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Igniting change.
Accelerating growth.
IG GROUP HOLDINGS PLC
ANNUAL REPORT 2022
Igniting change.
Accelerating growth.
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
IG Group is a leading global
fintech, led by a clear purpose
to power the pursuit of financial
freedom for the ambitious.
Introduction
At a Glance 2
Chair’s Statement 4
Chief Executive Officer’s Statement 6
Strategic Report
Our Purpose and Values 10
Key Trends Likely to Affect Our Business 12
Business Model 14
Key Performance Indicators (KPIs) 16
Strategic Update 18
Stakeholder Engagement 22
Section 172(1) Statement 24
ESG at a Glance 26
ESG Report 27
Chief Financial Officer’s Statement 36
Business Performance Review 38
Risk Management 46
Going Concern and Viability Statement 54
Governance Report
Governance at a Glance 56
Chair’s Introduction to Corporate Governance 58
The Board 60
Governance Framework 64
Board Governance 66
Nomination Committee Report 76
Directors’ Remuneration Report and Policy 79
Remuneration At a Glance 82
Audit Committee Report 102
ESG Committee Report 110
Board Risk Committee Report 112
Directors’ Report 115
Statement of Directors’ Responsibilities 118
Independent Auditors’ Report 119
Financial Statements 130
Shareholder and Company Information
Shareholder and Company Information 192
Appendices 194
Group-wide KPI Definitions 196
AT A GLANCE
PG. 02
THIS REPORT IS ONLINE
IGGROU P.COM
Introduction
1
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Financial Highlights FY22
Total revenue
1
£973.1m
(2 0 21: £837.6m)
Basic earnings per share
3
92.9p
(2021: 99.8p)
Total dividend per share
44.2p
(2021: 43.2p)
1. Total revenue includes £5.8 million foreign exchange hedging gain associated with the financing of the tastytrade acquisition. On an adjusted basis,
total revenue was £967.3m.
2. Profit before tax includes £33.7 million of costs and recurring non-cash costs associated with the tastytrade acquisition and integration and
£3.3million relating to the sale of Nadex and Small Exchange. On an adjusted basis, profit before tax was £494.3m.
3. Earnings per share include £1.0 million of accelerated financing expense associated with the debt issuance. On an adjusted basis, basic earnings per
share was 96.3 pence.
4. The Group uses alternative performance measures to provide additional information on the performance of the business. For more detail, see our KPI
definition on page 196.
Profit before tax
2
£ 477.0 m
(2021: £446.0m)
Net own funds generated from operations
£ 437.3m
(2021: £422.8m)
KPIs
PG. 16
BUSINESS PERFORMANCE REVIEW
PG. 38
LONDON
HQ
CSRC REPRESENTATIVE OFFICE
SALES OFFICE OPERATIONAL LOCATION
MADRID
CHICAGO
PARIS
ZURICH
STOCKHOLM
SYDNEY
MILAN
HAMILTON
AMSTERDAM
GENEVA
LIMASSOL
KRAKÓW
DUBAI
HONG KONG
BANGALORE
SINGAPORE
MELBOURNE
SHENZHEN
NEW YORK
SHANGHAI
TOKYO
FRANKFURT
JOHANNESBURG
2
INTRODUCTION
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
IG Group is a purpose-led global fintech
that has been at the forefront of trading
innovation since 1974.
Our clients are ambitious, and are
looking to take control of their financial
future. Our award-winning products, our
educational content and our platforms
empower these ambitious people the
world over to unlock opportunities
around the clock, giving them access
toaroun to around 19,000 financial markets.
IG Group Holdings plc (IGGH or the
Company) is an established member of
the FTSE 250 and was given a long-term
investment grade credit rating of BBB–
with a stable outlook from Fitch Ratings
in September 2021.
Our geographies
Employees across 24 offices
2,507
Active clients in FY22
38 1 ,000+
Markets offered to trade
~19, 000
At a Glance
Over-the-counter (OTC) 84%
ETD 13%
Stock trading 3%
3
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Powering the pursuit
of financial freedom
for the ambitious
Our products Our brands Our proposition
Hours of educational content
4,000+
Post-tax profits pledged to charities
1%
Offices worldwide
24
Multiple growth levers
in a significant and
growing global market
High-quality client base,
driving sustained and
enduring value
Diversified business by
geography and product
Strong cash flow and
liquidity with robust
riskmanagement
Market-leading
content,technology
and platforms
Our purpose
4
INTRODUCTION
This has been an
exciting year of
growth and
progress as we
live our purpose.”
Mike McTighe
Chair
The Group has had an exceptional
year, both in terms of the record
performance delivered and the strategic
progress made. I am extremely proud
of the ongoing transformation of
the business, and I am confident we
are ideally placed to take advantage
of the opportunities ahead.
The acquisition of tastytrade, Inc.
(tastytrade) during the year provided
a step-change towards achieving
our diversification strategy, while the
sale of North American Derivatives
Exchange, Inc. (Nadex) and Small
Exchange Inc. (Small Exchange)
exemplifies our focus on areas where
we see significant room for growth.
Our clear purpose and strategy has
guided our decision making in the
year, including the formalisation of our
Capital Allocation Framework, which
includes our pledge to donate the
equivalent of 1% of post-tax profits to
charitable causes each year from 2022
to 2025, subject to Board approval.
Record performance
The record performance is particularly
pleasing given the exceptional activity
levels seen during the pandemic.
We differentiate ourselves by the
quality of our clients, and this in
turn differentiates our results.
Chair’s Statement
5
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
We are able to continually attract and
retain these high-quality clients for
three key reasons: our product offering,
trade execution and client service. Our
ever-growing client base continues
to find opportunities to trade, and
this underpins our business growth.
Performance in some of our
regions such as the US, Japan
and our pan-European multi-
lateral trading facility brings
diversification and offers significant
strategic growth opportunities.
Focus on capital stewardship
Over the course of the last 12
months, the Board has been focused
on responsible capital stewardship,
balancing regulatory capital and
liquidity requirements, the need for
investment in the future growth of the
business, and returns to shareholders.
As a result, in addition to the
comprehensive debt refinancing
completed during the year, we have
established a new Capital Allocation
Framework which clearly sets out
the basis on which the Board will
make capital allocation decisions.
In the framework, we have stated our
new policy of an regular distributions of
around 50% of adjusted profit after tax.
In accordance with this new
framework, we also announced our
intention to return surplus capital to
shareholders via the repurchase of
ordinary shares up to an aggregate
purchase price of up to £150 million.
We aim to substantially complete this
buyback programme within FY23.
We will continue to ensure that we
hold sufficient capital resources for
regulatory purposes and to support
business growth, though we will avoid
holding excess capital in the business.
Continuing to strengthen our
leadership
During the year, we welcomed Susan
Skerritt (appointed to the Board in July
2021) as a Non-Executive Director.
Susan is an established Non-Executive
Director and a US resident, and brings
significant financial markets experience
of working with US-based companies
and regulators. That experience and
local knowledge is already proving
invaluable as we increase our focus
on the US. Susan is a member of
both the IG North American Board
(IGNA) and the IG Group Holdings
(IGGH) Board Risk Committee.
In support of the acquisition of
tastytrade, the Board has taken the
opportunity to review the governance
arrangements in the US to optimise
oversight and support of the US
companies by the wider Group. Having
taken soundings from our external
advisers, the Board concluded that a
North American Board was appropriate,
re-purposing a pre-existing Board to
focus in particular on governance,
regulation and compliance.
Supporting our people
The past couple of years have
undoubtedly been a very challenging
time for many, due to several factors
including the global pandemic,
followed by conflict in Ukraine.
Our people have again proven their
dedication and commitment to our
business, our clients, and society.
Collectively, we have taken many steps
to address these challenges, both for
our employees and for the communities
in which we operate. This has been
a combination of ESG programmes
through our Brighter Future Fund and
employee assistance programmes.
In turn, our employees have also
stepped up and provided support to
those facing undue hardships, which
has been incredibly moving and
inspiring. We will continue with these
endeavours as part of our holistic aim
to remain a good corporate citizen.
This has been an exciting year of growth
and progress as we live our purpose.
Mike McTighe
Chair
20 July 2022
6
INTRODUCTION
Chief Executive Officer’s Statement
Today, we are
apurpose-led
fintech delivering
outstanding
results.”
June Felix
Chief Executive Officer
Over the last 12 months we have
delivered exceptional results.
We have achieved outstanding financial
performance while continuing our
journey to become a more diversified,
innovative, global fintech. We have made
great strides since we announced our
strategy in 2019, and we now see the
emergence of a materially evolved
organisation. Today, we are in a very
strong position in multiple markets,
offering our ambitious clients a great
range of products to meet their needs.
Through our organic and inorganic
regional expansion, we have created
substantial scope for growth in
significant and larger addressable
markets. I strongly believe that we are
better positioned for future growth than
ever before.
Our ability to perform in changing
macro conditions and uncertain markets
is the result of the disciplined execution
of our strategy, and our business model.
We are not only increasing revenues but
diversifying the sources of our revenues.
This positions us well for long-term,
sustainable growth.
The performance we have achieved has
not been replicated consistently across
our peer group and is a testament to
several key factors that differentiate
Key achievements in FY22:
¼ Delivered a record financial performance
¼ Strengthened our strategic position in two
of the world’s largest financial markets
¼ Expanded our large, global, high-quality
clientbase
¼ Committed 1% of post-tax profits to charitable
causes each year from 2022 to 2025
¼ Completed our first corporate bond issuance
¼ Announced our new Capital Allocation
Framework and share buyback programme
7
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
us from others in the sector. These
include the size and quality of our client
base of ambitious, active traders, our
proven market risk management model,
and most of all, the dedication and
commitment of our people, who strive
every day to provide a better experience
for our clients and for the communities
in which we operate. Iwould like to
begin by expressing my thanks to
everyone at IG Group as we take every
step together to live ourpurpose.
I’m proud to be able to share how we are
delivering on our promises.
A purpose-led, global fintech
We launched our new purpose over
ayear ago, crystallising our vision to
power the pursuit of financial freedom
for the ambitious. This ’North Star’
ensures we put our clients at the heart
of everything we do and support them
on their trading and investing journeys.
Today, we are a purpose-led fintech
delivering outstanding results.
With operations in 20 countries across
five continents, we are delivering the
world’s best technology, platforms,
products and exchanges – opening up
awider range of trading and investment
opportunities to ambitious people
around the world.
IG Group has a long history of innovating
to meet market needs and to best serve
clients. Over the last five decades,
wehave evaluated how the financial
landscape has evolved and we have
moved in tandem by creating relevant
and responsive products. We are
already well known for our OTC
derivatives products, allowing traders to
take advantage of changes in an asset’s
price without owning the asset itself. We
enable clients to trade in around 19,000
markets encompassing indices,
individual equities, commodities and
foreign exchange.
Our heritage embodies the spirit of
our future – to consistently determine
how we can best serve self-directed
investors who want to own their financial
futures. To keep meeting our clients’
needs, we continually evaluate the
changing landscape and respond in
kind with relevant offerings. We have
evolved from a UK-centric, OTC-
focused firm into a global business,
strategically and methodically
expanding by product and by region,
especially in the United States and
Asia, which are both large markets with
significant growth opportunities. We’ve
achieved this through a combination
of organic and inorganic strategies.
Our business in Japan shows how
we applied our winning formula of
delivering innovative products tailored
for local needs backed by our global
platforms, expertise and resources.
Revenues have increased more than
400% in that business from FY19,
and it continues to go from strength
to strength. As a result, Japan is
now one of our largest markets.
Acquiring tastytrade last year enabled
us to accelerate our strategy to expand
into exchange-traded products
and better establish our presence
in the US, the largest retail financial
market in the world. The addition
of tastytrade significantly increases
our total addressable market to over
21 million active traders, by adding
14 million active traders of options,
futures and cash equities in the US.
This large market of self-directed,
ambitious investors has over 100 million
accounts with the main US brokerages.
In addition, we have a stock trading and
investments business which offers
clients the opportunity to buy and sell a
range of over 12,000 global shares and
exchange traded funds with competitive
and transparent transaction fees. We
believe our success in gaining clients
during the last few years shows that this
can be another potential growth lever in
the future.
Playing our part in our
communities
We strive to make a difference for our
clients and for the wider communities
inwhich we operate.
We recognise our responsibilities as
a global corporate citizen, and Iam
particularly proud of the steps we
have taken to further embed our
environmental, social and governance
(ESG) strategy across our business.
In December 2021, we pledged to
contribute the equivalent of 1% of
our post-tax profits to charitable
causes from 2022 to 2025, subject
to ongoing Board approval.
This new pledge is part of our ongoing
commitment to play a part in helping
improve the futures of young people
around the world – inspiring them to
explore possibilities and reach their
potential in life through learning.
The 1% commitment is a natural step
forour Brighter Future Fund, which
wasestablished in 2020 with an initial
£5million contribution from IG. The
majority of our new 1% pledge will be
our mechanism for making regular and
substantial payments into this fund each
year until 2025. The Brighter Future
Fund will support projects around the
globe that align with the themes of
empowerment through education and
the environment.
This builds on our strong track record of
community outreach, where the level of
our commitment continues to set us
apart from our peers. Key highlights
from the last year include:
¼ Continuing to work closely with our
key strategic partner Teach For All
and members of their network,
including Teach First, Teach For
Poland and Teach For India. We
support these charities as they fight
to make the education system work
for every child
¼ We are entering a partnership with
UK-based charity Learning with
Parents which focuses on financial
literacy and, in particular, looks at
ways to help parents support their
child’s financial education
8
INTRODUCTION
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Chief Executive Officer’s Statement continued
¼ A new partnership with Chance To
Shine, a programme which helps
young girls to become future leaders
through the transformative power
ofcricket
In recognition of our credentials as a
responsible and sustainable business,
IGhas become a constituent of the
FTSE4Good Index.
Delivering on our promises
Through the concerted effort of my
talented and valued colleagues, we
made good on our commitment to
become a more global, diversified and
sustainable business.
We delivered strong strategic progress
across the Group, with stand out
performance in product diversification
and in extending our platform into new
markets. This focus on growth and
diversification has seen us double our
revenues since FY19, with great
progress made across the key
geographical regions in which we
nowoperate.
We also continue to make progress in
Europe with Spectrum, our Frankfurt-
based pan-European trading venue
forsecuritised derivatives. This year
Spectrum welcomed two additional
brokers and introduced further trading
opportunities on turbo certificates with
selected equities and cryptocurrencies.
Further growth is expected in FY23 and
beyond as we integrate additional
third-party brokers, as well as integrate
two tier-1 European banks as product
issuers later this year.
In Japan, we have enjoyed considerable
recent success, tailoring our offering to
best suit the needs and wants of local
clients. Our ability to localise continues
to pay dividends, allowing us to leverage
our platform and technology capability
across different markets.
This approach of focusing on growth
and expansion, while being disciplined in
the strategic decisions and investments
we choose to make, has ensured we are
outperforming against the strategy we
set ourselves and sets an even stronger
foundation from which we can grow.
This means being strategic and focused
on what we decide to do and also on
what we decide not to do.
We completed the sale of two
businesses, Nadex and Small Exchange,
in March 2022 for $216 million,
representing a significant return on
investment for these businesses. This
sale gives us the opportunity to reinvest
into our businesses, expanding our
efforts in tastytrade and in other related
opportunities as they arise.
Foundations for success
Since our earliest days, we have
delivered innovative financial solutions
for our clients. This success is
underpinned by our people, our
expertise and our focus on continuous
improvement and innovation.
This year, we have made some
keyleadership changes to further
strengthen our expertise and leverage
our capabilities. To represent our
investment in key regions, we have
appointed new regional CEOs to drive
success in our three key geographies:
Matt Macklin is the regional CEO for the
UK, APAC+ and Emerging Markets, Matt
Brief leads as regional CEO for Europe,
and Joe (JJ) Kinahan has been appointed
as CEO for North America. They all bring
significant experience and expertise to
our regions and to the Executive
Committee team.
By combining global resources and
regional expertise, we plan to create
more innovative, distinctive solutions
that meet clients’ needs at a more
targeted level. We will take advantage
ofour global platform and local insights
to deliver sustainable growth through
both organic and selective inorganic
investment. Additionally, we have a keen
eye on expanding and fulfilling our ESG
goals. By keeping those goals running in
parallel we believe this will ensure we
excel in both the short and long term.
Capital management and liquidity
Our balance sheet is strong, and we are
a highly cash-generative business.
During the year, we successfully
completed a comprehensive debt
refinancing exercise and implemented
anew long-term funding structure.
These important steps will provide
additional, significant levels of liquidity
to further support our strategic growth
ambitions: lengthening the maturity of
our debt facilities, enhancing our
financial flexibility, and providing
material headroom within our total
facilities. The refinancing involved our
first corporate bond issue of an
investment-grade, seven-year, £300
million, senior unsecured note, and a
new £300 million committed revolving
credit facility, with an initial maturity of
three years.
We have also announced our new
Capital Allocation Framework, setting
out how it supports our strategic goals,
as well as outlining the thinking behind
it. This is an important step in shaping
the business, and positioning us for
thefuture.
June Felix
Chief Executive Officer
20 July 2022
9
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Capital Allocation Framework
Our Capital Allocation Framework balances
delivering sustainable returns to shareholders
with ongoing investment in the business to
execute our growth strategy.
The Group will retain sufficient capital as
required to maintain a strong balance sheet,
toinvest in organic growth and fulfil our
citizenship commitment of allocating 1% of
adjusted profit after tax to charitable causes,
prior to the declaration of Regular Distributions.
Following these allocations of capital,
theGroup will consider inorganic growth
investments and Additional Distributions
toshareholders of capital that are surplus
toour requirements.
Regular distributions
The Board has adopted a sustainable,
progressive dividend policy. This is
expected to deliver (1) modest annual
growth in the dividend per share over
the current planning cycle, and (2) an
interim dividend set at 30% of the prior
year, full year dividend.
The Board expects aggregate regular
annual distributions to shareholders of
around 50% of adjusted profit after tax
each year. The Group will retain an
element of discretion on the methods
ofreturn which may include share
buybacks or special dividends.
The flexibility provided by this approach
is intended to mitigate the impact of
potential short-term fluctuations in the
business cycle on the annual ordinary
dividend per share paid to shareholders.
Additional distributions
The Board will continue to keep the level
of capital on the balance sheet under
regular review.
Capital that is not required to fund
either planned business investment or
potential inorganic investment to
accelerate delivery of the Group’s
strategic plans will be periodically
returned to shareholders as Additional
Distributions, over and above Regular
Distributions. Such distributions will
bethrough share buybacks or special
dividends with the Board considering
anumber of factors to determine the
mechanism which is most accretive to
shareholder value.
1. Regulatory capital
requirements
2. Organic investment
togrowth
3. Commitments
on citizenship
4. Regular
distributions
5. Inorganic
investments
6. Additional shareholder
returns
Hold an appropriate level of
regulatory capital and liquidity.
Generate operating return
on existing capital and invest
organically for future growth.
Commitment to donate 1% of
profit after tax to charitable causes
until 2025.
Regular distribution of around 50%
of adjusted profit after tax,
delivering modest growth in
dividend per share.
Ongoing disciplined assessment
of potential acquisitions.
Return of surplus capital not
required for other priorities.
IG GROUP HOLDINGS PLC ANNUAL REPORT 202210
STRATEGIC REPORT
Powering the pursuit
of financial freedom
for the ambitious
Our purpose
Our blueprint for the future.
It will deliberately stretch us for years to come.
It provides us with a fundamental question
against which to assess decisions – ‘is what
we’re doing powering the pursuit of financial
freedom for the ambitious?’. It requires us to
have a deep understanding of our clients, and
to diversify into new markets and products.
As we make further progress towards achieving
our purpose, we will enable more people to
become financially self-reliant and therefore
make a greater contribution to society.
Our Purpose and Values
FIND OUT MORE AT
IGGROUP.COM/ABOUTUS
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Stock trading
2%
OTC
97%
Interest
1%
ETD
0%
Stock trading
3%
OTC
84%
ETD
13%
Interest
0%
11
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
Strategy
Client focus
Our strategic drivers
Diversification
By delivering on our strategy we are diversifying our revenue. We have
already seen the benefit from our geographic expansion, and now we
arediversifying the business by product. This is in the form of organic
andinorganic growth. While our OTC business has continued to deliver
exceptional performance, our diversification strategy is beginning to
shape a new IG Group.
