IG, one of the largest forex, CFD and spread betting (UK only) brokers, announced it stops offering its binary products across the world, except in the US and Japan. The broker, however, clarifies that the binary Sprints product (the short term up/down binary options, categorized as a complex financial product under MiFID and regulated as a gaming product in UK) will be unavailable only for new clients, while the existing ones will continue to use it.
“IG recognises the fact that this is a limited risk product and is popular with current clients so will continue to make it available to them on the platform,” the company said. “The Sprints product generates around £15 million of annualised revenue.”
Considering the bad press binary options products continue to get, IG's move is easily explicable, even more so having in mind the new regulatory developments
At the same time IG Group reported record net trading revenue for the six months ended 30 November 2016 (H1 FY17). According to the company statement, it rose 14% on the same period in the prior year to £244.9 million. In comparison, in 2016 it was £214.8 million.
The profit before tax in the period also rose – by 7%, to £105.2 million and so did the profit after tax. It increased 9% from the same period of previous year, to £83.3 million,
IG's operating expenses also posted an increase – of 23%, with more than half of the absolute rise due to an increase in marketing investment. Excluding those, expenses were up 13%.
In its report IG bragged it recently obtained another license in the UK – for a discretionary managed investment service. IG will start by offering a range of passive ETF-based investment portfolios in partnership with BlackRock and thus will expand its tradable asset portfolio.
“This has been another good six months for the business, with record revenue, a new high in active client numbers and ongoing success in attracting and developing the next generation of traders,” said Peter Hetherington, Chief Executive of IG. “I am extremely proud of what we have achieved.”
IG Group was established more than 40 years ago and was the first financial services provider in the UK to launch spread betting. It also offers trading in forex, CFDs, stocks, bonds and cryptocurrencies like Bitcoin.
IG is regulated by UK’s Financial Conduct Authority (FCA), but its subsidiaries are also regulated by the relevant authorities in the countries where they operate (Australia, Japan, South Africa, UAE and Singapore). Besides, IG is listed on the LSE, and is a member of the FTSE 250.