct risk meets the very highest standards. This includes ensuring we further embed our client-first culture, while continuing to work closely with all our regulators to protect the integrity of the financial markets.
Risk assessment, monitoring, control and reporting
Risk assessment, control and monitoring are the responsibility of operational management in each area. Risk and control assessments are undertaken with support from the second and third lines of defence, with key controls identified and documented.
The Risk Taxonomy is used to identify all risks faced by IG. The RAS identifies KRIs, and maximum limits and thresholds, to manage and monitor each risk. These KRIs are the basis of reporting and are distributed to the Board on a monthly basis, or escalated immediately depending on significance, with more detailed metrics reported to relevant operational committees where appropriate. Relevant stakeholders and risk owners manage their respective risks, taking appropriate actions to avoid breaches.
Risk reporting takes place across numerous reports, covering key market, credit, liquidity, capital adequacy, operational and conduct risk KRIs. Frequency of reporting can range from live to hourly, monthly, quarterly or annually, depending on the requirements. Dashboards, emails and written reports, along with automated alerts, are utilised to notify relevant stakeholders of the risk profile status.
IG has adopted a common Risk Taxonomy that breaks the principal risks we face into five broad risk categories: the risks inherent in the regulatory environment, the risks inherent in the commercial environment, business model risks, operational risk and conduct risk.
Regulatory environment risk
Legislative and regulatory change
IG operates in a highly regulated environment that is continually evolving. Governments or regulators may introduce legislation or new regulations and requirements in any of the jurisdictions in which we currently operate. We face the risk that this could result in an adverse effect on our business or operations, reducing our revenue, raising costs or increasing our capital and liquidity requirements. We operate to the highest regulatory standards and believe that we lead the industry in the way in which we deal with our clients. We maintain constructive relationships with our key regulators and actively seek to converse with them in an effort to keep abreast of emerging regulatory trends or developments.
Within regulatory environment risk, we also include the risk of significant adverse changes in the way that the Group as a whole, or our individual businesses, are taxed. Examples of the tax risk we face include the risk that a financial transactions tax is imposed, which could severely impact the economics of trading, and the risk that the basis under which we're taxed, in any of the jurisdictions in which we operate, is adversely affected.
We define commercial risk as the risk that our performance is affected by client sensitivity to adverse market conditions, failure to adopt or implement an effective business strategy, failure to provide the expected levels of client service, new or existing competitors offering more attractive products or services, risk to third-party supply of services or client dissatisfaction.
Strategic delivery risk
We work to mitigate our strategic delivery risk through the Board's regular and thorough review and challenge of our strategy, and the performance of current strategic initiatives. The Board holds an annual Strategy Day to consider and agree the strategic priorities for the business. Planning processes are extensive, with stakeholders across our business being involved, and may include external assistance. We undertake external consultation and extensive market research before committing to any strategy, in order to test and validate a concept. Projects are managed via a phased investment process, with regular review periods, in order to assess performance and determine if further investment is justified. The Board also considers specific strategic actions and initiatives during its normal schedule of Board meetings.
Market conditions risk
IG's trading revenue reflects the transaction fees paid by clients less the transaction costs incurred in hedging market exposures. The extent of client trading activity and the number of active clients in any period are the key determinants of revenue in that period. The ability to attract new clients, and the willingness of clients to trade, depends on the level of trading opportunity that clients perceive to be available to them in the markets. Our revenue is therefore partly dependent on market conditions.
We seek to mitigate the impact of adverse market conditions and client sensitivity towards those conditions through detailed review of daily revenue analysis, monthly financial information, Key Performance Indicators (KPIs) and regular reforecasts of our expected financial performance, reflecting the latest and expected market conditions. We use these forecasts to determine actions necessary to manage performance, with consideration given to changes in market conditions.
We regularly update our investors and market analysts on our revenue performance, including quarterly updates and pre-close statements, and engage with investors and market analysts to mitigate the risk that the impact of market conditions is not reflected in performance expectations.
IG operates in a highly competitive environment, which includes some unregulated and unethical operators. We work to mitigate competitor risk by maintaining a clear distinction in the market in terms of product, service and ethics, and by closely monitoring the activity and performance of our competitors, including detailed comparison of the terms of product offers.
We consider IG to be the leader in our market and, given our strong ethical values, we never deploy questionable practices, regardless of whether they would prove to be commercially attractive to clients. We do, however, aim to ensure that our product offering remains attractive, taking into account the other benefits that we offer our clients, including brand, strength of technology and client service quality. This allows our business to provide a competitive offering overall and manage competitor risk without compromising our values.