Every ambitious person
Unrelenting in our drive to reach ambitious people across
the globe. Ambitious people, wherever they are, all share
similar characteristics: they’re driven and self-directed.
Weexist to help them in their pursuit of financial freedom,
and we acknowledge that this means something different
for everyone.
Products that power
Evolving our product portfolio to provide greater choice
and flexibility in the pursuit of financial freedom. Through
innovation, we can power every ambitious person with
market-leading technology, platforms, products and
exchanges. Our focus on education gives clients the
understanding and confidence to harness that power
toachieve their goals.
Inspiring experiences
Creating personalised experiences that engage, educate
and empower. We invest in our award-winning platforms in
order to provide faster, clearer and smarter ways to trade.
User experience is the top reason clients trade with us.
We also encourage our employees to work collaboratively
to produce excellent results and get the most out of
their roles.
Tuned for growth
Developing our capabilities and infrastructure for growth,
balancing the need for agility with robust controls and risk
management. Successfully diversifying our business
geographically and by product has been possible due to
our strong scalable foundations. As we continue to grow,
this remains a key focus in our technology, our operations
and our financial strength.
FY19
FY22
Client onboarding
¼ Market to a clearly defined target audience
¼ Ensure marketing is clear, fair and not misleading
¼ Wealth, income and risk appetite
assessment prior to trading our products
¼ Ongoing checks to assess potentially
vulnerable existing clients
Client education
¼ Encourage clients to engage with us and to learn
about our products and how to trade effectively
andresponsibly
¼ Promote responsible trading through an engaging
introductory programme, targeted at client needs
¼ Provide a wide range of trading aids, such as
strategic trading content, charting packages,
news, commentary and analysis
Client outcomes
¼ Invest in process, training and culture to
continually improve experiences and outcomes
¼ Evaluate across a broad range of metrics – including
satisfaction, appropriateness, complaints and financial
outcomes – to ensure we are doing the right thing
¼ Focus on best possible service by continuous
investment in our platform, to maximise its
offering, availability and performance
Risk management
¼ Negative balance protection and limited-risk accounts
¼ Close-out monitor to warn and ultimately liquidate
client positions when their margin has been
significantly eroded
¼ Option to attach guaranteed stops to identify the
maximum possible loss at the outset of a trade
¼ A business model which aligns our outcomes with
those of our clients
Clients at
the centre
of everything
we do
IG GROUP HOLDINGS PLC ANNUAL REPORT 202212
STRATEGIC REPORT
Realising the value
of forward thinking
We are continually looking externally at key trends in our
sector, the industry and in the world more generally, to
understand the impact they may have on our business, either
to spot an opportunity, or to mitigate a risk. Although there
Financial markets
Description
Higher volatility tends to generate more opportunities in
financial markets, which attracts clients – increasing trading
activity and client income. However, at all times we seek to
maximise hedging efficiency while staying within our risk
appetite, in order to limit volatility of revenues.
During the past couple of years, there have been a number of
events which have caused an increase in volatility, from the
Covid-19 pandemic, to the ‘meme stock’ short squeeze in
January 2021, to the conflict in Ukraine. These led to elevated
levels of account applications which put increased demand on
our systems and people.
In the wider financial markets, we are now seeing rising
interest rates and increasing levels of inflation. These will
provide trading opportunities, but may also impact levels of
disposable income for our clients.
What does it mean for IG?
Lower volatility could have a negative effect on revenue
growth, through lower active client numbers and lower activity
per client – both impacted by market conditions. We now
serve an active client base which is materially larger than
before the pandemic.
We have managed to sustain revenues despite less market
volatility in this financial year. Although we believe that we
willbe able to grow the business over time, a long period of
lower volatility may have a negative impact on our revenues.
Conversely, events which cause higher levels of volatility in the
markets are likely to be beneficial to our revenue.
Description
With the evolution of technology, and freely accessible online
educational content, the online trading industry has seen
ashift away from financial advisers and a move towards
self-directed trading. Individuals want more control over their
finances, and have the knowledge and confidence to be able
to do it.
This structural change has been playing out for some years,
but has recently been accelerated by the long period of high
volatility from the Covid-19 pandemic. The financial markets
have never been as interesting to trade, nor as accessible to
such a vast potential audience, accelerating this shift towards
individuals taking control of their own financial futures.
What does it mean for IG?
Our target market is ambitious, self-directed individuals.
Weserve hundreds of thousands of those individuals already,
and the size of the addressable market is growing. We have
astrong reputation as the market leader in OTC derivatives,
and are building out offerings in turbos, options and futures,
and other areas of the market.
We are able to rely on our cutting-edge technology, our
platform reliability, our expertise in risk management and our
strong financial foundations to continue to grow and improve
as a business, and to attract clients all over the world.
Our business is aimed at active traders, but with the range of
support features on our platform, as well as our educational
content and our increasing product offering, we are confident
that we will be able to attract clients from other platforms as
they look to upgrade, as well as those who are newer to
theindustry.
Structural shift to
self-directed trading
are many external factors which may impact our business,
wehave highlighted below the key trends we see, and their
potential impact.
Key Trends Likely to Affect Our Business
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022 13
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
Sector developments
Description
Across all of our products, we operate in a highly competitive
environment. Our competitor set has evolved considerably
over the past five years, with our traditional competitors being
challenged by new market entrants.
With heightened demand for investing and trading in recent
years, we have seen elevated marketing spend from
competitors, which has reduced our share of voice in certain
markets. However, this spend is primarily focused on the lower
value end of the retail trader market.
We remain a market leader in the breadth and depth of our
product offering, but as competitors add products we need
torespond to maintain this point of differentiation.
What does it mean for IG?
To date, elevated marketing spend from competitors
hasnotimpacted our ability to attract and onboard our
targetedhigh-value clients nor to retain our loyal and
activeexisting clients.
To respond to the threat of new entrants, we closely monitor
any changes in the competitive landscape through local
knowledge and market research. Our sophisticated Search
Engine Optimisation techniques ensure we are the first choice
for active traders. We put client needs at the heart of
everything we do in order to stay ahead.
Leveraged derivative products are not suitable for all
individuals. We have rigorous onboarding criteria to ensure
that only appropriate clients are able to access our products.
Our competitors’ actions, including new entrants to the
market, may affect the reputation of the industry as a whole.
Our purpose compels us to add new products in addition
toOTC derivatives for the wider needs of ambitious,
self-directed individuals.
We regularly monitor the financial results and actions of our
competitors at executive and Board level.
Description
We are a fintech business; technology is at the core of what
we do. Our technology is constantly evolving and improving,
and our success as a business is a testament to being able to
stay at the forefront of technological advances.
Predicting the future of technology is hard, but it is likely to
impact the way in which we do business, the way we interact
with clients, and the way clients trade and interact with their
finances.
Clients will continue to demand faster platforms, better
execution, more analysis, more tools and an improved
userexperience.
What does it mean for IG?
Companies that will succeed in the future are those that are
able to listen to, understand and respond to their clients and
their evolving needs, while remaining at the forefront of
technological advances.
We are well positioned to face this ongoing challenge. Almost
40% of our employees work in technology and we have a
history of innovation, having built web platforms, mobile apps,
risk management models, a pan-European exchange and
market makers. We also have a dedicated team tasked with
exploring technology future design to ensure what we build is
resilient, scalable and cutting-edge. We are confident in our
ability to continue to succeed in this area.
Technology
IG GROUP HOLDINGS PLC ANNUAL REPORT 202214
STRATEGIC REPORT
Business Model
Our resources
Technology
¼ Continued investment in product
development and resilience
¼ Award winning options platform
¼ Direct market access (DMA) platform
¼ Sophisticated web application
programming interface (API)
¼ Range of leading-edge tools and
charting to inform clients
Brand and reputation
¼ Global leader in online trading, trusted
partner for over 380,000 active clients
¼ FTSE 250 company with £3.1 billion
market cap as at 31 May 2022 and
along history of profitability and
financial strength
¼ Content with cutting-edge research
and actionable trading insights
¼ Client surveys show our reputation is
one of the top reasons they choose us
People and culture
¼ Culture expressed through values –
‘champion the client’, ‘learn fast
together’, and ‘raise the bar’
¼ Tradition of innovation throughout
thebusiness
¼ Experienced Executive team who
understand our clients
Financial capacity
¼ High level of cash generation
andliquidity
¼ Strong balance sheet with the financial
capacity to support business growth
Our products
Our resources and strengths as a business come
together to provide four products for our clients:
Market risk management
We look to support our clients at all stages of
theirjourney.
This starts with our onboarding process, continues
through to our educational offerings, client service
support and trade execution, which always benefits
the client.
This can also be seen in the risk management model
inour OTC business, which is a key differentiating
feature for us as a business.
OTC
¼ Contracts For
Difference (CFDs)
¼ OTC FX
¼ OTC options
ETD
¼ On-exchange
leveraged securities
(EU)
¼ Options and futures
(US)
Focused on the future,
positioned for success
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022 15
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
We offset client exposures and hedge any residual
exposure in excess of pre-agreed risk limits in the
external market.
This is key to our business model. It also allows us to
manage our market risk while lowering our cost of
hedging, And by hedging residual exposure, means
that our interests are aligned with those of our clients.
Stock trading
¼ Share trading
¼ IG Smart Portfolios
(in association with
BlackRock)
¼ ISA and SIPPs (via
share trading)
Content and
education
¼ 10hrs daily live
programming
¼ News and original
content
¼ Webinars and
tutorials
Creating value for
ourstakeholders
Investors
Delivering attractive returns across an
increasingly diversified business from
astrong financial position.
Clients
Providing a quality global platform,
excellent client service and a range
ofdistinctive educational content
tosupport the trading of our
ambitiousclients.
Society
Playing our part to support our
communities, with a focus on financial
literacy and the environment.
Employees
Recruiting, retaining and engaging
ourpeople through an inclusive
environment that enables them to
develop as professionals with best-in-
class resources, training and support.
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
0.0 967.3
FY22
FY21
£967.3m
£845.5m
0 56
51.1%
56.0%
FY22
FY21
0 16
16%
7%
FY22
FY21
0.0 437.3
£437.3m
£422.8m
FY22
FY21
16
STRATEGIC REPORT
Key Performance Indicators (KPIs)
We have maintained our six KPIs from last
yearas they continue to provide the most
comprehensive reflection of how the business
is managed.
This is split into four financial metrics and two
non-financial metrics
1
.
Financial KPIs
Adjusted total revenue
£967.3m
Adjusted profit before tax margin
51.1%
Adjusted net trading revenue from
non-OTC products
16%
Net own funds generated from
operations
£ 437.3m
Adjusted total revenue represents
revenue from products and services
andinterest on client money less cost of
hedging, excluding certain costs relating
to the tastytrade acquisition.
Our profitability measure indicates
theextent to which we’re able to
convert our revenue into profit by
well-controlled cost management,
as we work to maximise value for
investors while investing in appropriate
initiatives for growth and resilience.
OTC activity remains our primary source
of revenue, however as we continue to
diversify our revenue base, we expect
the proportion of revenue from non-
OTC products to increase.
Our balance sheet strength metric
measures the cash we generate. It
indicates our ability to keep meeting
ourfinancial obligations as they fall due,
including broker margin requirements
and dividend payments.
Our financial metrics cover four key
areas of our finances: revenue,
profitability, diversification and
cashflow.
Strong performance in all of these areas
is critical to the success of the business
in achieving our strategy.
We have updated our revenue KPI to
adjusted total revenue, which includes
interest on client money, reflecting
theincreasing importance of interest
asa component of our total income.
Accordingly we have also updated our
profitability KPI to be adjusted profit
before tax margin based on total
revenue. Both of these measures
areona continuing operations basis.
FIND OUT MORE ON
PG. 38
1 Definitions for the individual metrics can be found in
‘Group-wide KPI Definitions’ on page 196.
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
0 216000
200,000
216,000
FY22
FY21
0 100
99.9+%
100%
FY22
FY21
17
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
This is a measure of client trading
activity. We use OTC derivative clients
rather than total active clients, as these
represent the majority of our revenues
in FY22.
This measures the percentage of time
that our trading platforms were online
during the financial year.
Non-financial KPIs
Total number of active OTC derivative
clients
200,000
Platform uptime
99.9+%
Our non-financial KPIs focus on the
size of our core client base and our
platform reliability.
We work to retain and grow a high-
quality, loyal client base, and deliver
platform reliability to provide the best
experience for those clients. Please also
refer to the ESG KPIs on pages 26 and
33 for information on our progress in
our commitment to our stakeholders,
environment and community.
These client and ESG metrics help
to provide context for our broader
progress, beyond our financial KPIs.
IG GROUP HOLDINGS PLC ANNUAL REPORT 202218
STRATEGIC REPORT
Strategic Update
Shifting towards
greater opportunities
FIND OUT MORE AT
IGGROU P.COM
Our strategy is driven by our purpose.
Ourbusiness investment case provides a
clearpicture of how our strategy has been
successful in the past, and why we believe
itwillcontinue to be successful in the future.
Our business is in an exceptionally strong place
to be able to deliver our strategy and provide
value for all of our stakeholders. Over the
nextfew pages we will look at some of our
businesses within the Core Markets+ and
HighPotential Markets portfolios.
Growth levers
¼ Multiple growth
levers across the
business
¼ Market share in
some of the world’s
largest markets
¼ Perfectly
positioned to
benefit from the
shift towards
self-directed
trading
Quality clients
¼ Significant amount
of revenue
generated from
long-term clients
¼ Consistent
onboarding criteria
has ensured the
quality of clients
has remained high
¼ Retention curves
have remained
consistent
throughout the
pandemic
Market-leading
technology and
platforms
¼ Leading-edge
research and
actionable trading
insights
¼ On-going
investment in
resilience, capacity
and platform tools
¼ Sophisticated
market risk
management
technology
Diversification
¼ Increasingly
diversified business
through organic
and inorganic
growth
¼ Footprint which
continues to
expand
geographically
¼ Meaningful steps
taken towards
product
diversification
Balance sheet
strength
¼ Strong and
consistent cash
flow generation
due to our business
model
¼ Prudent headroom
over capital
requirements
¼ Strong liquidity
position
¼ Clear Capital
Allocation
Framework
Investment case
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
£0m
£5m
£10m
£15m
£20m
£25m
£30m
£35m
0
5k
10k
15k
20k
25k
30k
Revenue Active clients
Q1 Q2 Q3
FY20FY19 FY22FY21
FY20
£46.6m
414% growth FY19–FY22
FY19
£19.2m
FY22
£98.5m
FY21
£68.7m
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
19
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
Core Markets+
Our Core Markets+ portfolio includes
our most established businesses, which
have been around for a number of years,
and have an existing market share.
Thisincludes all of our OTC businesses
outside of the US, as well as our stock
trading businesses.
We anticipate portfolio growth to be
slightly above market growth, as we
continue to win market share across our
locations, including some of our
faster-growing, newer businesses
such as Japan.
Our focus in this portfolio is on
continuing to service our high-value
client base, ensuring reliable access
toour platforms, customer support,
onlinecontent and a wide range of
markets to trade.
Core Markets+ revenue
£828.7m
(2021: £825.2m)
Number of stock trading clients
93,200
(2021: 89,500)
Japan revenue
+43%
(FY22: £98.5m, FY21: £68.7m)
Medium-term growth forecast
5-7%
FIND OUT MORE AT
IGGROU P.COM
Spotlight on Japan
Driven by:
Localised platform – following thorough
marketing research and a partnership
with a Japanese design agency, we
tailored the front-end of our application
to appeal to the Japanese market, rather
than using the same front-end used
elsewhere. This is evidence of our ‘local
approach’ in international markets.
Tailored marketing – we combined our
central marketing expertise with our
local marketing experts to explore
andtarget the appropriate marketing
channels in Japan, including using a
well-known Japanese actor to be the
face of our marketing campaign – a
move which proved very successful
inbuilding the brand and attracting
newclients.
Net trading revenue and active client growth
Future opportunities:
We have seen very strong growth in
firsttrades – up 53% – in FY22, giving
confidence in the continued growth in
the client base and overall business as
we continue to gain market share. This
will be supplemented by new product
launches and further platform
improvements.
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
£0m
£0.5m
£1.0m
£1.5m
£2.0m
£2.5m
£3.0m
£3.5m
0
50m
100m
150m
200m
250m
400m
350m
300m
Revenue Number of Turbos/Units
Q1 Q2 Q3
FY20 FY22FY21
FY20
£0.7m
FY22
£9.3m
FY21
£4.9m
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
20
STRATEGIC REPORT
Strategic Update continued
High Potential Markets
Our High Potential Markets portfolio
includes our newer businesses which
have significant addressable markets.
This includes all of our ETD businesses,
as well as our Retail Foreign Exchange
Dealer (RFED) in the US.
We anticipate growth of around 25-30%
over the medium term in this portfolio as
we believe that these businesses will be
able to grow market share quickly,
asthey expand into the large
addressable markets.
The businesses within this portfolio
require additional attention from our
management team to ensure the
correct strategic decisions are made
during their early growth stages.
tastyworks growth
+16%
MTF growth
+90%
High Potential Markets clients
116,000
Medium-term growth forecast
25-30%
FIND OUT MORE AT
IGGROU P.COM
Spotlight on Spectrum
¼ Spectrum provides pan-European
market infrastructure for product
issuers and market makers to
distribute their products across an
increasing distribution network
¼ All components of the multi-lateral
trading facility (MTF) have been
internal to date: we are the exchange,
the product issuer and the broker
Net trading revenue and turbos traded
¼ The Spectrum business model
isdriven by creating flow across
theexchange. This growth will
besupported by introducing
third-party brokers and issuers
ontothe exchange
¼ Two Italian brokers, Intermonte and
Equita, joined Spectrum in Q4 FY22
¼ We have a pipeline of brokers
expected to join in FY23, able to
tradeBrightpool and third-party
issued products
¼ We are anticipating two Tier 1 global
institutions to commence issuing
products on Spectrum in H1 FY23
Pricing
Retail
orders
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Commissions 54%
PFOF
1
42%
Interest 4%
Other 80%
TSLA 7%
AAPL 4%
AMZN 3%
NVDA 3%
AMD 3%
Equity Options 85%
Index Options 10%
Future Options 5%
Commissions 54%
PFOF
1
42%
Interest 4%
Equity Options 85%
Index Options 10%
Future Options 5%
Other 80%
TSLA 7%
AAPL 4%
AMZN 3%
NVDA 3%
AMD 3%
Other 80%
TSLA 7%
AAPL 4%
AMZN 3%
NVDA 3%
AMD 3%
21
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
Insights into tastytrade At a glance
1 Payment For Order Flow.
tastyworks FY22 revenue
Equity revenue by
underlying asset
FY22 products by contract
Q&A with
the CEOs
Previously:
¼ Co-founder, thinkorswim
¼ Co-founder, Sosnoff Sheridan
Corporation
¼ CBOE Floor Trader
Previously:
¼ Co-founder, thinkorswim
¼ Co-founder, Sosnoff Sheridan
Corporation
¼ CBOE Floor Trader
Tom Sosnoff
Executive Vice Chair
Tastytrade Global;
CEO, tastytrade
Scott Sheridan
CEO, tastyworks
Q: What inspired you to
set up tastytrade?
As traders ourselves, we wanted to
create a financial network which
brought traders together, providing a
place for them to educate themselves
about trading and take control of their
financial decisions. That’s why we say
tastyworks is a platform built by traders,
for traders.
Q: Why is quantitative
content such an important
part of your business?
Our content is such a key part of the
business, and it was how the whole
business started. We deliver cutting-
edge research and actionable trading
strategies, making the complex world of
options simple to understand for our
customers. It’s also a great way to build
awareness and a steady pipeline of
potential new customers who already
know and trust us.
Q: How is the integration
with IG going?
Becoming part of IG Group is really
exciting for us. Integration has gone very
well and the collaboration between all of
our teams from technology to marketing
has been exceptional, and will continue
to drive us from strength to strength.
