CMC Markets
Encyclopedia
CMC Markets is a UK
based financial derivatives
dealer
. The company offers online trading in spread betting
, Contract for difference
(CFDs) and Foreign Exchange
(Forex) across world markets. While large part of its activity is in the UK, Europe and Australia, it has presence internationally.
under the name 'Currency Management Corporation'. The name was later abbreviated to CMC and then changed to CMC Markets in September 2005.
CMC Markets also operated the brand name deal4free.com from 2001 to 2005. The deal4free brand was designed to promote the zero commission charge service which it used primarily for its spread betting business in the UK. Commissions were later re-introduced and this brand was a dropped as part of the re-branding in September 2005.
In 1992, CMC Markets became authorised and regulated in the UK by the AFBD which later became the Financial Services Authority
(FSA)
In 1996, the company launched a real-time FX trading platform and has made claims to have done the first FX deal on-line over the internet. It is hard to verify, but even if it was not true, CMC Markets was certainly one of the first companies to offer on-line trading over the internet. As well as being a pioneer in internet trading technology with its MarketMaker software platform.
The software was developed by Information Internet Limited a sister company jointly owned by Peter Cruddas and the two developers that designed and built the first version of the software, Terry Johnston and Ben Fisher. From 1996 to 2000 Information Internet as well as supplying CMC Markets, sold the software to a small number of banks. In 2000 Peter Cruddas bought out the other owners, made the software exclusive for CMC Markets and the remaining parts of Information Internet became the internal IT function of CMC Markets.
In 2000, CMC Markets began to offer Contracts for difference (CFDs) and the following year it introduced on-line Spread Betting on financial markets. These two products now make up the bulk of CMC Markets business.
In 2002, CMC Markets opened its first Asian office in Sydney
, Australia
followed in 2005 by Beijing
and Hong Kong
.
The first European office was opened in Frankfurt
in 2005, followed by Stockholm
in 2007 and Madrid
in 2008.
The first North American office was opened in 2003 in New York
this was followed by the acquisition of Canadian broker Shorecan Index which became its Toronto
office in 2005. CMC Markets subsequently pulled out of the US
market and closed its New York office in 2008. Primarily as it was unable to offer its main CFD and spread betting products there due to regulatory restrictions.
CMC Markets expanded quickly from 2002 to 2007 and opened offices in a large number of countries as well as growing the spread betting business in the UK and CFDs internationally. It offered services in a number of different languages and was one of the first CFD provider in Australia
to offer full Chinese
-speaking service. A service they expanded globally.
In 2006 Peter Cruddas planned to float the company and the company had been prepared for IPO. However the IPO was cancelled at the last minute with Peter Cruddas citing market conditions.
In 2007 it bought financial media and technology company 'digital look', which ran the financial information site www.digitallook.com as well as selling financial data to third party sites. The company was merged into CMC markets main operations in London, but continues to run the web site and data services for third parties. In 2008 CMC Markets bought the Australian stock broker 'Andrew West', this was merged with the CMC Markets Australian operation and re-named CMC Markets StockBroking. This continues to offer physical share broking services in Australia.
In 2007 Goldman Sachs
bought a 10% stake in the company and the due diligence that it did as part of the purchase resulted in a overhaul of the company direction.
In 2008 and 2009 CMC Markets saw profits decline with GFC, in response Peter Cruddas changed his management team, let 350 staff go and closed seven offices.
In 2010, CMC Markets launched its new trading platform and iphone application to the UK market. The new trading software featured a new pricing engine with 100% automated execution, prices quoted to additional decimal points and no re-quotes.
In 2011 the Digital Look business unit was sold to the Spanish based Web Financial Group.
CMC Markets runs most of its operations from its head office in London and runs a trading desk in London and in Singapore.
CFD and Spread Betting industry as providers have no duty to report trading volumes or transactions. In 2009 some industry participants commissioned a survey to look at the UK market and results indicated that CMC Markets market share in 2008 was lower than its main competitor.