Supplier restriction risk
IG is dependent on services from third parties. These range from the banking industry to key technology firms, and cover matters such as the provision of corporate and client money bank accounts, client payment services, hedging and custodial services, to advertising and marketing channels.
We perform regular reviews and work to ensure that we have suitable engagement terms with each provider, so as to identify any issues which may arise and gain an understanding of any new upcoming requirements.
We aim to avoid concentration risk in our range of business partners, whether in IT or other services, and we consider this potential risk as part of our partner selection process. We're exposed to the risk that a key supplier could fail, and this is represented as one of the operational risk scenarios when we calculate our operational risk capital requirement.
Client service risk
The risk of client dissatisfaction arising from the expected service level not being met resulting in reduced trading and account closures. This risk may stem from business stretch in times of high volatility and increased client contact.
The service IG provides its clients is supported by client- facing teams which interact with clients directly and specific operational teams that support client account activity.
Business model risk
We define business model risk as the risks we face that arise from the nature of our business and our business model, including market risk, credit risk, liquidity risk and capital adequacy risk.
We accept some market risk to facilitate instant execution of client trades. We manage this market risk by internalising client flow through netting the exposure created through clients' trades so as to offset, and external hedging when the residual exposures reach defined limits. Our real-time market position-monitoring system allows us to constantly manage our market exposures against our market risk limits. If exposures exceed predetermined limits, we execute hedges to bring the exposure back within the limits.
IG has a market risk policy which sets out how our business manages its market risk exposures. The market risk policy incorporates a methodology for setting market risk limits, consistent with our risk appetite, for each financial market in which our clients can trade, as well as certain groups of markets or assets which we consider to be correlated. We determine these limits with reference to the expected liquidity and volatility of the underlying financial product or asset class, and represent the maximum (long or short) net exposure IG will hold without hedging.
We set our market risk limits with the objective of achieving the optimal efficiency between allowing client trades to be internalised, the cost of external hedging, and the variability of daily revenue. We work to manage market risk so that our trading revenue predominantly reflects client transaction fees net of hedging costs, and is not driven by market risk gains or losses.
Residual market risk can crystallise if a market 'gaps' or fluctuates sharply, which occurs when a price changes suddenly in a single large movement, sometimes at the opening of a trading day, rather than in small incremental steps. This can mean we're unable to execute or adjust our hedging in a timely manner, resulting in potential market risk exposure. This may create a gain or a loss.
We monitor our market risk exposures through regular scenario-based stress tests to analyse the impact of potential stress and market gap events, and take appropriate action to reduce our risk exposures and those of our clients.
IG faces the risk that either a client or a financial counterparty fails to meet their obligations to us, resulting in a financial loss.
As a result of offering leveraged trading products, we accept that client credit losses can arise as a cost of our business model. Client credit risk principally arises when a client's total funds deposited with IG are insufficient to cover any trading losses incurred. In addition, a small number of clients are granted credit limits to cover running losses on open trades and margin requirements.
We manage client credit risk through the application of our Client Credit Risk Policy.
We set client margin requirements that reflect the market price risk for each instrument, and use tiered margining so that larger positions are subject to proportionately higher margin requirements. We offer training and education to clients covering all aspects of trading and risk management, which encourages them to collateralise their accounts at an appropriate level in excess of the minimum requirement. In addition to cash funding by clients, we may also accept collateral in the form of shares from professional clients held in their IG stock trading account.
We further mitigate client credit risk by monitoring client positions in real time via the close-out monitor (COM), and by giving clients the ability to set a level at which an individual deal will be closed (the 'stop' level or 'guaranteed stop' level).
The COM automatically identifies accounts that have insufficient margin and triggers an automated process to close positions on those accounts. Where client losses are such that their total equity falls below the specified liquidation level, positions will be liquidated to bring the account back to within margin requirements, resulting in reduced credit risk exposure for IG.
In some jurisdictions, IG provides negative balance protection for retail clients, which is a guarantee that clients can't lose more than the total amount of equity held on their account. This, together with COM and client-initiated 'stops', results in the transfer of an element of the market risk from the client to IG. This market risk arises following the closure of a client position, as IG may hold a corresponding hedging position that will, assuming sufficient market liquidity, be unwound.
We have significant financial exposure to a number of financial institutions, owing to our placement of financial assets at banks and our hedging of market risk in the wholesale markets, which requires us to place margin with our hedging brokers.
We manage financial institution credit risk by applying IG's Financial Institution Counterparty Credit Risk Policy.