With integration now materially
complete, our co-founder Kristi Ross
has decided to move to a strategic
advisory role and step back from
day-to-day responsibilities at tastytrade
and IG, from 1 July 2022. We’re really
pleased that Kristi is staying on as a
strategic adviser and look forward to
continuing to work with her.
At the same time, it’s great to see
ourVice President and Chief Market
Strategist, JJ Kinahan, take on an
expanded leadership role as Regional
CEO for IG, North America.
Q: What makes you confident
of future growth?
There are so many things which I could
mention here, from embedding a more
sophisticated marketing function, the
potential for international expansion,
future product launches in the digital
asset space, platform improvements to
improve our client journey, and in the
short term, interest rates will benefit
us too.
Hopefully that gives you a flavour of why
we are so excited about the future.
IG GROUP HOLDINGS PLC ANNUAL REPORT 202222
STRATEGIC REPORT
Ongoing engagement with our stakeholders
helps to foster trust, transparency and collaboration.
Through ongoing dialogue, we can work together
toevolve our organisation to meet the needs of
stakeholders and ensure our long-term sustainability.
Below, we identify our key stakeholders, how we
engage with each of them, and why it matters.
Our clients Our people Our investors
Why we engage
We aim to provide a holistic experience
combining high-quality products, robust
customer service and dynamic content with
a client-centric approach.
Our customer loyalty exceeds many others’
– but we don’t take this for granted. We
work to offer our clients an exceptional
experience every day.
How we engage
Our multilingual, highly trained customer
support teams are available 6.5 days a
week, 363 days a year (with closures on
Christmas day and New Year’s Day).
Ongoing investment in communications
and customer relationship management
help nurture client engagement and loyalty.
Our platform offers a range of tools
andfeatures to help clients, including
educational resources, breaking financial
news and live analysis of the markets.
Our clients use our trading platforms on a
daily basis, making them our most valuable
source of feedback. We use their feedback
to help us continually improve our service.
What matters most
Products: We are a market leader in the
breadth and depth of our product offering,
diversifying in response to clients’ needs.
Knowledge: We create content and
marketanalysis to give our clients the
confidence to understand and use our
products to meet their financial goals.
Wealso offer demo accounts, where
clientscan experience our products in
alow-risk environment.
Technology reliability: We strive to provide
astable, secure, reliable platform, so that
trade execution is seamless.
Support: 24-hour trading coverage enables
our clients to trade ‘around the clock’.
Clients can rely on us whenever they
needassistance.
Why we engage
Our people are at the centre of all we do.
We focus on cultivating talented and
dedicated individuals for our growing,
global team, so we can continue to
deliver high-quality, innovative products,
robust customer service support, and
informative content that differentiate us
from competitors.
How we engage
Employee engagement takes many forms
at IG, including surveys, internal social
channels, townhalls, smaller group
meetings and through feedback obtained
via our employee communication portal.
We have also developed employee
network groups as a crucial channel
to better understand the experience
of our employees who are currently
underrepresented.
Our People Forum, a body that acts
as a conduit for more formal feedback
and interactions with the Board, brings
employee voices into Board decision
making. The People Forum is chaired by
our Chief People Officer and attended by
Non-Executive Director Sally-Ann Hibberd.
Employee representatives are
democratically elected by our people
and serve two-year terms.
What matters most
Employee engagement is vital in two main
ways: 1) how we share information about
our business strategy and industry updates,
and 2) how we gather feedback from our
employees to continually enhance our
employee experience, which we believe will
also strengthen the quality of service to
ourclients and the communities in which
we operate.
This two-way dialogue enables us to get the
best from our talented, experienced people
and helps us achieve our ambition to be a
top workplace and employer.
Why we engage
Creating value for our investors is critical.
Staying informed of their views gives us
insight into their priorities when assessing
us as an organisation. By delivering for both
our shareholders and bondholders, we help
to ensure that our business continues to be
successful in the long term.
How we engage
Throughout this financial year we have
adopted a hybrid model, hosting in-person
investor meetings as well as continuing
virtual meetings where appropriate.
This flexible approach allows us to
build relationships with our investors,
while providing greater flexibility to
accommodate health restrictions as
well as time or location constraints.
We have maintained open dialogue with our
shareholders and bondholders through a
variety of channels including one-to-one
and group meetings, results webcasts and
roadshows, conferences, and via questions
submitted by investors on an ad hoc basis.
Investor feedback, along with details of
major movements in our investor base, is
reported to and discussed by the Board
regularly and incorporated into the
decision-making process.
What matters most
Key to our engagement with investors is
that management and our Investor
Relations team are accessible, open and
well-informed about the business. This
allows for high-quality discussions, which
provide investors with the information they
need to make informed decisions.
Investor discussions cover a wide range of
topics, including financial performance,
strategy, capital allocation, client
characteristics, cost control, regulation and
competitive position. The receptiveness of
management and the Board to the views of
investors is integral to the development of
investor trust.
Stakeholder Engagement
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022 23
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
Our regulatorsOur communities Our suppliers
Why we engage
Regulations influence how we are able to
operate in the marketplace. We recognise
how vital it is to maintain constructive,
ongoing dialogue with regulators to
ensure they understand our products and
our business model, so we can continue to
be active in countries we currently serve
and keep growing into new markets.
Engaging with local regulators helps foster
our relationships with them and gives
us a better view of upcoming regulatory
changes, which in turn informs how we can
best respond to those changes to meet the
needs of our key stakeholders.
How we engage
Constructive dialogue and transparency are
at the foundation of our relationships with
regulators, helping to demonstrate that our
actions and business model are consistent
with regulatory expectations. Working with
regulators takes shape in several ways,
ranging from proactive engagement on
new business proposals to assisting with
their regulatory requests and investigations.
What matters most
Regulators aim to safeguard individuals’
best interests and ensure that all clients are
treated fairly. They also focus on protecting
the integrity of financial markets, as well
ascapital and liquidity issues. We work to
respect and follow both the letter and spirit
of the regulations set out by local regulators
to demonstrate that we share their vision.
Why we engage
Our long-term success relies on an
unwavering commitment to sustainability
and social responsibility. This commitment
is a driving force for our business purpose,
our ESG strategy, our corporate social
responsibility programmes and our culture.
How we engage
Our Brighter Future framework shapes how
we reach our ESG goals, centring around
four main pillars: Products, People,
Partnerships and Best Practice. At the heart
of this strategy is our Brighter Future Fund,
which was established in 2020 with an
initial £5 million commitment. Through the
Brighter Future Fund, we build partnerships
with local, national and global charities,
with the aim to have a positive impact on
the communities in which we operate. We
make substantial cash donations to these
partners and offer employee time through
corporate volunteering. These activities are
managed by our dedicated ESG team and
our Executive Committee and are overseen
by our ESG Board Committee.
In December 2021, we pledged the
equivalent of 1% of the prior financial year’s
post-tax profits to charitable causes each
year from 2022 to 2025, subject to Board
approval. These contributions aim to tackle
educational inequality and to create
long-term, sustainable societal impact.
What matters most
We aim to provide sustained and long-term
support to the communities in which we
operate. This support takes many forms –
through ongoing dialogue, sustained
contributions and through meaningful
employee engagement.
As part of our considerations, we also
focuson the environment, and address
thisthrough partnerships and charitable
programmes among other initiatives.
See page 26 for more details.
Why we engage
Suppliers are crucial to the quality of
service we provide to our clients, and as
such, we aim to develop mutually beneficial
and lasting relationships with our vendors.
We recognise the importance our supply
chain plays in delivering our ESG strategy
and expect our suppliers to embody our
commitments to responsible business,
education and the communities in which
weoperate.
How we engage
We understand the importance of selecting
partners with effective controls and
high-quality standards as we look for
longer-term relationships. As a result,
wehave implemented a robust diligence
process to screen our suppliers to ensure
that together we continue to meet the high
quality of service our clients expect.
Frequent dialogue with our suppliers is
acore way that we ensure that all parties
are getting the desired value from our
relationship. Generally, our engagement
ranges from informal conversations for
exchanging information and discussing
priorities to more formal interactions.
What matters most
Long-term partnerships: our suppliers
value clarity on our expectations of the
relationship and the services they provide,
along with timely and reliable payment.
Oursuppliers also appreciate fair, open and
honest two-way communication and value
the feedback we can give them.
IG GROUP HOLDINGS PLC ANNUAL REPORT 202224
STRATEGIC REPORT
Section 172(1) Statement
We are committed to upholding the very
highest standards of conduct and all
decisions we make are for the long-term
success of the business. We believe that
our business will continue to grow and
prosper if we understand and respect
the views and needs of our stakeholders.
Under Section 172 (s172) of the
Companies Act 2006 (CA2006),
theDirectors must act in a way that
theyconsider, in good faith, would be
most likely to promote the success
ofthe Company for the benefit of its
members as a whole. In doing this, the
Directors must have regard to, among
other factors:
¼ The likely consequences of any
decision in the long term
¼ The interests of the Company’s
employees
¼ The need to foster our business
relationships with suppliers,
customers and others
¼ The impact of our operations on the
community and the environment
¼ The desirability of the Company
maintaining a reputation for high
standards of business conduct
¼ The need to act fairly between
shareholders of the Company
Our key stakeholders
We have identified certain key
stakeholders who are essential to the
success of our business. Details of these
stakeholders and why and how we
engage with them can be found on
pages 22-23.
The Board has direct engagement with
our employees and shareholders and is
kept fully informed of material issues of
all stakeholders by the Executive team
and external advisers.
Long-term decision making
Our strategy is to sustainably generate
and preserve value for stakeholders and
wider society over the long term by
facilitating a wider range of trading and
investment opportunities for ambitious
people around the world. This long-term
view drives the annual review of strategy
undertaken by the Board and the setting
of objectives for employees. Our
risk-management procedures identify
the potential consequences of decisions
being made in the short, medium and
long term so that appropriate levels of
identification, mitigation, reduction,
management or elimination of risk can
be considered and taken in the best
interests of the Group and stakeholders.
Methods used by the Board to fulfil
s172duties
The Board sets the purpose, values and
strategy, and carefully ensures that it is
aligned appropriately with stakeholder
interests, while also taking our culture
into consideration.
Consideration of key stakeholders is an
integral part of all decision making by
the Board and every paper presented to
the Board clearly sets out the impact on
any stakeholders for whom it is relevant.
This analysis assists the Directors in
performing their duties under s172,
andfurther, the Board receives external
challenge and assurance on this,
together with reports from brokers
andadvisers.
Directors receive specific training
including tailored induction processes
for new Directors together with an
ongoing programme of training on
strategic, legal and regulatory
developments relevant to the Group’s
activities. This enables the Directors to
comply with their legal duties under
s172 of the CA2006.
Principal Board decisions taken during
the year
Stakeholder engagement allows us to
understand the impact of decisions on
key stakeholders and the wider market
implications of these decisions. By
listening to our stakeholders, we are
able to identify emerging risks and
trends, which can then be factored into
strategy discussions.
We give three examples of how the
Directors have considered the matters
set out in s172 of the CA2006, when
discharging their duties, and how this
has affected certain principal decisions
taken by them. We define ‘principal
decisions’ as those that are material to
the Group and are significant to any one
or more of our key stakeholder groups.
In making the following decisions, the
Board considered the outcome for our
stakeholders based on engagement
with them, as well as the need to
maintain a reputation for high standards
of business conduct and the need to act
fairly between our shareholders.
Principal decision 1:
Comprehensive debt
refinancing programme
Background
Following the acquisition of tastytrade,
the Board approved the issuance of £300
million of senior unsecured loan notes,
the proceeds of which were used to
repay the Group’s £250 million bank debt,
comprising a £150 million three-year term
loan facility and a £100 million existing
term loan, both of which were due to
mature in June 2023. In addition, the
Board agreed the renegotiation of our
revolving credit facility (RCF), increasing
the size to £300 million with an initial
maturity of three years.
Board considerations
The Board considered and approved
the establishment of a Euro
Medium Term Note Programme
(EMTNProgramme). The establishment
of theEMTN Programme included
the publication ofthe associated
Prospectus on 29 October 2021.
The Directors considered that the
EMTN Programme would bring
numerous benefits, including:
¼ An enhanced opportunity to time the
market, reducing the transaction
time from 10-12 weeks to two weeks
¼ Flexibility in the types of notes that
could be issued
¼ Cost effectiveness, as issuing notes
from an EMTN Programme was
significantly cheaper when compared
to a standalone issuance
¼ The ability to make the most of
private placement opportunities
Following the establishment of the
EMTN Programme, the Board approved
the issuance of £300 million senior
unsecured notes, using the majority of
the proceeds to repay its existing debt
facilities. The Board also approved a new
RCF facility which:
¼ Provides significant levels
of liquidity to support our
strategic-growth ambitions
¼ Lengthens the maturity of
the debt facilities, enhancing
ourfinancial flexibility
¼ Provides material headroom within
our total facilities
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022 25
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
Stakeholder impact and
considerations
Clients
By providing ready, flexible and better-
timed access to capital and liquidity,
wewould be better placed to support
our clients’ demands and expectations.
Shareholders
The Board considered the impact of
thenew debt structure for shareholders
and agreed that the EMTN Programme
and new debt facility represented
anappropriate long-term strategic
opportunity which would create value,
promoting the success of the Group in
the long term including for shareholders
as a whole.
Regulators
The Board considered the positive
impact of the EMTN Programme from
aregulatory perspective. Specifically,
the enhancement of our ability to raise
capital and to access liquidity on short
notice (and therefore more effectively
mitigate the risk of capital and liquidity
shortages) were considered to be
aspects of the proposal that would be
viewed favourably by our regulators, in
light of the positive impact on our ability
to serve our clients.
Commitment to the business plan and
long-term success
The Board fully considered the benefits of
implementing the EMTN Programme and
agreed that the proposal provided an
opportunity for us to move at pace
towards realising our strategic vision, and
enabled us to operate under a more
efficient and flexible debt structure
aligned to our growth opportunities.
Principal decision 2: Pledging 1%
of post-tax profits to charitable
causes
Background
In 2020 we established our Brighter
Future Fund with a Board-approved
payment of £5 million. This year, as a sign
of our commitment to responsible
business, the Board approved a pledge of
the equivalent of 1% of the prior financial
year’s post-tax profits towards charitable
causes each year from 2022 to 2025,
subject to ongoing Board approval. The
majority of this will be paid into the
Brighter Future Fund and used to make
strategic donations aligned with the
themes of empowerment through
education and the environment.
The 1% will also be used to meet
our employee matched fundraising
promise and will include employee time
spent volunteering.
Board considerations
The Board considered the fact that as
our businesses grow, so too does our
impact on our communities and on the
environment. It is increasingly important
that we manage this impact in a
responsible and sustainable manner.
Tothis end, the 1% pledge represents
asignificant step towards sharing our
successes with the communities in
which we operate.
As stated in our purpose, we exist for
every ambitious person, regardless of
their background. The primary goal for
the Brighter Future Fund is to improve
educational opportunities for the least
privileged in our global communities. The
Board considered that the 1% pledge was
therefore in line with our purpose-led
direction and in the best interests of
ourstakeholders.
Stakeholder impact and
considerations
Communities
The Board recognised the significant
positive impact this pledge could
haveon the communities in which
weoperate.
Employees
The Board considered how employees
would be invited to participate in
community outreach activities via the
Brighter Future Fund, with a particular
focus on how employees could donate
their time by using volunteering days
and directing money from the Fund by
accessing the matched-giving promise.
The Board also considered how
community outreach commitments
were becoming increasingly important
to prospective employees.
Commitment to the business plan and
long-term success
The Board considered that the 1%
pledge would be in line with our
purpose and values, each of which had
been carefully articulated to ensure
long-term success.
Principal decision 3: Sale of Nadex
and Small Exchange
Background
Following receipt of a non-binding offer
from crypto.com, theBoard approved
the sale of the entire issued share
capitalof Nadex by IGNA, and sale of the
issued share capital of Small Exchange
held by tastytrade for $216 million.
Board considerations
The transaction represented a
significant return on the investments
made, creating the potential for
additional investment across the
business. Completion of the sale was
announced on 2 March 2022.
The Board focused in particular on the
potential anti-money laundering risk,
political risks and regulatory risks,
andthe retention of key people.
The Board considered this sale in line
with our strategic direction and in the
best interests of our stakeholders.
Stakeholder impact and
considerations
Employees
The Directors considered the impact
ofthe proposed sale on employees.
Inparticular, the Board considered key
person risk and the views of impacted
staff members, with a focus on the views
and interests of employees who would
be transferred to crypto.com as a result.
Shareholders
The Board was kept apprised of each
key stage of the transaction and any
significant developments were reported
to the Board, including in relation to
dealstructure and key terms of the
transaction documents. The Board
considered the returns acceptable from
a shareholder perspective and agreed
that the sale represented good value.
Commitment to the business plan
andlong-term success
The Board considered that the sale
would be in line with ourstrategic
priorities as it would allow resources
tobe redeployed into key strategic
opportunities and markets identified
aspart of our strategy.
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Our tools give
people access to the
financial markets and, to
suppot that, we produce
a huge range of excellent
financial education
materials. We onboard
our clients responsibly
and are vigilant for
client vulnerability.
We want to raise
the bar for business.
This means we are
governed by accountable
leadership, uphold
exemplary ethics, and
are transparent in our
communications.
By proudly developing a diverse
and inclusive team of talented
people, where wellbeing comes
first and ambition is nutured,
we improve our employees’ lives.
We amplify our impact through
meaningful collaboration with
like-minded patners to champion
responsible business, education
and the environment throughout
our supply chain.
Empowering our stakeholders to unlock a Brighter Future
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26
STRATEGIC REPORT
ESG at a Glance
Powering the pursuit of financial freedom for
the ambitious is about making a positive and
inclusive contribution to society. FY22 has been
a successful year for our ESG ambition. From
starting a review of the ESG impacts of our
products to committing to the Science Based
Targets initiative, we’ve taken huge steps to
embed our Brighter Future framework across
our business. The following section showcases
some highlights and signposts where you can
find out more.
The Brighter Future framework is at the
core of our ESG strategy. Launched in
FY21, it identifies the potential key risks
posed by our business, and the key
benefits that we offer to our clients and
communities, and commits to managing
these in a responsible and sustainable
manner. Twelve priority areas were
identified, split across four pillars:
Products, People, Partnerships and Best
Practice. We’ve made great progress in
each of these areas, and in doing so
have made some really meaningful
contributions towards the aims of the
UN Sustainable Development Goals.
We are proud to have our progress
recognised with a number of ESG
awards and ratings, and to be active
members of several important
communities. We are particularly
pleased to have become a constituent
of the FTSE4Good Index.