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
based financial derivatives
Derivative (finance)
A derivative instrument is a contract between two parties that specifies conditions—in particular, dates and the resulting values of the underlying variables—under which payments, or payoffs, are to be made between the parties.Under U.S...
dealer
Broker-dealer
A broker-dealer is a term used in United States financial services regulations. It is a natural person, a company or other organization that trades securities for its own account or on behalf of its customers....
. The company offers online trading in spread betting
Spread betting
Spread betting is any of various types of wagering on the outcome of an event, where the pay-off is based on the accuracy of the wager, rather than a simple "win or lose" outcome, such as fixed-odds betting or parimutuel betting. A spread is a range of outcomes and the bet is whether the outcome...
, Contract for difference
Contract for difference
In finance, a contract for difference is a contract between two parties, typically described as "buyer" and "seller", stipulating that the buyer will pay to the seller the difference between the current value of an asset and its value at contract time...
(CFDs) and Foreign Exchange
Foreign exchange market
The foreign exchange market is a global, worldwide decentralized financial market for trading currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends...
(Forex) across world markets. While large part of its activity is in the UK, Europe and Australia, it has presence internationally.
History
The company was founded in 1989 by Peter Cruddas as a Foreign Exchange market makerMarket maker
A market maker is a company, or an individual, that quotes both a buy and a sell price in a financial instrument or commodity held in inventory, hoping to make a profit on the bid-offer spread, or turn. From a market microstructure theory standpoint, market makers are net sellers of an option to be...
under the name 'Currency Management Corporation'. The name was later abbreviated to CMC and then changed to CMC Markets in September 2005.
CMC Markets also operated the brand name deal4free.com from 2001 to 2005. The deal4free brand was designed to promote the zero commission charge service which it used primarily for its spread betting business in the UK. Commissions were later re-introduced and this brand was a dropped as part of the re-branding in September 2005.
In 1992, CMC Markets became authorised and regulated in the UK by the AFBD which later became the Financial Services Authority
Financial Services Authority
The Financial Services Authority is a quasi-judicial body responsible for the regulation of the financial services industry in the United Kingdom. Its board is appointed by the Treasury and the organisation is structured as a company limited by guarantee and owned by the UK government. Its main...
(FSA)
In 1996, the company launched a real-time FX trading platform and has made claims to have done the first FX deal on-line over the internet. It is hard to verify, but even if it was not true, CMC Markets was certainly one of the first companies to offer on-line trading over the internet. As well as being a pioneer in internet trading technology with its MarketMaker software platform.
The software was developed by Information Internet Limited a sister company jointly owned by Peter Cruddas and the two developers that designed and built the first version of the software, Terry Johnston and Ben Fisher. From 1996 to 2000 Information Internet as well as supplying CMC Markets, sold the software to a small number of banks. In 2000 Peter Cruddas bought out the other owners, made the software exclusive for CMC Markets and the remaining parts of Information Internet became the internal IT function of CMC Markets.
In 2000, CMC Markets began to offer Contracts for difference (CFDs) and the following year it introduced on-line Spread Betting on financial markets. These two products now make up the bulk of CMC Markets business.
In 2002, CMC Markets opened its first Asian office in Sydney
Sydney
Sydney is the most populous city in Australia and the state capital of New South Wales. Sydney is located on Australia's south-east coast of the Tasman Sea. As of June 2010, the greater metropolitan area had an approximate population of 4.6 million people...
, Australia
Australia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...
followed in 2005 by Beijing
Beijing
Beijing , also known as Peking , is the capital of the People's Republic of China and one of the most populous cities in the world, with a population of 19,612,368 as of 2010. The city is the country's political, cultural, and educational center, and home to the headquarters for most of China's...
and Hong Kong
Hong Kong
Hong Kong is one of two Special Administrative Regions of the People's Republic of China , the other being Macau. A city-state situated on China's south coast and enclosed by the Pearl River Delta and South China Sea, it is renowned for its expansive skyline and deep natural harbour...
.