Financial institutional counterparties are subject to a credit review when we enter into a new relationship, and this is updated semi-annually (or more frequently as required, for example on changes to the financial institution's corporate structure). Proposed maximum exposure limits for these financial institutions, reflecting their credit rating and systemic position, are reviewed and approved by the Executive Risk Committee.
We actively manage our 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. As part of our management of concentration risk, we're also committed to maintaining multiple brokers for each asset class.
We're responsible, under various regulatory regimes, for the stewardship of client money and assets. These responsibilities include the appointment and periodic review of institutions where client money is deposited. Our general policy is that all financial institution counterparties holding client money accounts must have a minimum long-term credit rating of BBB-, with limits set depending on strength of credit rating. In a small number of operating jurisdictions where we maintain accounts to provide local banking facilities for clients, it can be problematic to find a banking counterparty satisfying these minimum rating requirements. In such cases, we may use a locally systemically important institution. These criteria also apply to IG's own bank accounts held with financial institutions.
In addition, the majority of our deposits are made on an overnight or breakable-term basis, which enables us to react immediately to any deterioration in credit quality. We only hold deposits of an unbreakable nature or requiring notice with a subset of counterparties that have been approved by the Executive Risk Committee.
Liquidity risk is the risk that IG is unable to meet its financial obligations as they fall due. We manage this by applying our Liquidity Risk Management Policy.
Our approach to managing liquidity is to ensure that we have sufficient liquidity to meet our broker margin requirements and other financial liabilities when due, under both normal circumstances and stressed conditions. These liquidity requirements must be met from our own liquidity resources, as IG does not use client money to fund our operations.
We hold liquid assets to: (i) enable the funding of broker margin requirements, (ii) ensure sufficient funds are held in non-UK entities, (iii) place appropriate prudent margins and buffers in segregated client money accounts, (iv) maintain a liquid assets buffer, (v) make dividend payments to shareholders, (vi) cover profits and losses on client trading and hedging positions, and (vii) make tax and other payments.
We manage liquidity within the UK Defined Liquidity Group (UK DLG) comprising IGM and IGI. The UK DLG includes IGM, IG's primary market risk management vehicle, which internalises and hedges market risk on behalf of the other entities in the Group. Key liquidity decisions are discussed at the Executive Risk Committee and then the Executive Committee, as necessary.
The UK DLG carries out an Individual Liquidity Adequacy Assessment (ILAA) each year. This assesses the key drivers of liquidity for the UK DLG and whether it has sufficient liquidity to continue in operation, including under liquidity stress. The Contingency Funding Plan (CFP), contained within the ILAA, identifies mitigation options and steps to improve the liquidity position in a stress scenario, through the implementation of management actions.
We use a number of KRIs for managing liquidity risk, including cash held in UK DLG bank accounts, forecasted UK DLG available liquidity and UK DLG stressed liquidity after management actions.
We're required to fund initial margin payments to brokers on demand. Broker initial margin requirements are dependent on client trading positions, the level of internalisation IG can achieve from client trading, the product mix in our hedging positions and any natural offset in correlated products within our hedging positions.
In addition to our liquid assets, we mitigate liquidity risk through access to committed, unsecured bank facilities. We reassess annually the appropriate level of committed facilities we have available, and draw down on the facility at least once during each year to test the process for accessing that liquidity.
The Group successfully managed its liquidity needs throughout the increased levels of client trading activity that was driven by the heightened and sustained levels of market volatility triggered by the Covid-19 pandemic. Liquidity is anticipated to remain strong.
We produce short-term liquidity forecasts and stress tests, so that appropriate management actions, including facility draw-down, can be taken ahead of a period of expected liquidity demands.
IG is exposed to interest rate risk through our debt and our holdings of cash and investments. The interest costs incurred on debt and interest income received through cash and investments are not material in respect of our overall costs and income. We consider the liquidity risk related to these instruments in the Group Liquidity Risk Management Policy.
Capital adequacy risk
IG operates authorised and regulated businesses worldwide, supervised by the FCA in the UK and by various regulators across other jurisdictions. As a result of this supervision, we are required to hold sufficient regulatory capital at both Group and individual entity levels to cover our risk exposures, valued according to applicable rules, and any additional regulatory financial obligations imposed.
We're supervised on a consolidated basis by the FCA. In addition to our two UK FCA-regulated entities, our operations in Australia, Japan, Singapore, South Africa, Bermuda, the United States of America, Cyprus, Germany, Switzerland and United Arab Emirates (Dubai International Financial Centre) are directly authorised by the respective local regulators. Individual capital requirements in each regulated entity are taken into account, among other factors, when managing the global distribution and level of our capital resources, as part of the Group Capital Management Framework.