Young people benefiting from our
Brighter Future initiatives globally
94,751
Scope 1-3 greenhouse gas emissions
per employee (TCO
2
e)
10.56
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022 27
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
ESG Report
We want to make it easy for stakeholders
tounderstand how we demonstrate our
commitment to responsible and sustainable
business, and to see how these activities
interact with and complement activities
pursued by wider society. This is why we have
aligned our ESG strategy with the following
seven UN Sustainable Development Goals:
UN SDG Key achievements in FY22 References
Ensure inclusive and equitable
quality education and promote
lifelong learning opportunities
for all
¼ Removed barriers to accessing IG Academy, with this financial content now being
available to all
¼ Created an internal ‘Learning Hub’ to help employees curate learning journeys tailored to
their needs
¼ Money and time donated to charities promoting equal access to quality education, such
as Teach the Nation in South Africa, Teach for America and Teach for Australia
¼ Pages 29, 30 and
32 of the Annual
Report
Achieve gender equality and
empower all women and girls
¼ Made key changes to our recruitment processes to make them more inclusive
¼ Launched the DailyFX Women in Finance Hub, offering content designed to help women
become more informed, engaged and educated traders
¼ Facilitated community outreach events focused on supporting and inspiring young
women in collaboration with UK strategic charity partner Teach First
¼ Improved confidence and leadership skills of young women and girls through our Chance
to Shine Partnership
¼ Pages 24 and 30 of
the Annual Report
Promote sustained, inclusive
and sustainable economic
growth, full and productive
employment and decent
work for all
¼ Employed 2,507 people globally (as at 31 May 2022)
¼ London Living Wage employer in the UK, and looking to ensure this is replicated for all
employees across the globe, using appropriate local benchmarks
¼ Participated in community outreach events focused on improving employability
prospects of young people from underrepresented communities. For example, in
Chicago we hosted an intern through the Greenwood Project and we collaborated with
partner Teach For Poland to help Ukrainian refugees with teaching qualifications to
receive training and find employment
¼ Page 33 of the
Annual Report
Reduce inequality within
and among countries
¼ Pledged 1% of prior financial year’s post-tax profits to charitable causes each year from
2022 to 2025, subject to board approval, and a significant portion of this will focus on the
theme of empowerment through education, including projects in developing nations
such as India and South Africa
¼ This year we paid £131.3 million (2021: £119.0 million) to tax authorities globally and
£97.4million in corporate income taxes (2021: £83.0 million)
¼ Gifted a total of 67 laptops to refugees and partner schools from the Teach For All network
¼ Financial
Statements for
FY22
Ensure sustainable
consumption and
production patterns
¼ Maintained a C grade with the Carbon Disclosure Project
¼ Taken steps to further embed environmental considerations in our procurement
activities, engaging an environmental consultant to help us develop a suite of new
procurement standards
¼ Pages 32 and 33 of
the Annual Report
Take urgent action to combat
climate change and its impacts
¼ Formally began our journey with the Science Based Targets initiative, with a commitment
to producing a pathway to net zero by the end of summer 2024
¼ Offset our scope 1, 2 and upstream scope 3 carbon emissions for the third year running
and maintained lifetime carbon neutral status
¼ Further embedded climate-related risks and opportunities into our Risk Management
Framework, in line with the recommendations of the Taskforce on Climate-related
Financial Disclosures (TCFD)
¼ Pages 32, 33 and
34 of the Annual
Report
Strengthen the means of
implementation and revitalise
the global partnership for
sustainable development
¼ Became a member of the Business For Societal Impact
2
network to collaborate with
peers and to benchmark our community outreach activities
¼ Made donations to 45 different charities spread across 14 different countries
¼ In the UK, we participated in a cross-sector collaboration looking at improving female
representation in the STEM
3
subjects. Co-collaborators included the UK Shadow Minister
for Digital Science and Technology, the Institute of Physics, the Royal Society of Chemists
and the Education Policy Institute
¼ Page 32 of the
Annual Report
1 The Sustainable Development Goals are a collection of 17 interlinked global goals designed to ensure a more sustainable and just future. They were
created in 2015 by the United Nations General Assembly and are intended to be achieved by 2030.
2 Business For Societal Impact (B4SI) is a global standard for measuring and managing a company’s investment for social impact.
3 Science, Technology, Engineering and Maths.
UN Sustainable Development Goals
1
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COMMITMENTSUSTAINABILITY
IG GROUP HOLDINGS PLC ANNUAL REPORT 202228
STRATEGIC REPORT
ESG Report continued
Non-financial information statement
Section 414CA of the CA2006 requires the Company to include within its Strategic Report a non-financial information
statement setting out such information as is required by Section 414CB of the CA2006. The table below and the information
itrefers to are intended to help stakeholders understand IG’s position on key non-financial matters.
Reporting requirement Policies governing our approach Find out more
Environmental
matters
ESG Policy ESG Report, pages 32 to 35
Employees Equality, Diversity and Inclusion Policy (includes Anti-Discrimination
and Harassment Policy)
Recruitment Policy
Absence Management Policy
Annual Leave Policy
Parental Leave Policy
Group Whistleblowing Policy
Transitioning at Work Policy
IG Health and Safety Policy
ESG Report, pages 30 to 31
Social, community
matters
Equality, Diversity and Inclusion Policy
ESG Policy/Approach Document
ESG Report, page 30
Human rights issues Statement on Slavery and Human Trafficking (Modern Slavery)
Vendor Management Policy
ESG Report, pages 33 and 35
Anti-bribery and
corruption
IG Group Anti-Bribery Policy
IG Group Gifts and Hospitality Policy
IG Share Dealing Code
IG Personal Account Dealing Policy
Group Market Abuse Policy
Group Conflicts of Interest Policy
PEPs and Sanctions Policy
Client Risk Categorisation Policy
Group Whistleblowing Policy
Group Global Anti-Money Laundering (AML) (including Counter
Terrorist Financing)
ESG Report, page 35
Description of principal risks and impact on business activity Key Trends Likely to Affect Our
Business, pages 12-13, Risk
Management, pages 46-53
Description of business model Business Model, pages 14-15
Non-financial key performance indicators KPIs, page 16
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022 29
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
Products
This year we began a project
to apply an ESG lens to
theproducts we offer,
toassess their societal and
environmental impacts on
different stakeholder groups.
This is being carried out by our
internal analysts, and we are
using ESG rating data where
available and applicable.
This project will continue over
the course of next year.
Financial education
We are proud to provide excellent
educational content. This is intrinsic to
our purpose and an expression of our
values to champion the client, learn fast
together and raise the bar.
We exist for every ambitious person.
This means we are focused on inclusivity
– both in terms of the accessibility of
our content and the suitability of our
content to different audiences. As an
example of accessibility, anyone can
now reach the resources on IG Academy
without the need for an IG demo
account. As an example of suitability,
in October 2021 we launched the
DailyFX Women In Finance Hub. Women
represent nearly 30% of DailyFX’s
audience and the hub offers them ways
to build and refine their skills through
inspiring video stories, interviews with
market movers and shakers, Q&As with
female clients, and how-to content to
help women become more informed,
engaged and educated traders.
Onboarding and safeguards
Our products give our clients access
to opportunities in financial markets.
However, we are conscious of the
impact that unaffordable losses can
have and we have identified this as one
of the most material of our ESG risks. We
take a number of measures to make sure
our products are appropriate for those
using them. These steps range from
responsible marketing and onboarding,
through to monitoring for behaviour
that could be indicative of vulnerability.
We set ourselves very high standards in
this area. Not only do all of our systems
meet the requirements set by the
Financial Conduct Authority (FCA) and
other international regulators, but we
think beyond these obligations and
ensure that we exemplify all three of
ourvalues.
Data security
Our clients trust us with data and, in
some cases, with their funds. We take
this responsibility seriously and have
state-of-the-art systems in place to
ensure that these are protected. We
continue to manage and maintain an
Information Security Strategy and
supporting framework with a focus
onkeeping our client data and funds
secure, as well as the services we
provide to our clients. As we operate
within various global geographical
jurisdictions, we also seek to maintain
the highest levels of information security
compliance with applicable regulations.
Pillar 1
We offer a wide range of
products. The first pillar of our
Brighter Future framework is
about how we manage the
impact that these products
can have on our clients
andcommunities.
Stakeholders
¼ Our clients
¼ Our communities
1,063,480
total number of IG Academy users
inFY22
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COMMITMENTSUSTAINABILITY
IG GROUP HOLDINGS PLC ANNUAL REPORT 202230
STRATEGIC REPORT
People
Equality, diversity and inclusion
Our aim is to ensure that our Company
isa safe, welcoming environment where
everyone can be themselves and grow
to their full potential. This year we have
maintained our focus on gender
diversity and have increased the
percentage of female employees by
1%;from 33% to 34%. This represents
progress towards our target of 35%
butclearly there is still more to be done.
A key focus for this year’s diversity
agenda was inclusive recruitment,
following our analysis of
underrepresentation and how it may
arise. Our technology department
hasbeen piloting initiatives to reduce
potential bias in our recruitment
processes, such as setting a target
forall roles to have a minimum of 25%
female representation on the shortlist
based on merit, and that all interview
panels are gender-balanced where
possible. These changes contributed
toimprovement in the diversity of the
talent pipeline across all grades, as well
as an improved ratio between female
leavers and joiners. These pilot initiatives
have been supplemented by our
engagement in specialist recruitment
events, such as the Women of the
Silicon Roundabout, and we have
partnered with specialised recruitment
agencies such as TargetJobs to reach
the widest talent pool available. We have
a goal of a 50/50 gender-balanced
graduate cohort in FY23.
This year we have also taken significant
steps to raise awareness of Equality,
Diversity and Inclusion (EDI) issues
among our employees. For example, our
technology department invited external
speakers to a series of monthly talks
aspart of a ‘Belonging’ series. Also,
coinciding with International Women’s
Day, our global women’s employee
network, Inspire, organised a full week
of educational panel sessions and
networking events.
In addition to progressing our gender
diversity agenda and raising awareness
among our employees, we continue to
consider other elements of EDI, such as
ethnic diversity and disabilities. A good
example of this is that we have been
undertaking a review of our trading
products to identify potential barriers
toaccess that we’d not previously
considered. This project was undertaken
in collaboration with accessibility
experts Nomensa and produced a
number of recommendations that
wewill look to implement over the next
12 months.
Talent development
We strive to attract people with the right
skills, experience and behaviours, and
toretain these people and help them
continue their journey of development.
In FY22 we improved our Employee
Value Proposition to ensure it better
reflects our warm, vibrant and dynamic
culture, and supports our purpose and
values. The new design, narrative and
tone of voice was then used to reshape
our recruitment materials and used in
external campaigns targeting our key
talent groups.
In relation to retention, we have made a
number of significant improvements to
our employee learning and development
offering. This has centred around
thelaunch of a new Learning and
Development (L&D) Hub, bringing all
learning resources into one place. We
have also created a Skills Share forum
where employees deliver talks about
their area of expertise. These talks
regularly attract over 400 employees
and exemplify our value to learn
fasttogether.
We continue to curate a range of
learning resources and give access to
learning platforms and courses such as
LinkedIn Learning, Coursera, O’Reilly
and Gartner. We also completed an
exciting pilot programme for new
managers, and will be rolling this out
globally in FY23.
Wellbeing
This year has been another challenging
year from a wellbeing perspective. Our
employees have continued to navigate
the challenges posed by the Covid-19
pandemic, the emerging cost of living
crisis and, for many colleagues in our
Krakow office, impacts of the conflict
in Ukraine.
Listening to our people is paramount
toa successful wellbeing strategy.
Inrecognition of the increases to
livingcosts and after the issue being
discussed at our global People Forum,
we brought forward our annual
inflationary-linked pay review. 50.4% of
our staff received immediate pay rises,
four months ahead of the scheduled
Pillar 2
Nurturing talented, dedicated
people enables us to deliver
the products and services that
keep us at the forefront of our
industry. The second pillar of
our Brighter Future framework
focuses on how we manage
our responsibilities as
an employer.
Stakeholders
¼ Our people
¼ Our communities
82%
of our workforce would recommend
us as a great place to work
(FY21: 80%)
ESG Report continued
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Male
67%
Female
33%
Male
77%
Female
23%
Male
62%
Female
38%
Male
66%
Female
34%
31
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
review. Additionally, our Board, Executive
Directors and the wider Executive
Committee decided to forego their pay
rises or take materially reduced rises this
year. The money saved was used to
create a pool of money to increase the
salaries of employees feeling the biggest
impact of the cost of living.
In addition, on the theme of listening,
weran our annual engagement survey
inJanuary 2022. The results enabled
usto compare our performance on 21
Gender breakdown across our workforce
metrics against peers in the Financial
Services sector and we were pleased
tofind ourselves above the benchmark
across 18 of these metrics.
We were delighted to maintain our
status as a Top Employer in the UK for
2022. We have gone on to receive the
Great Place to Work certification in
Poland and India – demonstrating
thetruly global commitment to
HRexcellence.
1
Board Senior leadership team
Executive Committee Total
Male Female
1 These are awarded by the Top Employers Institute and
Great Place to Work, respectively, both recognised
authorities on excellence in people practices. These
awards are based on HR-related surveys, looking at
people practices across key HR themes.
IG GROUP HOLDINGS PLC ANNUAL REPORT 202232
STRATEGIC REPORT
ESG Report continued
Partnerships
Educational equality
We firmly believe that a good quality
education is the key to realising ambition
and to unlocking potential. Therefore,
asan expression of our purpose,
we’vecontinued to focus much of our
community outreach work on removing
barriers that are restricting access to
education in our communities.
In FY22 we have continued to work
closely with Teach For All and a number
of their network partners. Our support
for these partners, such as Teach For
Poland, Teach For India and Teach For
Australia, has helped them continue to
find excellent teachers and place them
into the schools and communities where
they are needed the most. As well
assupporting these organisations
financially, colleagues have used our
volunteering days to provide support
totrainee teachers and directly to their
student. For example, a group of
colleagues have been helping students
in the UK and South Africa as they work
on job applications.
We had a target of positively impacting
the lives of 100,000 young people by
2025. After extraordinary commitment
from our passionate colleagues and
charity partners, we are proud to have
achieved this target several years early.
During FY23 we will develop new
ambitious targets for the outcomes and
impact of our Brighter Future Fund.
Another significant focus for our
community outreach work this year was
offering support to those impacted by
the terrible events unfolding in the
Ukraine. For example, colleagues in
Poland had their volunteering leave
entitlement increased from two to five
days, to help Ukrainian refugees as they
escaped across the border to Krakow
and beyond. We set up a charitable
giving page in favour of Polska Akcja
Humanitarna and double-matched all
funds raised on this page – using money
from our Brighter Future Fund to triple
the total. More information on this and
our other community outreach work can
be found on our website.
Environment
For the third year running, we have
achieved carbon-neutral status,
offsetting our scope 1, 2 and 3
emissions. Our other top priority has
been to continue developing a strategy
to reduce our relative emissions.
Last year we set ourselves the goal
of committing to the Science Based
Targets initiative
1
by the end of FY22.
We achieved this goal, and now have
24 months to define our pathway
to net zero. We have also continued
to look for improvements to our
environmental reporting. For example,
we are transitioning to a new process of
collecting emissions data on a quarterly
basis rather than an annual basis. We
were also pleased to retain our C grade
with the Carbon Disclosure Project.
Streamlined energy and carbon
reporting
Our carbon footprint for FY22 has been
prepared by an external consultant,
Energise, and includes our scope 1, 2
and upstream scope 3 emissions across
all Group companies. The data was
quantified in line with the GHG Protocol
standard and applying the most relevant
emissions factors sourced from the
Department for Environment, Food
and Rural Affairs’ 2020 UK Greenhouse
Conversion Factors for Company
Reporting, and other equivalent data
sources for our emissions outside of
the UK. Where data is not available,
standard estimation methods have been
applied to account for these emissions.
In relation to scope 1 and 2 emissions,
our total carbon footprint for the year,
using a location-based methodology,
was 2,682.05 tCO
2
e, or 1.12 tonnes per
employee. This is a 22.2% reduction
from last year. The reduction is mainly
due to the emissions associated
with operating our facilities falling
to zero for the year. After replacing
equipment last year, we did not need
to recharge any F-Gas in our data
centres which has had a significant
impact on our scope 1 emissions.
Pillar 3
We amplify our ESG impact
through collaboration
with like-minded partners.
The third pillar of our Brighter
Future framework focuses
on how collaboration helps
us address challenges around
educational equality, the
environment and the principles
of responsible business.
Stakeholders
¼ Our people
¼ Our communities
¼ Our suppliers
94,751
young lives positively impacted
through Brighter Future
Fundinitiatives
(FY21: 22,284, FY20: 3,819)
FIND OUT MORE AT
IGGROUP.COM/OUR
COMMITMENTSUSTAINABILITY
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022 33
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
GHG protocol scope Sub-category
Year ended
31 May 2022 tCO
2
e
Year ended
31 May 2021 tCO
2
e
Scope 1 Operation of facilities 0.00 4 37.18
Scope 1 Combustion 287.86 168.36
Scope 1 287.86 605.54
Scope 2 Purchased energy 2,394.18 2,320.83
Scope 2 2,394.18 2,320.83
Scope 1 and 2 emissions 2,682.05 2,926.37
Employees 2,393.00 2,034.50
Intensity ratio
2
Scope 1 and 2 emissions 1.12 1.44
Relevant change -22.1%
Global energy use 10,272,137 kWh 8,635,343 kWh
UK energy use 7,888,644 kWh 7,211,827 kWh
Overseas energy use 2,383,493 kWh 1,423,516 kWh
Scope 3 Business travel 83.51 15.36
Employee commuting 297. 28 1.51
Fuel and energy-related activities 860.33 566.31
Purchased goods and services 20,297.48 17,892.12
Waste generated in operations 116 . 5 0 57. 3 4
Homeworking 931.89 704.72
Scope 3 22,586.98 19, 237. 36
Grand total All three scopes (including homeworking) 25,269.03 22,163.73
Employees 2,393.00 2,034.50
Performance indicator All three scopes (including homeworking) 10.56 10.89
Relevant change -3.07%
There have been some significant
changes compared to last year, most
notably the acquisition of tastytrade,
which increased our scope 2 and 3
emissions. As some of our offices
started to reopen after the pandemic,
we have also seen increases in
our business travel and employee
commuting. However, our employee
headcount has also increased and
therefore when viewed on a relative
basis, our emissions per employee
have reduced by -3.07%, exceeding
our target of a -2.5% relative reduction.
We are actively managing our energy
efficiency. For example, we are working
on a set of new procurement standards
across the business in key areas which
will help us define our pathway to net
zero. We are committed to completing
this work by 2024. In the meantime,
wecontinue to offset all scope 1, 2 and
upstream scope 3 carbon emissions
and are carbon neutral in line with
PAS2060. All offsets are verified
by either the Gold Standard or UN
Clean Development Mechanism.
Suppliers
We have continued to embed the
principles of responsible and sustainable
business in our procurement processes
and in our collaboration with existing
suppliers. For example, we published a
new Vendor Code of Conduct, setting
out what suppliers can expect when
working with us and setting out our
expectations for suppliers. Furthermore,
in FY22 we completed a review of our
facilities contractors and increased
pay where necessary to ensure we are
fully compliant with the London Living
Wage recommendations. We are now a
signed-up member of the Living Wage
community and will ensure we align with
their recommendations in the future.
We are also looking for equivalent
standards to adopt in all of the countries
in which we have employees or, in lieu
ofsuch standards, will look to develop
our own.
1 The Science Based Targets initiative (SBTi) is a
partnership between Carbon Disclosure Project (CDP),
the United Nations Global Compact, World Resources
Institute and the World Wide Fund for Nature. They
drive ambitious climate action in the private sector by
enabling organisations to set science-based emissions
reduction targets.
2 As an intensity ratio we monitor our emissions
peremployee.
IG GROUP HOLDINGS PLC ANNUAL REPORT 202234
STRATEGIC REPORT
Summary of disclosure References to Annual Report
Governance
The Board approves environmental strategy and targets and has responsibility for budgets and funding.
Climate-related risks and opportunities are integrated into the Group’s Risk Management Framework and
the Board has overall accountability for the management of risk. Some of these risk governance
responsibilities are delegated to Board Committees.
Board and management responsibilities in relation to climate-related risks and opportunities are set out in
our ESG governance table and in our Corporate Governance Statement. Furthermore, the management of
climate-related risks and opportunities is incorporated into the environmental impact non-financial metric
in our bonus and sustained performance plan remuneration structures.
We first introduced a carbon-literacy training programme in FY21. In FY22 this was improved and updated
and sessions were run for the Board and our Executive Committee. This training will be updated and
delivered on an annual basis.
¼ See Chair’s
Introduction to
Corporate
Governance
statement,
page58
¼ See pages 35, 93
Strategy
Over the course of FY22, our understanding of the climate-related risks and opportunities affecting our
business has improved, enabling us to develop an environmental strategy. The aim of this strategy is to
have a clearly defined pathway to net zero in place by 2024. Progress towards defining our pathway is
improving our financial resilience in the face of the changing climate. Key achievements include:
¼ Formal commitment to the Science Based Target Initiative
¼ Starting to develop environmental procurement standards for key business areas including operations,
buildings, travel and other services
¼ Carbon literacy training for the Board and Executive Committee
¼ Maintaining carbon-neutral status in line with PAS 2060 (offsetting our scope 1 and 2 emissions and
upstream scope 3 emissions)
¼ See Risk
Management
section, pages
46-53
Risk management
In order to fully understand the climate-related risks and opportunities applicable to our business, we
engaged a consultant to help us produce a detailed climate-related risks and opportunities register. This
exercise was then repeated in the second half of FY22 and will be repeated on a bi-annual basis going
forward. A summary of the risks identified can be found on our Group website. It has been concluded that,
for now, neither these risks nor opportunities are material.