The first European office was opened in Frankfurt
Frankfurt
Frankfurt am Main , commonly known simply as Frankfurt, is the largest city in the German state of Hesse and the fifth-largest city in Germany, with a 2010 population of 688,249. The urban area had an estimated population of 2,300,000 in 2010...
in 2005, followed by Stockholm
Stockholm
Stockholm is the capital and the largest city of Sweden and constitutes the most populated urban area in Scandinavia. Stockholm is the most populous city in Sweden, with a population of 851,155 in the municipality , 1.37 million in the urban area , and around 2.1 million in the metropolitan area...
in 2007 and Madrid
Madrid
Madrid is the capital and largest city of Spain. The population of the city is roughly 3.3 million and the entire population of the Madrid metropolitan area is calculated to be 6.271 million. It is the third largest city in the European Union, after London and Berlin, and its metropolitan...
in 2008.
The first North American office was opened in 2003 in New York
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...
this was followed by the acquisition of Canadian broker Shorecan Index which became its Toronto
Toronto
Toronto is the provincial capital of Ontario and the largest city in Canada. It is located in Southern Ontario on the northwestern shore of Lake Ontario. A relatively modern city, Toronto's history dates back to the late-18th century, when its land was first purchased by the British monarchy from...
office in 2005. CMC Markets subsequently pulled out of the US
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
market and closed its New York office in 2008. Primarily as it was unable to offer its main CFD and spread betting products there due to regulatory restrictions.
CMC Markets expanded quickly from 2002 to 2007 and opened offices in a large number of countries as well as growing the spread betting business in the UK and CFDs internationally. It offered services in a number of different languages and was one of the first CFD provider in Australia
Australia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...
to offer full Chinese
Chinese language
The Chinese language is a language or language family consisting of varieties which are mutually intelligible to varying degrees. Originally the indigenous languages spoken by the Han Chinese in China, it forms one of the branches of Sino-Tibetan family of languages...
-speaking service. A service they expanded globally.
In 2006 Peter Cruddas planned to float the company and the company had been prepared for IPO. However the IPO was cancelled at the last minute with Peter Cruddas citing market conditions.
In 2007 it bought financial media and technology company 'digital look', which ran the financial information site www.digitallook.com as well as selling financial data to third party sites. The company was merged into CMC markets main operations in London, but continues to run the web site and data services for third parties. In 2008 CMC Markets bought the Australian stock broker 'Andrew West', this was merged with the CMC Markets Australian operation and re-named CMC Markets StockBroking. This continues to offer physical share broking services in Australia.
In 2007 Goldman Sachs
Goldman Sachs
The Goldman Sachs Group, Inc. is an American multinational bulge bracket investment banking and securities firm that engages in global investment banking, securities, investment management, and other financial services primarily with institutional clients...
bought a 10% stake in the company and the due diligence that it did as part of the purchase resulted in a overhaul of the company direction.
In 2008 and 2009 CMC Markets saw profits decline with GFC, in response Peter Cruddas changed his management team, let 350 staff go and closed seven offices.
In 2010, CMC Markets launched its new trading platform and iphone application to the UK market. The new trading software featured a new pricing engine with 100% automated execution, prices quoted to additional decimal points and no re-quotes.
In 2011 the Digital Look business unit was sold to the Spanish based Web Financial Group.
Operations
CMC Markets operates and has offices in the UK, Australia, Germany, New Zealand, Singapore, Spain, Ireland, Italy, Japan, China, Sweden, Norway, Denmark, Austria, France and Canada.CMC Markets runs most of its operations from its head office in London and runs a trading desk in London and in Singapore.
Competition
CMC Markets is one of the companies that launched CFDs products to the retail market in 2000 and is one of the largest CFD providers globally. Actual market share is difficult to confirm as there is no reliable independent data in the over-the-counterOver-the-counter (finance)
Within the derivatives markets, many products are traded through exchanges. An exchange has the benefit of facilitating liquidity and also mitigates all credit risk concerning the default of a member of the exchange. Products traded on the exchange must be well standardised to transparent trading....
CFD and Spread Betting industry as providers have no duty to report trading volumes or transactions. In 2009 some industry participants commissioned a survey to look at the UK market and results indicated that CMC Markets market share in 2008 was lower than its main competitor.