IG manages capital adequacy risk through our Regulatory Capital Policy, and we work to ensure that at all times we hold sufficient capital to operate our business successfully and to satisfy all regulatory requirements. We manage our capital resources with the objectives of facilitating business growth, maintaining our dividend policy, and complying with the regulatory capital resources requirements set by our regulators around the world.
We undertake an annual Internal Capital Adequacy Assessment Process (ICAAP) through which we assess our capital requirements, by applying a series of stress-testing scenarios to our baseline financial projections. This assessment is reviewed and challenged by the ICAAP and ILAA Committee as well as the Board Risk Committee, which recommends the result to the Board for review and approval.
We operate a monitoring framework over our capital resources and minimum capital requirements daily, calculating the credit and market risk requirements arising on the exposures at the end of each business day. We also monitor internal warning indicators as a component of our Board Risk Dashboard, and any breaches are escalated to the Board as they occur, with a recommendation for appropriate remedial action.
Entity-level capital requirements monitoring and management is carried out locally according to each jurisdiction's requirements.
Operational risk is defined as the risk of loss resulting from inadequate or failed internal processes, people activities, technology or other operations, or external events.
Operational risk is managed by applying our operational Risk Management Framework. We continuously develop this framework to ensure visibility of risks and controls. We focus on clear accountability for controls and escalation and reporting mechanisms, through which risk events are identified and managed, and appropriate action is taken to improve controls.
We recognise that operational risk arises in the execution of all activities we undertake, and identify and manage operational risk in four categories: technology, people, process and external events.
Technology risk is the risk of loss caused by breakdown or other disruption to technology performance and service availability, or by information security incidents. It also includes new technology and technology that fails to meet business requirements.
We manage our technology risk through our Technology Risk Framework, which is overseen by the Technology Risk Committee. KPIs, incidents and outages are raised to this forum, comprising of IT and risk specialists. To manage cyber risk and external threats to our systems and data, we have the Information Security Forum, through which senior management is made aware of ongoing and potential threats, with policies and processes continuously being refreshed to ensure their validity within the evolving landscape. We have a 24/7 Security Operations Centre to review and triage information security incidents, and employ mitigation services for threats such as denial-of-service (DOS) attacks.
We undertake regular performance and stress-testing to ensure our platforms have sufficient headroom and resilience to perform in times of heightened volatility and increased demand. We also test our disaster recovery capability regularly to ensure that standby services are effective and minimise the impact to our services.
People risk is considered as the risk of a loss intentionally or unintentionally caused by an employee, such as employee error or misdeeds, or involving employees, such as in the area of employment disputes. It includes risks relating to employment law, health and safety, and HR practices. People risk includes the risk that IG is unable to attract and retain the staff it requires to operate its business successfully. In addition, we monitor for any strain on resources, ensuring sufficient staffing levels are in place for key business teams, so that processes are run effectively with controls maintained.
Process risk relates to the design, execution and maintenance of key processes - such as client onboarding, trade execution or financial reporting - including process governance, clarity of roles, process design and execution. It also covers record-keeping, regulatory compliance failures and reporting failures.
External risk is the risk of loss due to third-party relationships and outsourcing, damage to physical and non-physical property or assets from natural or non-natural external causes, and external fraud.
We continue to develop our Operational Risk Framework to ensure visibility of risks and controls. We focus on clear accountability for controls and escalation and reporting mechanisms, through which risk events are identified and managed and appropriate action is taken to improve controls.
Our Risk and Control Self-Assessment (RCSA) methodology focuses on areas of the business identified as a priority. We use an operational risk event self-reporting process which provides increased visibility over events and control actions to be taken. These are monitored through a consolidated Control Action List.
The Group Business Continuity Policy, and the framework to that document, provide a clear statement of our commitment to ensure that critical IG business activities can be maintained during a disruption.
IG recognises and manages the risk that our conduct may pose to the achievement of fair outcomes for clients, and to the sound, stable, resilient, and transparent operation of the financial markets. We have a conduct risk framework, and have implemented a conduct risk strategy that aims to analyse the conduct risks that may arise, and sets out how those risks are managed and mitigated. It also sets out specific controls used to manage conduct risk. We work to promote a positive, company-wide culture of good conduct as a competitive advantage and a means to differentiate our business clearly from those companies conducting themselves poorly or unethically. We also aim to ensure that all employees are aware of the importance of managing conduct risk through programme conduct risk training and awareness.