We identify climate-related risks, opportunities and materiality based on the We Mean Business risk
taxonomy and TCFD guidance. We group climate-related risks into two categories: physical risks which
relate to the physical impacts of climate change, and transition risks, which relate to the transition to
alow-carbon economy. They are analysed in relation to three possible climate-related scenarios:
(1)asmooth transition to <2ºC, (2) a disruptive transition to <2ºC, and (3) no acceleration of action (>3ºC),
andconsidered in relation to the short, medium and long term.
¼ See Risk
Management
section, pages
46-53
¼ https://www.
iggroup.com/
our-commitment-
sustainability/
our-environment
Metrics and targets
We assess climate-related risks and opportunities by looking at absolute and intensity-based energy
and(GHG) emission metrics, using ‘CO
2
per employee’ as our intensity metric. These are set out in our
Streamlined Energy and Carbon Report. We have been reporting scope 1 and 2 emissions since FY13 and
first reported upstream scope 3 emissions in FY20. We do not yet measure or report downstream scope 3
emissions but hope to include these emissions in our reporting when we have our pathway to net zero
defined – aiming for 2024. We do not anticipate that these emissions will be significant.
In May 2022 we made a formal commitment to the SBTi, and are working hard to develop an ambitious
science-based target. Pending this target, we aim to reduce our year-on-year carbon emissions by 2.5%.
¼ See pages 32
and 33
In accordance with the TCFD
recommendations, all material and
significant climate-related information
can be found in this Annual Report, as
signposted in the table below. We have
chosen to supplement these
disclosures with extra information on
our website.
We believe that these disclosures are
fully consistent with the task force’s
recommendations. We do not yet
measure or report downstream scope 3
emissions associated with the use of
our products but note that doing so is
optional under the Greenhouse Gas
Protocols (GHG). In any case, we are
working to better understand these
emissions but do not anticipate that
they will be significant.
ESG Report continued
Task Force on Climate-related Financial Disclosures
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022 35
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
Best Practice
Business ethics
We maintain high standards of ethics
across all elements of our business.
Weconduct our business in an ethical
manner, protecting principles of human
rights in all of our operations. For more
information about how the principles of
ethical business are embedded into our
governance, please refer to our ESG
Policy on our website.
As a UK-incorporated Company, we
abide by the UK Bribery Act 2010
and we have a Share Dealing Code,
aDisclosure Committee and associated
policies to ensure that we meet
the requirements of market abuse
regulations. Furthermore, we have
global policies to comply with anti-
bribery and anti-corruption laws, which
include employees wishing to give or
receive gifts or hospitality. We do not
make or endorse facilitation payments.
Every year all employees receive
mandatory anti-bribery and corruption
training, and market abuse training,
through an e-learning module which
includes a knowledge assessment.
We make charitable donations that
arelegal and ethical under local laws
and practices, but we don’t make
contributions to political parties.
Accountable leadership
In FY22 we focused on three elements
of accountable leadership. Firstly, we
maintained a diverse leadership team
interms of ethnic and gender diversity.
Secondly, we worked hard to ensure
ourleadership team have access to the
learning opportunities they need. For
example, we offered carbon literacy
training to the Board and Executive
Committee for the second year running.
Thirdly, we continued to ensure the
leadership team is incentivised to deliver
on our commitment to sustainable and
responsible business. For more details
about how ESG is integrated into the
sustained performance plan and the
bonus, see page 93.
Open and transparent
Operating in an open and transparent
manner remains a top priority. Last year
we published our ESG Policy and
created an ESG reporting map to
demonstrate how we approach
responsible and sustainable business.
We’ve updated the reporting map for
FY22 and will keep the policy up to date.
Our tax strategy is published on our
website. This year we paid £131.3 million
(2021: £119.0 million) to tax authorities
globally. As was the case last year, we
did not accept any government support
in relation to the Covid-19 pandemic.
We paid £97.4 million in corporate
income taxes (2021: £83.0million).
More details on our taxes paid and
onour effective tax rate for FY22 can
be found in the Financial Statements.
Pillar 4
The fourth pillar of our
Brighter Future framework
is concerned with setting
high standards of business
ethics, accountability and
transparency, and ensuring
that our policies and
governance structures help
meet these standards.
Stakeholders
¼ Our shareholders
¼ Our regulators
¼ Our people
¼ Our clients
¼ Our communities
43.3%
ESG factors contribute to 43.3% of
Sustained Performance Plan non-
financial metrics
ESG governance
Oversight
IG Group Board of Directors
ESG Committee
Chair: Sally-Ann Hibberd
Board Committees as appropriate
Responsible
IG Group Executive Committee
Sponsor: Jon Noble
Executive Committee ESG working group
Delivery
Group Head of ESG
ESG Officer
Brighter Future
Champions
Enterprise
Leadership Group
IG Employee
Networks
STRATEGIC REPORT
36
Chief Financial Officer’s Statement
Another year of
record performance
I am delighted to report another year
of record revenue and profits, against
a challenging comparative which
included the peaks of pandemic-related
market volatility. Total revenue from
continuing operations was £973.1
million, up 16% (FY21: £837.6 million).
Excluding the foreign exchange gain
associated with the financing of the
tastytrade acquisition, adjusted total
revenue was £967.3 million, up14%.
Excluding tastytrade, adjusted total
revenue was still up 1%. This outstanding
performance is reflective of the high-
quality client base of ambitious, active
traders that we are able to attract,
and the excellent client service and
educational resources and support
that we provide in order to retain
them. We reiterate our medium-term
guidance for total revenue of 5-7%
in Core Markets+ and 25-30% in the
High Potential Markets segments.
We continue to practice good cost
management, while also ensuring that
we invest steadily and appropriately
in our businesses and functions.
We recognise technology as a key
asset, in which we continually invest
to innovate and increase resilience,
security, and capacity. Over the
last for years, for example, we have
invested approximately £125 million
in these areas, demonstrating our
ability to continually invest and stay
atthe forefront of technology trends.
During the year, we incurred some
one-off and non-cash recurring items.
These were related to the tastytrade
transaction, the sale of Nadex and Small
Exchange, the debt refinancing and the
revaluation of the Zero Hash convertible
note. Excluding these items, our
adjusted profit before tax margin for
FY22 was 51% (FY21: 56%).
Another year of record revenue
performance puts us in a very
strong financial position as we
execute our strategy to become
amore diversified business.”
Charles A Rozes
Chief Financial Officer
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022 37
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
Profit before tax for the year was up
7% to £477.0 million (FY21: £446.0
million). On an adjusted basis, profit
before tax was £494.3 million, up 4%
on prior year (FY21: £473.6 million).
The adjusted effective tax rate was
17.0%, driven by standard UK tax
incentives and adjustments to prior
year estimates. Our profit after tax for
the year was £396.1 million, or £410.5
million on an adjusted basis, up 4%.
Including profit from discontinued
operations, profit for the period was
£503.9 million, up 36%. Basic earnings
per share from continuing operations
was 92.9 pence (FY21: 99.8 pence), or
96.3 pence on an adjusted basis (FY21:
107.3 pence), down due to the shares
issued for the tastytrade acquisition.
We are a highly cash-generative
business, able to convert our OTC
derivatives revenue to cash on the same
day. The conversion rate of operating
profit to own funds remains consistently
above 100%.
During the year, we have seen some
significant balance sheet movements,
with our goodwill and intangibles
balances increasing due to the
tastytrade acquisition. Own funds
increased due to profits made during
the year, the sale of Nadex and Small
Exchange, offset by the cash
consideration paid for tastytrade.
Regulatory capital and liquidity
remained very strong through the
period, bolstered by our inaugural public
debt issuance of £300 million of
investment-grade, 7-year senior
unsecured notes and the increased size
of our committed revolving credit
facility, which is now a £300 million
facility. The debt capital markets
issuance in November 2021 attracted
strong investor demand, and provided
longer-term financing through 2028.
Our new RCF further expands our
on-demand available liquidity to support
our strategic growth plans.
The Group’s broker margin requirement
in support of our risk management
program at year end was £629.5 million,
and reached a peak during the year of
£774.7 million in comparison to a year
end requirement of £590.9 million and
peak requirement of £683.3 million in
FY21. As a result of our record profits,
strong cash conversion, as well as
purchases and disposals during the year,
own funds at 31 May 2022 were
£1,253.8 million, up from £1,058.5
million at 31 May 2021.
Our record profits and comprehensive
risk management programme further
strengthened our capital resources.
In January 2022, we adopted a new
regulatory capital framework, the
Investment Firms Prudential Regime
(IFPR). For an initial transitory period,
our regulatory capital requirement
remains at a fixed amount of £497.4
million. At 31 May 2022 our regulatory
capital resources were £1,025.6 million,
up from £860.7 million at 31 May 2021.
This translates to a headroom above
the regulatory capital requirement of
£528.2 million, including all profits from
FY22, though prior to the execution
of the share buyback programme.
During the year, the Board conducted
a number of discussions around our
uses of capital. The outcome of these
discussions is set out in our new capital
allocation framework. The framework
provides the right balance for all
our stakeholders, ensuring there is
sufficient ability for investment in the
Company, as well as returns for our
shareholders. In line with the capital
allocation framework, the Board has
approved a final dividend of 31.24
pence, which would result in a full-year
dividend of 44.2 pence per share, an
increase of 1 pence from our FY21
dividend of 43.2 pence per share.
Given our current strong financial
position following three consecutive
record years of revenues and profits,
wehave also announced a share
buyback programme of up to £150
million. We would expect this to be
substantially completed within FY23.
We have reconfirmed our medium-
term total revenue guidance of 5-7%
in the Core Markets+ and 25-30% in
the High Potential Markets portfolio
and remain confident in achieving this
guidance. We anticipate a profit before
tax margin just above the mid-40s in
FY23, and then increasing slightly over
the medium term to the high-40s, which
we see as the sustainable margin for the
Group. We anticipate an effective tax
rate in FY23 of around 19%, and then
increasing beyond FY23 to be closer to
the forecasted UK Corporate Tax rates.
In summary, another year of record
revenue performance puts us in a very
strong financial position as we execute
our strategy to become a more
diversified business.
Charles A Rozes
Chief Financial Officer
20 July 2022
IG GROUP HOLDINGS PLC ANNUAL REPORT 202238
STRATEGIC REPORT
Business Performance Review
Summary Group Income Statement
£ million (continuing operations) FY22
FY22
Adjusted FY21
FY21
Adjusted Change %
Adjusted Change
%
Net trading revenue
1
972.3 966.5 837.3 845.2 16% 14%
Net interest on client money 0.8 0.8 0.3 0.3
Total revenue 973.1 967.3 837.6 845.5 16% 14%
Other operating income and betting duty 6.1 4.6 6.1 6.1
Net operating income 979.2 971.9 843.7 851.6
Total operating costs
2, 3
(501.9) (464.9) (393.4) (373.8) 28% 24%
Operating profit 477.3 507.0 450.2 477.8 6% 6%
Other net gains/(losses)
4
11.1 (2.3) (0.4) (0.4)
Net finance cost
5
(11. 4 ) (10.4) (3.8) (3.8)
Profit before tax 477.0 494.3 446.0 473.6 7% 4%
1 Adjusted excludes £5.8 million foreign-exchange hedging gain associated with the financing of the tastytrade acquisition (FY21: loss of £7.9 million)
2 Operating costs include net credit losses on financial assets
3 Adjusted operating costs excludes £33.7 million of costs and recurring non-cash costs associated with the tastytrade acquisition and integration and £3.3 million relating to the
proposed sale of Nadex and Small Exchange (FY21: £19.6m of one-time costs associated with the tastytrade acquisition)
4 Adjusted other net gains / (losses) excludes £9.3 million FV gain on revaluation of Zero Hash Holdings Limited (Zero Hash), and £4.1 million of gains on sale of Small Exchange and
disposal of Zero Hash, £2.3 million loss from associate
5 Adjusted excludes £1.0 million of accelerated financing expense associated with the debt issuance
Statutory results
On 1 March 2022 we completed the sale of Nadex and Small Exchange to crypto.com, therefore Nadex is presented as a
discontinued operation. Our share of the losses from our minority investment in Small Exchange for the period during which
weowned it will continue to be presented within continuing operations.
On a statutory basis, net trading revenue was £972.3 million, up 16% on prior year, reflecting the inclusion of tastytrade revenue
from 28 June 2021 following completion.
Revenue performance benefited from the size and quality of the active client base, which now includes 98,000 tastytrade
clients, who share a similar demographic profile to those of IG. Total active clients, excluding those from tastytrade, remains
significantly larger than the pre-pandemic period.
Statutory operating costs were £501.9 million, 28% higher than FY21, reflecting the inclusion of tastytrade’s cost base, and
one-off and recurring non-cash costs in relation to the tastytrade acquisition and integration, and costs relating to the sale of
Nadex and Small Exchange.
Other net gains of £11.1 million arise from transactions relating to the Group’s investments in its associates during the year.
Thenet gains include the Group’s share of losses from associates, the movement of the fair value of convertible debt associated
with Zero Hash , and gains from sale of holdings in associates.
Net finance costs were £11.4 million, increasing from prior year due to additional debt in the period.
The Group’s statutory profit before tax for FY22 was £477.0 million, 7% higher than FY21.
Adjusted results
The following section analyses results from continuing operations on an adjusted basis, which excludes a £5.8 million foreign-
exchange gain related to financing of the tastytrade acquisition; £33.7 million of costs relating to the tastytrade acquisition,
including £28.0 million of amortisation of acquisition related intangibles; £3.3 million relating to the sale of Nadex and our
investment in Small Exchange; £1.0 million of financing costs relating to the new debt issuance; other net gains related to the
sale of Small Exchange and disposal of Zero Hash of £4.1 million, and £9.3 million fair value gain on Zero Hash on a convertible
note revalued in the period.
Adjusted net trading revenue was £966.5 million, 14% higher than prior year. Excluding tastytrade, which the Group acquired
on28 June 2021, the adjusted net trading revenue was £856.4 million, 1% higher than FY21, reflecting the continued strength
ofour core business despite less favourable market conditions.
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022 39
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
Total revenue, which includes interest income, was £967.3m, up 14% on FY21.
Adjusted operating costs from continuing operations were £464.9 million, 24% higher than prior year, reflecting the addition
oftastytrade.
Adjusted operating profit from continuing operations was £507.0 million, up 6% on FY21, and profit before tax was £494.3 million
4% higher than prior year.
Net trading revenue performance by product
Adjusted net trading revenue from continuing operations
(£ million) FY22 FY21 Change %
OTC derivatives 811.5 798.2 2%
Exchange traded derivatives 121.2 8.3 nm
Stock trading and investments 33.8 38.7 (13%)
Group 966.5 845.2 14%
Active clients
(000)
Revenue per client
(£)
FY22 FY21 Change % FY22 FY21 Change %
OTC derivatives 199.8 216.3 (8%) 4,063 3,690 10%
Exchange traded derivatives
1
104.5 5.4 nm 1,142 913 25%
Stock trading and investments 93.2 89.5 4% 363 432 (16%)
Group
2
381.5 291.2 31%
1 Exchange traded derivatives revenue per client calculation excludes revenue generated from the Group’s market maker on Nadex
2 Total Group active clients have been adjusted to remove the clients who are active in more than one product category (multi-product clients) to give a unique client count. In FY22 there
were 16,000 multi-product clients, compared with 19,900 in FY21
OTC derivatives
OTC derivatives net trading revenue in FY22 was £811.5 million, 2% higher than FY21. OTC revenue now represents 84% of
Group revenue, down from 94% in FY21, consistent with our strategic goal of diversifying our sources of revenue through
growth in exchange traded derivatives and stock trading revenues.
OTC active clients were down 8% on FY21 reflecting the moderation in trading activity and reduced levels of new clients
onboarded, down 32% from the elevated levels of demand seen in FY21, however remain at levels materially higher than the
pre-pandemic period. Average revenue per client however was 10% higher reflecting a change in client mix with less dilution
ofrevenue per client from new clients, as seen in FY21.
UK and EU revenue in FY22 was £431.5 million, 3% higher than in FY21. The impact of a 14% reduction in active clients was
offset by a 20% increase in the average revenue per client, the result of a change in the client mix, consistent with other areas
ofthe business.
Japan revenue of £98.5 million was 43% higher than FY21 driven by a 53% increase in active clients as new client acquisition
continued to be exceptionally strong in the year. First trades increased 53% as Japan continues to benefit from the increased
focus on localisation, brand building, and successful marketing relationships.
Australia revenue of £88.3 million was 26% lower than FY21, reflecting the impact of Australian Securities & Investments
Commission (ASIC) regulations, which were introduced in FY21. As a result, the active clients in the period decreased by 28%,
although revenue per client increased by 2% due to the change in client mix. Revenue from Australia remains higher than the
pre-pandemic period.
IG GROUP HOLDINGS PLC ANNUAL REPORT 202240
STRATEGIC REPORT
Exchange traded derivatives
Net trading revenue from exchange traded derivatives, excluding Nadex as a discontinued operation, was £121.2 million, and
represented 13% of Group revenue (FY21: 1%). tastytrade net trading revenue was £110.1 million, while revenue from Spectrum,
the Group’s multi-lateral trading facility, was £9.3 million.
With the addition of tastytrade, the number of exchange traded derivatives clients increased to 104,500 (FY21: 5,400), 27% of
the total active client base of the Group. First trades increased significantly, reflecting the inclusion of tastytrade.
tastytrade net trading revenue was £110.1 million, up 15% on the prior year on a pro forma basis. Total revenue for tastytrade
was £112.0 million, which includes interest income, increasing 16% on a pro forma basis. Active clients reduced by 2%, reflecting
some normalisation from the high levels of activity in FY21, which was more than offset by a 17% increase in average revenue
per client.
Spectrum revenue of £9.3 million nearly doubled and was 90% higher, driven by a 27% increase in the active client base and
a50% increase in average revenue per client as the client base continues to establish. This year Spectrum welcomed two
additional brokers and further growth is expected in FY23 and beyond, as we integrate additional third-party brokers and plan
to integrate two tier 1 European banks as product issuers later this year.
Stock trading and investments
Revenue from stock trading and investments was £33.8 million (FY21: £38.7 million) with assets under administration of £3.3
billion at the period end (31 May 2021: £3.2 billion). In the year, stock trading transaction fees, which were previously netted off
against revenue, were reallocated to operating costs, increasing both net trading revenue and costs by £3.0 million. Including
this, net trading revenue was down 13%. Active clients increased 4% and average revenue per client reduced by 16% due to
both a reduction in trade frequency as market conditions have moderated, and a change in equity mix, with clients trading
fewer US equities.
Operating costs
Total adjusted operating costs for FY22 were £464.9 million, 24% higher than FY21 primarily reflecting the acquisition
oftastytrade.
Adjusted operating costs from continuing operations
£ million (unless stated) FY22 FY21 Change %
Fixed remuneration 150.1 127.0 18%
Advertising and marketing 87.1 67.4 29%
Revenue related costs 45.3 28.3 60%
IT, structural market data and comms 35.0 24.4 43%
Regulatory fees 12.9 9.1 41%
Depreciation and amortisation 28.5 24.8 15%
Other costs 48.1 42.1 14%
General bonus 32.6 29.7 10%
Share-based compensation 17.8 11. 2 60%
Sales bonuses 7. 5 9.8 (23%)
Total operating costs 464.9 373.8 24%
Headcount at period end 2,507 2,067 21%
Fixed remuneration was £150.1 million, an increase of 18%. Group headcount at 31 May 2022 was 2,507, up 21% on 31 May
2021, reflecting the addition of around 200 tastytrade employees, and additional headcount in our technology, operations,
riskand compliance functions to add capacity to the larger business and support on key projects.
This increase also reflects some inflationary pay increases, offset by favourable translational foreign-exchange rates compared
with the prior year.
Advertising and marketing spend increased by 29% to £87.1 million, reflecting the addition of tastytrade costs.
Business Performance Review continued
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022 41
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
Revenue related costs are variable items which typically fluctuate with the level of client activity and include trading fees for
share dealing and US options and futures, client payment charges, variable market data charges, and provisions for client and
counterparty credit losses. In total they were £45.3 million, 60% higher than FY21, reflecting the addition of the tastytrade
costs. This also includes the impact of reclassifying £3.0 million of stock trading transaction fees, which in FY21 were reported
as an offset to revenue.
IT maintenance, structural market data charges and communications costs were £35.0 million, an increase of 43% on FY21.
Thisreflects additional investment in technology to innovate new platform features, support the larger active client base,
andbuild capacity for future growth as well as the addition of tastytrade costs.
Regulatory fees, which include the Financial Services Compensation Scheme (FSCS) levy were £12.9 million in FY22, 41% higher
than FY21. This reflects the increased eligible income of the relevant entities, as well as the addition of tastytrade costs.
Depreciation and amortisation costs increased 15% to £28.5 million reflecting the addition of tastytrade costs.
The charge for the general bonus pool was £32.6 million, up 10% on FY21. This reflects an increase in eligible employees but
was offset by a release of prior period accruals.
Share-based compensation costs relate to the share incentive plans for executives and senior management. These costs
increased by 60%, reflecting an increased number of participants, and outperformance on internal targets, compared with
aprior year charge which was lower due to staff departures in the year.
Sales bonuses decreased by 23% to £7.5 million, reflecting lower commission payments to sales staff for the onboarding and
management of their own-sourced high-value clients.
Earnings Per Share
£ million (unless stated) FY22
FY22
Adjusted FY21
FY21
Adjusted Change %
Adjusted Change
%
Profit before taxation from
continuingoperations 477.0 494.3 446.0 473.6 7% 4%
Taxation (80.9) (83.8) (77.4) (77.4) 5% 8%
Profit after taxation from
continuingoperations 396.1 410.5 368.6 396.2 7% 4%
Profit after taxation from
discontinuedoperations 107. 8 107. 8 3.3 3.3 Nm Nm
Profit after tax for the period 503.9 518.3 371.9 399.5 36% 30%
Weighted average number of shares
forthe calculation of EPS (millions) 426.3 426.3 369.2 369.2 15% 15%
Basic earnings per share
(pence per share) 92.9 96.3 99.8 107.3 (7%) (10%)
Profit before tax was £477.0 million in FY22, and £494.3 million on an adjusted basis, 4% higher than FY21.
The FY22 effective tax rate (ETR) was 17.0% based on profit before tax from continuing operations and 17.0% based on adjusted
profit before taxation (FY21: 16.3%). The ETR is lower than the main rate of corporation tax of 19% in the UK, where the majority
ofthe Group’s profits are taxed, primarily as a result of standard UK tax incentives and adjustments to prior year estimates.
TheETR for FY23 is anticipated to be approximately 19% on an adjusted basis. The ETR is dependent on a mix of factors
including taxable profit by geography, tax rates levied in those geographies and the availability and use of taxable losses.
Thefuture ETR may also be impacted by changes in our business activities, client composition and regulatory status,
whichcould affect our exemption from the UK Bank Corporation Tax surcharge.
Profit after tax was 36% higher than FY21 and 30% higher on an adjusted basis. Basic EPS was 7% lower than FY21 and 10%
lower on an adjusted basis. This is primarily a result of the additional 61 million shares issued by the Group as part of the
consideration to acquire tastytrade.
IG GROUP HOLDINGS PLC ANNUAL REPORT 202242
STRATEGIC REPORT
Dividend
A proposed final dividend of 31.24 pence per share will be paid on 20 October 2022 to those shareholders on the register
at the close of business on 23 September 2022. This would represent a total FY22 dividend paid of 44.2 pence per share
(FY21: 43.2 pence per share).
Summary Group Balance Sheet
The balance sheet is presented on a management basis which reflects the Group’s use of alternative performance measures
tomonitor its financial position, with particular focus on own funds and liquid assets which are deployed to meet the Group’s
liquidity requirements. These alternative performance measures are reconciled to the corresponding UK adopted IAS balances
in the appendix.
£ million 31 May 2022 31 May 2021 Change %
Goodwill 604.7 107. 3 468%
Intangible assets 292.1 32.7 793%
Property, plant and equipment
1
16.7 17.4 (4%)
Operating lease net assets (2.0) (1.9) 5%
Investments in associates 14.8 – nm
Fixed assets 926.3 155.5 495%
Own cash 1,245.9 655.2 89%
Issued debt/long-term bank borrowings
2
(299.2) (100.0) 199%
Client funds held on balance sheet
3
(520.9) (354.3) 47%
Amounts due from brokers 657.1 710.6 (7%)
Own funds in client money 64.2 60.9 5%
Liquid assets threshold requirement/Liquid asset buffer 106.7 86.1 23%
Own funds 1,253.8 1,058.5 18%
Working capital (82.5) (86.4) (5%)
Net current assets held for sale 0.4 – nm
Tax payable (20.5) (6.4) 220%
Net deferred tax (liability)/asset (49.7) 12.1 511%
Net assets 2,027.8 1133 . 3 79%
1 Excludes right-of-use assets
2 Excludes capitalised fees
3 Includes turbo warrants
The Group has recognised a £770.8 million increase in fixed assets during the period, primarily as a result of the acquisition of
tastytrade, which completed on 28 June 2021.
The Group has assessed the impact of climate risk on the balance sheet and have concluded that there is no material impact on
the financial position of the Group for the year ended 31 May 2022.
Liquidity
The Group maintains a strong liquidity position, ensuring that it has sufficient liquidity under both normal circumstances and
stressed conditions to meet its working capital and other liquidity requirements, which include broker margin requirements,
theregulatory and working capital needs of its subsidiaries, and the funding of adequate buffers in client money accounts.
The Group’s available liquidity comprises assets that are available at short notice to meet additional liquidity requirements,
which are typically increases in broker margin. The Group’s liquid assets increased by £561.1 million during the period,
compared to a smaller £164.1 million increase for liquidity requirements comprising broker margin, overseas cash balances,
own funds in client money and assets held to satisfy the liquid assets threshold requirement.
Business Performance Review continued
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022 43
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
£ million 31 May 2022 31 May 2021 Change %
Own cash 1,245.9 655.2 90%
Amounts due from brokers 657.1 710.6 (8%)
Own funds in client money 64.2 60.9 5%
Liquid assets threshold requirement/Liquid asset buffer 106.7 86.1 23%
Liquid assets 2,073.9 1,512.8 37%
Broker margin requirement (629.5) (590.9) 7%
Cash balances in non-UK subsidiaries (342.9) (248.0) 38%
Own funds in client money (64.2) (60.9) 5%
Available liquidity 1,037.3 613.0 69%
of which:
Held to meet regulatory liquidity requirements 106.7 86.1 24%
Dividend due 134.8 130.4 3%
The Group’s own cash balance of £1,245.9 million has increased by £590.7 million driven by a £199.2 million increase in third
party debt, £166.6 million increase in client funds held on balance sheet and £53.5 million decrease in amounts at brokers.
TheGroup measures the strength of its balance sheet using its ‘own funds’ balance which is a broader and more stable measure
of the Group’s liquidity position than cash. The Group’s own funds position is explained in the next section.
Amounts due from brokers comprises cash and UK Government securities held on account by the Group’s hedging
counterparties, the valuation of open derivative positions and the valuation of physical cryptocurrency assets. During FY22 and
driven by the ongoing high frequency and mix of client trading activity, the Group experienced record levels of broker margin,
with a maximum margin requirement of £774.7 million in November 2021.
Own funds in client money represents the Group’s own cash held in segregated client funds in accordance with regulatory
requirements, including the UK’s FCA Client Asset Sourcebook (CASS) rules. This increased by £3.3 million to £64.2 million,
as a result of trading conditions on the last day of the month.
The Group holds a combination of UK Government securities and cash to meet its regulatory liquidity requirements, which
haveincreased during the period. From 1 January 2022, the liquid asset buffer requirement that the Group had been subject
tohas been replaced by a new regime within the Investment Firms Prudential Regime rules. This includes a basic liquid assets
requirement and a liquid assets threshold requirement, which can be met with a broader range of assets. As at 31 May 2022,
this requirement was £106.7 million, 24% higher than the liquid assets buffer requirement at 31 May 2021.
The increase in liquidity requirements was primarily driven by an increase in funds in non-UK entities. The Group regularly
repatriates cash from its overseas subsidiaries and for liquidity management and planning purposes, the Group conservatively
excludes cash held by subsidiaries outside the UK from available liquidity. The amount of cash held in entities outside the
UK was £342.9 million as at 31 May 2022 (31 May 2021: £248.0 million), £94.9 million higher than as at 31 May 2021, due to
increased overseas cash requirements arising from the acquisition of tastytrade and increased client funds recognised on
balance sheet in overseas entities, along with additional funds held in the US to settle tax payable following the sale of Nadex
and Small Exchange.
In addition to the cash recognised on the balance sheet, as at 31 May 2022, the Group held £2,577.9 million (31 May 2021:
£2,710.3 million) of client money in segregated bank accounts, which are not recognised on the Group’s balance sheet.
Thesefunds are held separately from the Group’s own cash balances and are excluded from the Group’s liquid assets.
IG GROUP HOLDINGS PLC ANNUAL REPORT 202244
STRATEGIC REPORT
Own Funds
Own funds include liquid assets, less debt and client funds on its balance sheet. As at 31 May 2022, the Group had a cash
balance of £1,245.9 million (31 May 2021: £655.2 million) compared with an own funds balance of £1,253.8 million (31 May 2021:
£1,058.5 million).
£ million 31 May 2022 31 May 2021 Change %
Liquid assets 2,073.9 1,512.8 37%
Client funds on balance sheet (520.9) (354.3) 47%
Issued debt/Long-term borrowings (299.2) (100.0) 199%
Own funds 1,253.8 1,058.5 18%
Client funds on balance sheet are funds which are deposited with the Group’s Swiss banking subsidiary, IG Bank SA, and client
funds held by other subsidiaries which are not subject to the same legal or regulatory protections as client money held off
balance sheet, including funds held by the Group under title-transfer collateral arrangements.
The Group issued £300 million of investment-grade, 7-year senior unsecured bonds as part of a comprehensive debt
refinancing exercise. The majority of the proceeds were used to repay £250 million, short-dated term loans and following the
refinancing exercise, total available credit facilities have risen from £375 million as at 31 May 2021, to £600 million as at 31 May
2022, with the potential to rise to £700 million if the new revolving credit facility is increased in size. The £300 million committed
revolving credit facility was undrawn at 31 May 2022 (31 May 2021: undrawn).
Own Funds Flow
Own funds of the Group have increased by £195.3 million during the period, predominantly as a result of own funds generated
from operations and the sale of Nadex and Small Exchange, which offset the consideration paid to acquire tastytrade and the
dividends paid by the Group.
£ million FY22 FY21
Own funds generated from operations 536.5 505.8
as % of operating profit 112 % 111%
Taxes paid (99.2) (83.0)
Net own funds generated from operations 437. 3 422.8
Net interest and fees paid (13.2) (4.8)
Capital expenditure and capitalised development costs (17. 5) (16.0)
Net own funds movement from acquisitions and disposals of subsidiaries and investments in
associates (14.7) –
Purchase of own shares held in employee benefit trusts (6.7) (0.2)
Pre-dividend increase in own funds 385.2 401.8
Dividends paid (186.2) (159.7)
Increase in own funds 199.0 242.1
Own funds at start of the period 1,058.5 832.5
Increase in own funds 199.0 242.1
Impact of movement in exchange rates (3.7) (16 .1)
Own funds at the end of period 1,253.8 1,058.5
The Group’s own funds generated from operations of £536.5 million, £30.7 million higher than in FY21. These funds were
reduced by comparatively higher taxes paid driven by the sale of Nadex and Small Exchange, and the own funds used to acquire
tastytrade which were partially offset by the net own funds generated from sale of Nadex and Small Exchange.
The Group recognised an increased own funds outflow to acquire shares in the employee benefit trust, as shares in the market
were used to satisfy vesting awards rather than the issue of new shares.
The Group also recognised an increased dividend outflow during the year following the issue of 61 million shares to
acquiretastytrade.
Business Performance Review continued
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022 45
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
Regulatory Capital
The Group is supervised on a consolidated basis by the FCA in the UK, which requires it to hold sufficient regulatory capital at
both Group and individual entity levels to cover risk exposures, valued according to applicable rules, and any additional
regulatory financial obligations imposed.
Shareholders’ funds comprise share capital, share premium, retained earnings and other reserves, and as at 31 May 2022
totalled £2,027.8 million (31 May 2021: £1,133.3 million). The Group’s regulatory capital resources are an adjusted measure of
shareholders’ funds, and as at 31 May 2022 totalled £1,025.6 million (31 May 2021: £860.7 million), taking into account FY22
profits which are included in the regulatory capital calculation following approval from the FCA.
£ million 31 May 2022 31 May 2021
Shareholders’ funds 2,027.8 1,133.3
Less foreseeable/declared dividends (134.8) (130.4)
Less goodwill and intangible assets (833.7) (140.0)
Less Deferred tax assets and significant investments in financial sector entities (32.3) –
Less adjustment for prudent valuation (1.4) (2.2)
Regulatory capital resources 1,025.6 860.7
Total requirement – £ million 497. 4 491.1
Capital headroom – £ million 528.2 369.6
From 1 January 2022 the Group is subject to the Investment Firms Prudential Regime, which has changed the basis of
calculation of the Group’s regulatory capital. During the transitional period, the regulatory capital requirement remains
broadlyunchanged.
The Group’s regulatory capital resources as at 31 May 2022 were £1,025.6 million (31 May 2021: £860.7 million) and the
capitalrequirement as at 31 May 2022 was £497.4 million (31 May 2021: £491.1 million). This translates to a capital headroom
of£528.2 million (31 May 2021: £369.6 million), demonstrating the Group’s solid capital base and the minimal impact
ofthechange in regulatory rules.
IG GROUP HOLDINGS PLC ANNUAL REPORT 202246
STRATEGIC REPORT
Risk Management
Effective risk management is
essential in achieving our
strategy and business
objectives, and to preserve our
strong financial position and
regulatory reputation. The
Board is responsible for
ensuring that we maintain an
appropriate risk management
culture, supported by a robust
Risk Management Framework.
Risk Management Framework
Risk culture
Risk governance
We have an established framework to
identify, measure, manage, monitor and
report the risks faced by the business.
This includes the risk that our conduct
may pose to the achievement of fair
outcomes for clients, or to the sound,
stable, resilient and transparent
operation of financial markets.
This framework provides the Board with
assurance that our risks, including the
risks relating to the achievement of the
our strategic objectives, are understood
and managed in accordance with our
appetite and tolerance levels.
The RMF is supported by policies such
as credit risk, market risk, liquidity,
technology, operational risk, information
security, vendor, business continuity,
conduct and whistleblowing. The RMF
and supporting frameworks are
extended across tastytrade and the
business model has been considered.
Embedding a sound risk culture is
fundamental to the effective operation
of our Risk Management Framework and
sets the tone for broader conduct in all
business activities, values and expected
behaviours. Central to our risk culture
isa commitment to integrity and to
principles of responsible business.
Thisis driven by individuals with defined
rolesand responsibilities over their
respective areas as detailed under the
Senior Managers Certification Regime
inthe UK.
We operate a ‘three lines’ Risk
Governance Model.
1. Business functions
1st Line functions have the primary
responsibility for the risk management
of their respective risks, including
day-to-day responsibility for ensuring
that business areas operate within their
risk appetite. They are responsible for
the identification, assessment and
management of risks faced, in line with
the approved policies and procedures.
2. Risk and control functions
The 2nd Line functions operate
independently from 1st Line functions,
with the dual objective of providing
advisory and oversight services. While
other functions may perform some
advisory and oversight activities,
this is the main role of the Risk and
Compliance functions. The Risk and
Compliance teams maintain our risk
management and control policies,
provide independent analysis and
monitoring of our risks against appetite,
while staying abreast of industry
and regulatory developments that
might require enhancements to the
Risk Management Framework.
3. Internal Audit
The 3rd Line function has responsibility
for assurance and is performed by
Internal Audit. Internal Audit helps the
Board and Executive team protect the
assets, reputation and sustainability
of the organisation by providing
independent, objective assurance
reviews designed to add value and
improve our operations. The scope of
the annual audit plan includes reviews
of the Risk Management Framework,
along with the management of the
Group’s principal risks. This includes
assessments of the design and
operating effectiveness of controls,
governance structures and processes.
The ERC meets weekly to discuss risks
requiring executive-level oversight and
management, with the frequency
reflecting the commitment of senior
management to play an active role in
day-to-day risk management.
Three lines of defence
1
2
3
Non-Executive oversight of the Risk
Management Governance Framework
has been delegated by the Board to
theBoard Risk Committee, with
executive and operational oversight
provided through the Executive Risk
Committee (ERC).
Specific sub-committees are
delegatedadditional oversight
withmembership comprised of
management with subject matter
expertise. Examples of these committees
are: Best Execution, Technology,
Information Security, Capital & Liquidity,
Vendor, Conduct &Operational Risk,
andTransaction Reporting.
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022 47
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
Risk appetite
Risk taxonomy
1. Regulatory environment risk
The risk that we face enhanced
regulatory scrutiny with a higher
chance of regulatory action, or 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.
Our Risk Appetite Statement (RAS)
details the acceptable levels of risk
towhich we are willing to be exposed,
soas to allow for a profitable business.
The RAS is supported by Key Risk
Indicators (KRIs) that are used to identify
instances which require escalation
andinvestigation.
KRIs consist of two distinct categories:
1. Board-Approved Limits (BALs)
Board approved thresholds and
limitsare set which serve to raise
awareness of increased levels of risk.
Early warning (Amber) thresholds
areused to highlight increasing risk
exposure, enabling action to be taken
prior to exceeding a pre-defined risk
limit (Red).
4. Conduct and operational risk
The risk that our conduct poses
tothe achievement of fair outcomes
for consumers or the financial
markets. The risk of loss resulting
from inadequate or failed internal
processes, people, systems
orexternal events.
Within each of these broad
categories the taxonomy identifies
more detailed risks as outlined in the
tables on the following pages (48-53).
It is the responsibility of the risk
owner to manage and explain what
actions have been taken once an
Amber threshold has been breached.
All efforts must be made to avoid
aRed breach. In the event of a
Redbreach, action must be taken,
without discretion, to ensure
wecome back insidethe BAL.
Anexplanation must be provided
tothe Board detailing the matter
andwhy the BAL was breached.
2. Escalation thresholds
For risks where limits cannot be
set,abreach of a defined Amber
threshold triggers escalation to
management, which should result
inconsideration being given as to
what appropriate actions, if any, are
taken.Red threshold breaches are
reported to the Group Board either
immediately or on a monthly basis,
depending on whether the KRI has
been flagged for immediate
escalation by the Board.
2. Commercial risk
The risk that our performance
isaffected by adverse market
conditions, failure to adopt an
effective business strategy
orcompetitors offering more
attractive products or services.
3. Business model risk
The risk we face arising from
thenature of our business and
business model, including market,
credit and liquidity risks and capital
adequacy adherence.
Risk
Threshold
Risk
Tolerance
Risk
Appetite
IG GROUP HOLDINGS PLC ANNUAL REPORT 202248
STRATEGIC REPORT
Principal Risks
1. Regulatory environment risk
Regulatory risk
Risk
We are subject to enhanced regulatory scrutiny
andtherefore face a higher chance of investigation,
enforcement or sanction by financial services
regulators. This may be driven by internal factors,
suchas the strength of our control framework or its
interpretation, or the awareness, understanding or
implementation of relevant regulatory requirements.
This risk can also arise from external factors, such as
the current and changing priorities of our regulators’
policy and supervision departments.
Mitigation and controls
¼ Monitor operations to ensure they adhere to regulatory requirements and standards
¼ Continuously review all regulatory incidents and breaches
¼ Define and embed policies and procedures across the Group to ensure regulatory
compliance
Regulatory change
Risk
We operate across highly regulated environments
which are continually evolving, and face the risk of
governments or regulators introducing legislation
ornew regulations and requirements in any of the
jurisdictions in which we operates. This could result
inan adverse effect on our business or operations,
through reduction in revenue, increases in costs
orincreases in capital and liquidity requirements.