We manage and monitor the risk of clients failing to understand the functionality of our products and suffering poor outcomes. We recognise that some of our products are not appropriate for certain clients, and operate a process to identify potential new clients for whom the product may not be suitable. We support clients with education and training, and offer account types that limit a customer's risk. Client outcomes are monitored and reported to the Board.
Across the Group, IG employs a vulnerable client policy, which places responsibility on first-line client-facing staff to monitor for signs of vulnerability in clients (eg the type of language used by clients in their communications to us). If a client is deemed vulnerable their account will be closed. The number of clients who have closed accounts due to deemed vulnerability is tracked and monitored by the compliance team as part of a product governance management information suite. Compliance monitoring helps to identify lack of policy adherence, as well as any sudden increases in closures which may point to an issue with the way our products are being designed, marketed and sold.
In addition, the client team monitors the funding of client accounts in tandem with information held on clients regarding their financial position. This is done with the intention of identifying scenarios where affordability of losses may be called into question.
Markets and financial crime
We recognise the risk of causing poor market outcomes if proper controls are not in place, for example, to detect instances of market abuse which must then be reported on. Clients may also attempt to use IG to commit fraud or launder money, and we've designed our systems, controls and monitoring programmes with the aim of preventing and detecting such issues.
Culture and our people
We recognise the risk that the actions of our staff or IG's culture can result in poor outcomes for clients, or for the financial markets. We work to ensure that our staff are appropriately trained, managed and incentivised to ensure that their behaviour and activities don't inadvertently result in poor outcomes for clients or the markets. We also review remuneration policies and incentive schemes to ensure that they are appropriate and conducive to good conduct by staff.
STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE FINANCIAL STATEMENTS
The following statement is extracted from The Statement of Directors' Responsibilities on page 143 of the Annual Report and is repeated here solely for the purpose of complying with DTR 6.3.5. The Statement relates to the full Annual Report and not the extracted information presented in this announcement of Full Year Results announcement.
The Directors are responsible for preparing the Annual Report and the 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 Company Financial Statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by
the European Union.
Under company law, the 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 the Company, and of the profit or loss of the Group and Company for that period. In preparing the Financial Statements, the Directors are required to:
• Select suitable accounting policies and apply them consistently
· State whether applicable IFRSs as adopted by the European Union have been followed, subject to any material departures disclosed and explained in the Financial Statements
· Make judgments 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 the Company will continue in business
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group 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 and, as regards the Group Financial Statements, Article 4 of the International Accounting Standards Regulation.
The Directors are also 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 responsible for the maintenance and integrity of the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
The Directors consider that the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable, and provides the information necessary for shareholders to assess the Group and Company's position and performance, business model and strategy.
Each of the Directors, whose names and functions are listed in the Directors' Report confirms that, to the best of their knowledge:
· The Group and Company Financial Statements, which have been prepared in accordance with IFRSs as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit of the Group and profit of the Company
· The Directors' 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 and Company's Auditors 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 and Company's Auditors are aware of that information
On behalf of the Board
Chief Executive Officer
23 July 2020
For further information, please contact:
Liz Scorer, Head of Investor Relations 0044 20 7573 0727
Ramon Kaur, Head of Communications 0044 20 7573 0060
Ed Berry 0044 20 3727 1141 / 1046
IG empowers informed, decisive, adventurous, people to access opportunities in over 17,000 financial markets. With a strong focus on innovation and technology, the company puts client needs at the heart of everything it does.
IG's vision is to provide the world's best trading experience. Established in 1974 as one of the world's first providers of financial derivatives to retail traders, it continued leading the way by launching the world's first online and iPhone trading services.
IG is an award-winning, multi-product trading company which allows retail, professional and institutional clients to trade 24 hours a day, 7 days a week*. IG is the world's No.1 provider of CFDs** and a global leader in forex. It provides leveraged services with the option of limited-risk guarantees and offers an execution-only stock trading service in the UK, Australia, Germany, France, Ireland, Austria and the Netherlands. IG has a range of affordable, fully managed investment portfolios, which provide a comprehensive offering to investors and active traders.
IG is a member of the FTSE 250, with offices across Europe, including a Swiss bank, Africa, Asia-Pacific, the Middle East and North America. IG Group Holdings plc holds a long-term investment grade credit rating of BBB- with a stable outlook from Fitch Ratings.
*Excluding 10pm Friday (GMT) to 8am Saturday (GMT)
** Based on revenue excluding FX (from published financial statements, June 2020)
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