Mitigation and controls
¼ Maintain strong relationships with key regulators and actively seek to converse in an effort
to keep abreast of, contribute to and correctly implement regulatory changes
¼ Monitor relevant public statements by regulators that affect our industry
¼ Maintain current and emerging risk reports which timeline incoming changes
Tax
Risk
The risk of significant adverse changes in the manner
in which we are taxed.
Examples of tax risks we face include the risk of
theimposition of a financial transactions tax, which
could severely impact the economics of trading and
developments in international tax law, which in turn
could impact the amount of tax that we pay.
Mitigation and controls
¼ Monitor developments in international tax laws to ensure continued compliance and that
stakeholders are aware of any significant adverse changes that might impact us
¼ Where appropriate and possible, collaborate with tax and regulatory authorities to
provide input on tax policy, or changes in law
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022 49
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
2. Commercial risk
Strategic delivery
Risk
The risk that our competitive position weakens
orprofits are impacted due to the failure to adopt
orimplement an effective business strategy,
includingthe risk of failing to appropriately
integratean acquisition.
Mitigation and controls
¼ The Board receive strategy updates from the Executive Directors throughout the year
detailing the strategic progress of the business
¼ Undertake external consultation and extensive market research in advance of committing
to any strategy in order to test and validate a concept
¼ Manage projects via a phased investment process, with regular review periods, in order
toassess performance and determine if further investment is justified
Financial market conditions
Risk
The risk that our performance is affected by client
sensitivity to adverse market conditions, making it
harder to recruit new clients and reducing the
willingness of existing clients to trade.
Mitigation and controls
¼ Review daily revenue, monthly financial information, KPIs and regular reforecasts
ofexpected financial performance
¼ Use forecasts to determine actions necessary to manage performance and
productsindifferent geographical locations, with consideration given to changes
inmarket conditions
¼ Regularly update investors and market analysts on revenue performance, and engage
with them to manage the impact of market conditions on performance expectations
Competitor risk
Risk
We operate in a highly competitive environment and
seek to mitigate competitor risk by maintaining a clear
distinction in the market. This is achieved through
compelling and innovative product development and
quality of service, all while closely monitoring the
activity and performance of our competitors.
Mitigation and controls
¼ Monitor conduct to ensure we do not engage in questionable practices, regardless
ofwhether they would prove to be commercially attractive to clients
¼ Ensure that our product offering remains attractive, taking into account the other
benefits that we offer our clients, including brand, strength of technology and
servicequality
IG GROUP HOLDINGS PLC ANNUAL REPORT 202250
STRATEGIC REPORT
3. Business model risk
Market risk
Risk
The risk of loss due to movements in market prices
arising from our net position in financial instruments.
We seek to manage our market risk so our trading
revenue predominantly reflects client transaction fees
net of hedging costs and is not driven by market risk
gains or losses.
We are also exposed to interest rate risk through our
debt and holdings of cash and investments.
Mitigation and controls
¼ Use a real-time market position monitoring system
¼ Monitor market risk exposures with hourly scenario-based stress tests which analyse the
impact of potential stress and market gap events
¼ Take appropriate action to reduce risk exposures as required. If exposures exceed
pre-determined limits, hedging is undertaken to bring the exposure back within the limits
¼ Our framework consists of dynamic limits which can be fully utilised during market
opening hours and contract in less liquid periods. Market risk limits have been increased
over the year in line with the growth of the Group, bringing greater efficiency of
internalisation of client flow. All increases are reviewed and approved by the Board
Credit risk – Client
Risk
The risk that a client fails to meet their obligations
tous, resulting in a financial loss. Client credit risk
principally arises when a client’s total funds deposited
are insufficient to cover any trading losses incurred.
Mitigation and controls
¼ Set client margin requirements considering the market for each instrument, requiring
clients to deposit additional collateral or reduce positions where necessary
¼ Manage client credit risk in real time via our ‘Close-out monitor’ system. Monitor
andmanage client margin calls via automatic liquidation of account positions once
pre-determined account close-out levels are breached
¼ Offer risk management training to clients which encourages them to collateralise their
accounts at an appropriate level and set a level at which an individual deal will be closed
Credit risk – Financial institution
Risk
We have financial exposure to a number of financial
institutions, owing to the placement of financial
assetsat banks and the hedging of market risk in the
wholesale markets, which requires us to place margin
with our hedging brokers.
Mitigation and controls
¼ Perform credit reviews on financial institutional counterparties when a new relationship
isentered into; this is updated semi-annually (or ad hoc upon an event)
¼ Actively manage 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
¼ Ensure the majority of deposits are demand or overnight deposits, enabling us to react
immediately to any deterioration in credit quality
Liquidity
Risk
This is the risk that the we are unable to meet our
financial obligations as they fall due.
Mitigation and controls
¼ Manage liquidity within the UK Defined Liquidity Group (UK DLG) comprising of IG Markets
(IGM), IG Index (IGI) and IG Trading and Investments (IGT&I)
¼ The UK DLG carries out a liquidity assessment each year to ascertain if it has sufficient
liquidity to continue in operation under liquidity stress and provides mitigating actions to
improve the liquidity position in these stress scenarios
¼ Mitigate liquidity risk through access to committed unsecured bank facilities and debt
Capital adequacy
Risk
The risk that the we hold insufficient capital to
cover our risk exposures and have to curtail or
cease operations.
We are supervised on a consolidated basis by the UK’s
FCA and our global entities’ operations are directly
authorised by the respective local regulators.
Mitigation and controls
¼ Manage capital resources with the objectives of facilitating business growth, maintaining
our dividend policy and complying with the regulatory capital resource requirements
¼ Undertake an annual capital assessment and apply a series of stress-testing scenarios to
our base financial projections, approved by the Board
¼ Operate a monitoring framework over our capital resources and minimum capital
requirements daily
Principal Risks continued
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022 51
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
4. Conduct and operational risk
Platform outage
Risk
The risk that clients are unable to trade on the
platform due to an operational outage and the risk
that our operations are affected due to inadequate
disaster recovery capabilities and delays in our ability
to recover within appetite.
Mitigation and controls
¼ Maintain a 24/7 Incident Management function to manage the resolution of incidents.
¼ Perform regular disaster recovery capability testing to ensure that standby services are
effective and minimise the impact to operations
¼ Apply denial-of-service (DOS) protection against cyber-attacks that would impact
platform availability
¼ Maintain a Change Management function which undertakes risk assessments and utilises
defined maintenance windows to protect core trading periods and client impact
System performance and capacity issues
Risk
The risk that system capability limitations or
unexpected client activity results in degradation of
client platforms or internal business service to clients.
We need to ensure we have sufficient capacity to flex
with client demand.
Mitigation and controls
¼ Undertake regular performance and capacity stress testing to ensure our platforms have
sufficient headroom and resilience to perform in times of heightened volatility and
increased demand
¼ Maintain an Enterprise Change function to manage business change and the
development of new products and services
¼ Maintain a Quality Assurance function to test and identify system defects through the
development lifecycle and resolve these before they impact applications
Information security
Risk
This is the risk of data loss that results in a regulatory
breach or fine. This can be due to employee or vendor
activity, non-compliance with data regulations,
cyber-attack or data integrity issues.
Mitigation and controls
¼ Maintain a 24/7 Security Operations Centre for the review and triage of information
security incidents, and employ mitigation services for threats such as hacking, malware,
data loss and data gathering
¼ Host a dedicated Information Security Forum, through which senior management are
updated on the strategy and progress of the Information Security Programme and the
status of threats and risks
Employee working conditions issues
Risk
The risk that we have inadequate employment
practices which are detrimental to staff or can create
conflict with the business. Employees should be
confident that they work in a safe environment.
Mitigation and controls
¼ Continuously refresh our employment policies and processes to ensure they match
thelatest industry standards and best practices
¼ Obtain regular feedback from staff members on employment practices and
working conditions in order to assess and improve our practices and continue
to be a top employer
¼ Undertake annual engagement surveys to identify any employee dissatisfaction which
can then be investigated and improved upon
¼ Purchase suitable insurance programmes which cover employee requirements globally
IG GROUP HOLDINGS PLC ANNUAL REPORT 202252
STRATEGIC REPORT
4. Conduct and operational risk continued
Trading issues
Risk
The risk related to any issues with the processes
around our internal hedging and client trading. This
also considers how we process clients’ corporate
action events, dividends and stock transfers.
Mitigation and controls
¼ Internalise client flow and hedge efficiently with return to volume of client income being
akey monitoring metric
¼ Put in place market risk limits and have very low tolerance for operational issues that
result in a market risk loss
¼ Strictly adhere to best execution rules which are monitored through the Best Execution
Committee, applying the highest standards to all jurisdictions in which we operate
¼ Take a ‘follow the sun’ approach with trading desks located in Australia and London with
shift patterns
Client management issues
Risk
This is the risk related to the operational and
conductissues in the client lifecycle spanning from
the customer agreement, account set-up, interaction
with us, and appropriateness of account types and
product offerings.
Mitigation and controls
¼ Regular assessments of services which have been identified as being critical to clients
and are required to be operationally resilient, with single points of failure identified
and back-ups set in place
¼ Cross-team training to ensure resources are adequate to flex with demand
¼ Establish KPIs to monitor levels of service provided, and invite clients to provide feedback,
with any issues identified being investigated
Financial crime
Risk
The failure to identify and report financial crime, and
inadequate client due diligence and oversight, can
result in a breach of regulatory requirements. Clients
may attempt to use us to commit fraud or launder
money, third parties may try to extract client or
corporate funds, and employees could misappropriate
funds if an opportunity arose.
Mitigation and controls
¼ Have a mature control framework for identifying suspicious transactions related
to market abuse which must then be reported on
¼ Establish appropriate onboarding processes for different clients and vendors with
anenhanced due diligence process
¼ Ensure Group policies and processes have segregated duties to ensure adequate
oversight and control over internal fraud
Principal Risks continued
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022 53
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
Business support process issues
Risk
The risk that inadequate business processes and
oversight can lead to internal issues within the
business. These can relate to inaccurate or late client
money or asset management, mismanaged corporate
cash, unintentional breach of market risk limits,
incorrect revenue calculation or allocation, or
incorrect or late payroll processing.
Mitigation and controls
¼ Our operational risk framework ensures the control environment is monitored
and aim toreduce the operational events which occur
¼ Escalation procedures efficiently manage the occurrence of these risks
¼ Specific committees and audits monitor topics such as client money and
asset management
¼ Ensure correct resourcing to flex with client volumes and monitor attrition rates
at a functional level
Financial integrity and statutory reporting issues
Risk
The risk of production issues which could lead
tountimely, incomplete or inaccurate Financial
Statements, transaction reporting, tax filing,
regulatory capital, financial crime reporting
and forecasting. Any issues or errors can
have a detrimental impact on clients, markets
and shareholders.
Mitigation and controls
¼ Monitor and enhance our control environment, which aims to reduce the number,
size of and impact of these events which occur
¼ Implement escalation procedures to efficiently manage the occurrence of these risks
¼ Specific steering committees help manage areas such as transaction reporting, financial
crime reporting, financial reporting and forecasting, Internal Capital Adequacy and Risk
Assessment (ICARA) production and annual report production
Threats to employees and assets
Risk
The risk related to dangers to employees and damage
to physical and non-physical property or assets from
natural or non-natural external causes. We recognise
the growing risks associated with climate change and
a warming planet. These include the physical risks
from changing weather patterns, and the transition
risks arising from movement towards a less polluting,
greener economy.
Mitigation and controls
¼ Secure data centres and offices and with state-of-the-art cyber security and fire safety
protocols in place
¼ Purchase suitable commercial insurance globally for assets and each of our premises
¼ Engage with an external environmental consultant to help conduct climate-related risk
assessments bi-annually
IG GROUP HOLDINGS PLC ANNUAL REPORT 202254
STRATEGIC REPORT
Going Concern and Viability Statement
Going Concern
The Group meets its day-to-day working
capital requirements through its
available liquid assets and committed
banking facilities. The Group’s liquid
assets exclude all monies held in
segregated client money accounts.
In assessing whether it is appropriate
to adopt the going concern basis in
preparing the Financial Statements,
the Directors have considered the
resilience of the Group, taking account
of its liquidity position and cash
generation, the adequacy of capital
resources, the availability of external
credit facilities and the associated
financial covenants, stress-testing of
liquidity and capital adequacy that
takes into account the principal risks
faced by the business, in addition to the
impact of the tastytrade acquisition.
Further details of these principal
risks and how they are mitigated and
managed is documented in the Risk
Management section on page 46.
The Directors’ assessment has
considered future performance,
solvency and liquidity over a period of
at least twelve months from the date
ofapproval of the Financial Statements.
The Board, following the review by the
Audit Committee, has a reasonable
expectation that the Group has
adequate resources for that period, and
confirm that they consider it appropriate
to adopt the going concern basis in
preparing the Financial Statements.
Viability Statement
The UK Corporate Governance Code
(the Code) requires the Directors
to make a statement regarding the
viability of the Group, including
explaining how they have assessed the
prospects of the Group, the period of
time over which they have made the
assessment and why they consider
that period to be appropriate.
The Group has a forecasting and
planning cycle consisting of a strategic
plan, an annual budget for the current
year and financial projections for a
further three years. The output from this
business planning process is used in the
Group’s capital and liquidity planning,
and the most recent forecasts are for
the four-year period ending May 2026.
The Group’s revenue, which is driven by
client transaction fees, has continued to
benefit from financial market volatility
over the course FY22, along with the
revenue generated following the
acquisition of tastytrade. Projections of
the Group’s revenue have conservatively
considered financial market volatility
returning to normal levels throughout
the four-year period. Projections also
include assumptions on interest rates
that will result in increased interest on
client funds in the tastytrade business.
The Group has conservatively excluded
the impact of potential interest rate rises
on its business outside of the US.
The four-year forecasting period is the
length of time over which the Board
strategically assesses the business and
the period of time over which the Board
would typically look for investments to
pay back.
No significant changes to regulatory
capital and liquidity requirements have
been assumed over the forecasting
period. The Group is subject to the
new IFPR which has not resulted in
a significant change in the Group’s
capital and liquidity requirements and
resources since its introduction on
1 January 2022. As the risk profile of
tastytrade is similar to the Group, it
has not contributed to a significant
increase in capital requirements since
acquisition, although the payment to
acquire tastytrade did result in a one-
off reduction in capital resources.
The first year of the planning period
has a greater degree of certainty. It is
therefore used to set detailed financial
targets across the Group. It is also used
by the Remuneration Committee to set
targets for the annual incentive scheme.
Caution about the degree of certainty
needs to be exercised – in the short
term, the performance of the Group’s
business is impacted by influences such
as market conditions and regulatory
changes that it cannot control.
The further three-year period provides
less certainty of outcome, but provides
a robust planning tool against which
strategic decisions can be made. These
forecasts are also considered when
setting targets for the executive and
senior management share plans.
The Group undertakes stress testing on
these forecasts through the Individual
Liquidity Adequacy Assessment
(ILAA), Internal Capital Adequacy
Assessment Process (ICAAP) and
Recovery Plan, providing the Board with
a robust assessment of the possible
consequences of principal risks facing
the Group, including those that would
threaten its business model, future
performance, solvency and liquidity.
The introduction of the IFPR for FCA-
regulated investment firms from 1st
January 2022 means that in future
periods, the Group will perform an
ICARA that will combine the ICAAP,
ILAA and Recovery Plan processes.
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022 55
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
The types of scenarios used include the
collapse of a major financial services
firm, an unexpected global economic
event followed by a market dislocation
and operational IT failures. The stress
tests evaluate the impact of the
scenarios on the relevant principal risks
captured by the Group’s Risk
Management Framework.
Additionally, the Group has undertaken
reverse stress testing to understand
the circumstances under which the
Group’s business model is no longer
viable. This information is used to ensure
the relevant risks are sufficiently well-
understood and appropriately managed.
Scenarios are reviewed at least annually
to ensure they remain relevant, with
any updates being incorporated
into the ICARA accordingly.
The Group has undertaken extensive
modelling and analysis for potential
changes in the regulatory landscape, in
order to prepare the financial forecasts,
and there is a range of potential
outcomes. The Group is planning
investments in new countries and in new
products, that may be less successful
than assumed by the financial forecasts
and that are dependant on regulatory
applications being successful.
The Directors are satisfied that these
and other uncertainties have been
assessed, and that the financial
forecasts reflect an appropriate balance
of the potential outcomes.
The Group continues to actively
monitor and refine its comprehensive
business continuity plan which was
successfully implemented at the onset
of the Covid-19 pandemic during
FY20. The Group’s significant long-
term investment in communications
and technology infrastructure has
enabled the Group to transition to
a hybrid-working environment, with
all employees given the opportunity
to work safely from home, and IG
continues to provide the best possible
service for its clients when they choose
to trade the financial markets.
The conflict in Ukraine has had minimal
impact on the commercial operations
of the Group and steps were taken
in the early stages to minimise any
prospective future exposure to
sanctions on clients and suppliers.
Additional employee support has
been provided to employees based
in Poland, many of whom have been
assisting refugees arriving from
neighbouring Ukraine, to ensure their
continued health and wellbeing.
Overall the Directors consider the
Group well-placed to manage its
business risks successfully, having taken
into account the current economic
outlook, the possible consequences
of principal risks facing the business in
severe but plausible scenarios, and the
effectiveness of any mitigating actions
on the Group’s profitability and liquidity.
The Group’s business model provides
the Directors with comfort that the
business is being run in a sustainable
way, acting in the interests of its clients
and acting responsibly in managing
relationships with other stakeholders.
The Board regularly assesses the
principal risks facing the Group. These
risks include regulatory, legislative, or
tax changes which may detrimentally
impact our business in the jurisdictions
we operate or seek to operate in. In
particular a change that impacts on the
Group’s ability to sell or trade OTC
derivatives may have a fundamental
effect on the viability of the Group and
its businesses. Further details of these
principal risks and how they are
mitigated and managed is documented
in the Risk Management section on
pages 48 to 53. The Board receives
reports on these and new emerging
risks through the Risk Management
Framework. On the basis of these and
other matters considered and reviewed
by the Board during the year, the
Directors have reasonable expectations
that the Group will be able to continue in
operation and meet its liabilities as they
fall due over the four-year period ending
31 May 2026.
The Strategic Report up to and including
page 55 was approved for issue by the
Board on 20 July 2022 and signed on its
behalf by:
Charles A Rozes
Chief Financial Officer
56
GOVERNANCE REPORT
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Governance at a Glance
A strong core is
the key to success
Statement of compliance
During FY22, we have applied the principles and complied
with all the provisions of the Code. The Governance Report,
which includes the principal Committee Reports listed
onpage 64, outlines the key features of the Corporate
Governance Framework and sets out how the Group has
applied the principles of the Code.
A copy of the Code is available on the Financial Reporting
Council’s (FRC’s) website at www.frc.org.uk.
Annual General Meeting
The Board is looking forward to meeting shareholders,
hearing their views and answering their questions at this
year’s Annual General Meeting (AGM), which will be held
on21 September 2022.
Further information about our AGM arrangements will
be set out in the Notice of AGM.
Key decisions
¼ Approved a £1 billion EMTN Programme
(pages 24 to 25)
¼ Approved the sale of Nadex and Small Exchange
(page 25)
¼ Pledged 1% of post-tax profits to charitable
causes from 2022 to 2025 (page 25)
¼ Appointed Susan Skerritt as a Non-Executive
Director (pages 76 and 77)
¼ Established a North American Board,
IGNA (pages 58 and 59)
¼ Approved the Group’s Equality, Diversity and
Inclusion strategy
¼ Approved the Group’s Financial Education
strategy (page 110)
Independent Chair 1
Executive Directors 3
Independent Non-Executive Directors 8
0–3 years 7
3–6 years 3
Over 6 years 2
Female 4
Male 8
Ethnically diverse 3
White 9
57
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
The Board
Composition of the Board
Length of tenure
Gender
Ethnicity
GOVERNANCE REPORT
58
Chair’s
Introduction
to Corporate
Governance
Mike McTighe, Chair of the
Board, gives his introduction
tocorporate governance in
respect of the financial year.
During the year, the Board has been
ableto come together again in person,
whichhas enabled us to consolidate the
building blocks put in place last year as
we become an ever-more cohesive and
effective Board.
In support of the acquisition of
tastytrade, the Board took the
opportunity to review the governance
arrangements in the US to optimise
oversight and support of the US
companies by the wider IG Group. The
Board decided that a North American
Board should focus on governance,
regulation and compliance in particular.
The IGNA Board is chaired by IGGH
Non-Executive Director Malcolm Le May
and comprises IGGH Non-Executive
Director Susan Skerritt, IGGH Executive
Director Charlie Rozes and Joe (JJ)
Kinahan, the regional CEO for North
America. In the year ahead, governance
arrangements for IGNA will remain
under review as the business develops,
to ensure that optimal governance is in
place to support the region’s success.
During the financial year, a new UK
regulated entity, IGT&I received FCA
authorisation. In the early part of FY23,
IG’s UK non-leveraged business,
currently within IGM will be transferred
to this entity, allowing IGM to focus on
the CFD business, including external-
hedging arrangements. As with our
other UK-regulated entities, IGM and IGI,
the Board of IGT&I will mirror that of
IGGH, with Non-Executive Directors
providing enhanced oversight, and
support and meetings for all four boards
being held concurrently.
We have made significant progress during the
year to implement governance best practice,
but there is still more work to be done as we
strive to become ‘best in class’.”
Mike McTighe
Chair
59
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Governance structure
To ensure Board discussions are of
appropriate length and with the right
balance of time spent on historical,
current and forward-looking agenda
items, we have reviewed the Terms of
Reference of each of our Committees
and ensured that as much delegation
asappropriate has been made. We also
delegated some of IGGH’s authority to
the IGNA Board. All of this is to ensure
we are making the most effective use of
our time, moving governance oversight
closer to our individual businesses
where it is proportionate to do so and
generally instilling good governance
atthe heart of our businesses
andprocesses.
The Board remains committed to
ensuring the highest standards of
governance throughout the organisation
and continuously strengthening our
governance arrangements, as you will
see reflected in the following pages of
this report. As a key part of this, our
ESG Committee goes from strength
to strength as we embed ESG values
into the heart of everything we do and
deliver on our commitment to donate
the equivalent of 1% of prior-year post-
tax profits to the Brighter Future Fund.
Board and Committee changes
During the year, we have welcomed
Susan Skerritt (appointed to the Board
in July 2021) as a Non-Executive Director
of the Company. Susan is an established
Non-Executive Director and a US
resident. She brings significant financial
markets experience working with
US-based companies and regulators.
That experience and local knowledge
is already proving invaluable to us as
we increase our focus on the US. Susan
is a member of both the IGNA Board
and the IGGH Board Risk Committee.
A particular focus for the Board has
been developing strong working
relationships and getting to know
each other in order to work together
effectively. While the Board has
continued to work together effectively
remotely throughout the restrictions
imposed by the Covid-19 pandemic,
we have been particularly pleased
to be able to come back together in
person, which has helped to deepen
these relationships. Newer Directors
to the Board have benefited from
in-depth ‘deep-dive’ sessions to help
them understand our operations
and culture, and build stronger
relationships withmanagement.
A review of the effectiveness of the
Board, its Committees and individual
Directors was undertaken by the
Company, with facilitation from
Lintstock, an independent consultancy.
The evaluation showed that the Board
has performed well as a collaborative
team and continues to build good-
quality relationships between ourselves
and with management.
During the year we progressed the
actions from the 2021 evaluation,
including consideration of the structure
and frequency of Board and Committee
meetings and holding additional
workshops in between formal meetings
to provide the Non-Executive Directors
with more in-depth and focused
sessions into key areas of the Group’s
activities. Further details can be found
on page 70.
Outside of Board meetings, we held a
number of additional in-depth strategy
sessions on a range of topics to support
the Board in their knowledge and
understanding of our operations,
particularly from an international
perspective, focusing in on each
ofthegeographic regions.
Diversity, inclusion and equality
The Board is committed to having
adiverse and inclusive membership,
which helps us to make good
decisions by having a broad range
of perspectives. I’m pleased that
we continue to meet the Hampton-
Alexander target of at least one-third
female representation on the Board
and exceed the Parker Review target
of one ethnic minority Director on the
Board well ahead of the 2024 deadline.
The Board currently consists of nine
Non-Executive Directors and three
Executive Directors. While the Executive
Directors run the operational aspects
ofthe business on a day-to-day basis,
theNon-Executive Directors provide
appropriate guidance, challenge
andsupport.
Priorities for the year ahead
Following the establishment of the IGNA
Board, as anticipated, a project has
begun to review the Board structures
for our other Regulated Entities across
the globe through the creation of a new
Subsidiary Governance Framework
that also supports our business
model. Regional CEOs and leadership
teams will be attending IGGH Board
meetings and every financial year
the Board will visit one of the regions,
starting with North America in FY23.
As a purpose-led global fintech,
we continue to power the pursuit
of financial freedom for the
ambitious, growing and becoming
an ever more global, diversified
and sustainable business.
Following strong performance in
FY22, we continue to stand out from
other companies, as we strive to
make a difference for our clients and
for the wider societies in which we
operate. Wehave made significant
process during the year to implement
governance best practice, but there
is still more work to be done as we
strive to become ‘best in class’.
Mike McTighe
Chair
20 July 2022
60
GOVERNANCE REPORT
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
The Board
as at the date of this Report
The Board is responsible for
determining the Group’s
strategy and for promoting our
long-term success, through
creating and delivering long-
term value for shareholders.
Mike McTighe
Chair
June Felix
Chief Executive Officer
Charlie Rozes
Chief Financial Officer
Jon Noble
Chief Operating Officer
Jonathan Moulds
Senior Independent
Non-Executive Director
Rakesh Bhasin
Non-Executive Director
Nationality: British
Ethnicity: White
Time on Board: Two years
(Appointed 3 February 2020)
Nationality: American
Ethnicity: Chinese
Time on Board: Six years
(Appointed Non-Executive Director
on4 September 2015; and CEO on
30 October 2018)
Nationality: British/American
Ethnicity: White
Time on Board: Two years
(Appointed 1 June 2020)
Nationality: British
Ethnicity: White
Time on Board: Four years
(Appointed 1 June 2018)
Nationality: British
Ethnicity: White
Time on Board: Three years
(Appointed 20 September 2018)
Nationality: American/British
Ethnicity: Indian
Time on Board: Two years
(Appointed 6 July 2020)
Committee membership:
C
Committee membership:
C
Committee membership:
Committee membership:
None
Committee membership:
C
Committee membership:
Mike has a wealth of leadership,
board and regulatory experience
from both public and private
companies. Mike is the Chair of
Openreach Limited and Together
Financial Services Limited. For
over 20 years he has held various
non-executive director roles in a
range of regulated and unregulated
industries while also spending eight
years on the board of Ofcom and one
year on the board of Postcomm.
Mike has held many chairships over
the years, including chairing several
UK and US public company boards.
Mike spent most of his executive
career at Cable and Wireless,
Philips, Motorola and GE.
Mike holds a BSc(Eng) honours
degree in Electrical Engineering.
June was appointed as CEO on
30 October 2018, having previously
served as a Non-Executive Director
of the Company since 4 September
2015. June has had a successful
career, growing and leading
global financial services and tech
companies, and living and working
inHong Kong, London and New York.
June brings to the role over 25 years’
experience in both the finance
and digital technology sectors.
June is a Non-Executive Director
of RELX PLC and also sits on the
Board of Advisors of the London
Technology Club. June has no other
current external appointments.
Until the sale of Verifone Inc., June
was President of Verifone Europe
and Russia with responsibility for
over 2,000 employees with the
operation of the business throughout
those territories. Prior to her role
at Verifone, June held various
executive management positions
at a number of large multi-national
businesses. These included Citibank
where she was Managing Director
of Global Healthcare, Citi Enterprise
Payments, IBM Corporation where
she was Global General Manager
for the Global Banking and Financial
Markets industry sector, and Chase
Manhattan Bank where she was APAC
Region Head of GPTS. June has also
worked as a strategy consultant at
Booz, Allen & Hamilton, in strategy
roles at Chase Manhattan Bank, and
as Chief Executive Officer of Certco,
a risk management technology
firm for global broker dealers.
June graduated from the University
of Pittsburgh with a summa cum
laude (first class honours) degree in
Chemical Engineering and Pre-Med.
Charlie was appointed as
CFO on 1 June 2020.
Charlie has a proven track record
of, and accountability for, financial
control and reporting, accounting,
tax, M&A, investor relations, risk
and compliance, and audit. He
is a highly experienced finance
leader having held other executive
director roles in the financial
services sector prior to joining
IG, and having driven a number of
substantial change programmes
both in the UK and internationally.
Charlie began his professional career
with PricewaterhouseCoopers LLP,
and became a Partner in 2001 in
the US management consulting
practice. Following that he held
senior executive roles at IBM and
Bank of America. In 2007, he joined
Barclays plc where he was the Chief
Financial Officer of Barclays UK Retail
and Business Bank, and became the
Global Head of Investor Relations in
September 2011 until August 2015.
He was the Group Finance Director
at Jardine Lloyd Thompson plc from
September 2015 until April 2019
when it was acquired by Marsh
& McLennan Companies Inc.
Charlie has no current
external appointments.
Charlie has an undergraduate
degree from Tufts University
and an MBA from the Southern
Methodist University.
Jon was appointed COO on 14 June
2019 with responsibility for Trading
and Operations, and is a member of
the Executive Committee. Jon also
leads the business change office and
chairs a number of the Company’s
management committees. Jon
is also a standing attendee of
the Board ESG Committee,
providing Executive guidance.
Jon first joined IG in 2000 as a trainee
dealer, rising to Dealing Director in
2007. In 2010, Jon became Dealing
& Operations Director and in 2012
was appointed Chief Information
Officer. In 2015, Jon was appointed
as Head of IG’s Delivery pillar. He
was appointed to the Board as Chief
Information Officer on 1 June 2018.
As Chief Information Officer,
Jon had responsibility for setting
and delivering our IT strategy,
delivery of all programmes of work
and for keeping the production
environment stable and secure. He
was responsible for IG’s IT systems,
including its client interface systems.
Jon has no current external
appointments.
Jon graduated from Durham
University with a degree in Economics
and obtained an Executive MBA from
London Business School in 2007.
Jonathan is the Chair of Citi Group’s
largest global subsidiary CGML and
is also the Chair of Litigation Capital
Management Limited, an AIM-listed
litigation finance company. He has
extensive experience in financial
markets and has worked in the US,
Asia and the UK during his career. He
served as the Group Chief Operating
Officer of Barclays plc until 2016.
Prior to Barclays, Jonathan had a
20-year career with Bank of America
and was Chief Executive Officer of
Merrill Lynch International following
the merger of the two institutions in
2008, with responsibility for Bank of
America’s European businesses. He
was a member of Bank of America’s
Global Operating Committee.
Jonathan has served widely on key
industry associations including as
Chair of the International Swaps
and Derivatives Association (ISDA)
from 2004 until 2008, and as a
Director of the Association for
Financial Markets in Europe (AFME).
He remains a member of AFME’s
Advisory Board. Jonathan was a
member of the Capital Markets
Senior Practitioners of the UK
Financial Services Authority and the
Global Financial Markets Association.
Jonathan has a first-class honours
in Mathematics from the University
of Cambridge. He was also awarded
a CBE in the 2014 Honours List
for services to philanthropy.
Rakesh brings extensive technology
and global markets experience,
specifically in Asia-Pacific. He is a
Non-Executive Director for a portfolio
of companies in multiple sectors
and is also Chair of CMC Networks,
aCarlyle Group investment company
based in Africa, focused on providing
telecommunications services
across Africa and the Middle East.
In his executive career, Rakesh
was the Chief Executive Officer
and a member of the Board of Colt
Technology Services, a Fidelity-
owned company providing network,
voice and data centre services
globally. Rakesh was appointed
into the role of Chief Executive
Officer in December 2006 and
completed his tenure at the end of
2015, concluding his secondment
from Fidelity. Concurrently, he was
Non-Executive Chair of KVH, an
Asian-based technology company
with headquarters in Tokyo and
operations in Hong Kong, Seoul and
Singapore, and Non-Executive Chair
of Market Prizm, a financial services-
focused technology company.
Rakesh has also previously held
senior positions within AT&T,
including Head of AT&T Asia-
Pacific’s managed network services
business and President, AT&T
Japan Limited. He was also formerly
Senior Managing Director of Japan
Telecom Company Limited.
Rakesh has a BSc in Electrical
Engineering from George
Washington University.
Committee membership
Audit Committee
Board Risk Committee
Disclosure Committee
ESG Committee
Nomination Committee
Remuneration Committee
C
Chair of the Committee
(in the colour of the relevant Committee)
Former Directors who served during the year
Bridget Messer
Bridget stepped down from the Board on 22 September 2021.
Lisa Pollina
Lisa stepped down from the Board on 9 July 2021.
FIND OUT MORE AT
IGGROUP.COM/ABOUTUS/LEADERSHIP
61
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Mike McTighe
Chair
June Felix
Chief Executive Officer
Charlie Rozes
Chief Financial Officer
Jon Noble
Chief Operating Officer
Jonathan Moulds
Senior Independent
Non-Executive Director
Rakesh Bhasin
Non-Executive Director
Nationality: British
Ethnicity: White
Time on Board: Two years
(Appointed 3 February 2020)
Nationality: American
Ethnicity: Chinese
Time on Board: Six years
(Appointed Non-Executive Director
on4 September 2015; and CEO on
30 October 2018)
Nationality: British/American
Ethnicity: White
Time on Board: Two years
(Appointed 1 June 2020)
Nationality: British
Ethnicity: White
Time on Board: Four years
(Appointed 1 June 2018)
Nationality: British
Ethnicity: White
Time on Board: Three years
(Appointed 20 September 2018)
Nationality: American/British
Ethnicity: Indian
Time on Board: Two years
(Appointed 6 July 2020)
Committee membership:
C
Committee membership:
C
Committee membership:
Committee membership:
None
Committee membership:
C
Committee membership:
Mike has a wealth of leadership,
board and regulatory experience
from both public and private
companies. Mike is the Chair of
Openreach Limited and Together
Financial Services Limited. For
over 20 years he has held various
non-executive director roles in a
range of regulated and unregulated
industries while also spending eight
years on the board of Ofcom and one
year on the board of Postcomm.
Mike has held many chairships over
the years, including chairing several
UK and US public company boards.
Mike spent most of his executive
career at Cable and Wireless,
Philips, Motorola and GE.
Mike holds a BSc(Eng) honours
degree in Electrical Engineering.
June was appointed as CEO on
30 October 2018, having previously
served as a Non-Executive Director
of the Company since 4 September
2015. June has had a successful
career, growing and leading
global financial services and tech
companies, and living and working
inHong Kong, London and New York.
June brings to the role over 25 years’
experience in both the finance
and digital technology sectors.
June is a Non-Executive Director
of RELX PLC and also sits on the
Board of Advisors of the London
Technology Club. June has no other
current external appointments.
Until the sale of Verifone Inc., June
was President of Verifone Europe
and Russia with responsibility for
over 2,000 employees with the
operation of the business throughout
those territories. Prior to her role
at Verifone, June held various
executive management positions
at a number of large multi-national
businesses. These included Citibank
where she was Managing Director
of Global Healthcare, Citi Enterprise
Payments, IBM Corporation where
she was Global General Manager
for the Global Banking and Financial
Markets industry sector, and Chase
Manhattan Bank where she was APAC
Region Head of GPTS. June has also
worked as a strategy consultant at
Booz, Allen & Hamilton, in strategy
roles at Chase Manhattan Bank, and
as Chief Executive Officer of Certco,
a risk management technology
firm for global broker dealers.
June graduated from the University
of Pittsburgh with a summa cum
laude (first class honours) degree in
Chemical Engineering and Pre-Med.
Charlie was appointed as
CFO on 1 June 2020.
Charlie has a proven track record
of, and accountability for, financial
control and reporting, accounting,
tax, M&A, investor relations, risk
and compliance, and audit. He
is a highly experienced finance
leader having held other executive
director roles in the financial
services sector prior to joining
IG, and having driven a number of
substantial change programmes
both in the UK and internationally.
Charlie began his professional career
with PricewaterhouseCoopers LLP,
and became a Partner in 2001 in
the US management consulting
practice. Following that he held
senior executive roles at IBM and
Bank of America. In 2007, he joined
Barclays plc where he was the Chief
Financial Officer of Barclays UK Retail
and Business Bank, and became the
Global Head of Investor Relations in
September 2011 until August 2015.
He was the Group Finance Director
at Jardine Lloyd Thompson plc from
September 2015 until April 2019
when it was acquired by Marsh
& McLennan Companies Inc.
Charlie has no current
external appointments.
Charlie has an undergraduate
degree from Tufts University
and an MBA from the Southern
Methodist University.
Jon was appointed COO on 14 June
2019 with responsibility for Trading
and Operations, and is a member of
the Executive Committee. Jon also
leads the business change office and
chairs a number of the Company’s
management committees. Jon
is also a standing attendee of
the Board ESG Committee,
providing Executive guidance.
Jon first joined IG in 2000 as a trainee
dealer, rising to Dealing Director in
2007. In 2010, Jon became Dealing
& Operations Director and in 2012
was appointed Chief Information
Officer. In 2015, Jon was appointed
as Head of IG’s Delivery pillar. He
was appointed to the Board as Chief
Information Officer on 1 June 2018.
As Chief Information Officer,
Jon had responsibility for setting
and delivering our IT strategy,
delivery of all programmes of work
and for keeping the production
environment stable and secure. He
was responsible for IG’s IT systems,
including its client interface systems.
Jon has no current external
appointments.
Jon graduated from Durham
University with a degree in Economics
and obtained an Executive MBA from
London Business School in 2007.
Jonathan is the Chair of Citi Group’s
largest global subsidiary CGML and
is also the Chair of Litigation Capital
Management Limited, an AIM-listed
litigation finance company. He has
extensive experience in financial
markets and has worked in the US,
Asia and the UK during his career. He
served as the Group Chief Operating
Officer of Barclays plc until 2016.
Prior to Barclays, Jonathan had a
20-year career with Bank of America
and was Chief Executive Officer of
Merrill Lynch International following
the merger of the two institutions in
2008, with responsibility for Bank of
America’s European businesses. He
was a member of Bank of America’s
Global Operating Committee.
Jonathan has served widely on key
industry associations including as
Chair of the International Swaps
and Derivatives Association (ISDA)
from 2004 until 2008, and as a
Director of the Association for
Financial Markets in Europe (AFME).
He remains a member of AFME’s
Advisory Board. Jonathan was a
member of the Capital Markets
Senior Practitioners of the UK
Financial Services Authority and the
Global Financial Markets Association.
Jonathan has a first-class honours
in Mathematics from the University
of Cambridge. He was also awarded
a CBE in the 2014 Honours List
for services to philanthropy.
Rakesh brings extensive technology
and global markets experience,
specifically in Asia-Pacific. He is a
Non-Executive Director for a portfolio
of companies in multiple sectors
and is also Chair of CMC Networks,
aCarlyle Group investment company
based in Africa, focused on providing
telecommunications services
across Africa and the Middle East.
In his executive career, Rakesh
was the Chief Executive Officer
and a member of the Board of Colt
Technology Services, a Fidelity-
owned company providing network,
voice and data centre services
globally. Rakesh was appointed
into the role of Chief Executive
Officer in December 2006 and
completed his tenure at the end of
2015, concluding his secondment
from Fidelity. Concurrently, he was
Non-Executive Chair of KVH, an
Asian-based technology company
with headquarters in Tokyo and
operations in Hong Kong, Seoul and
Singapore, and Non-Executive Chair
of Market Prizm, a financial services-
focused technology company.
Rakesh has also previously held
senior positions within AT&T,
including Head of AT&T Asia-
Pacific’s managed network services
business and President, AT&T
Japan Limited. He was also formerly
Senior Managing Director of Japan
Telecom Company Limited.
Rakesh has a BSc in Electrical
Engineering from George
Washington University.
62
GOVERNANCE REPORT
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
The Board continued
Andrew Didham
Non-Executive Director
Wu Gang
Non-Executive Director
Sally-Ann Hibberd
Non-Executive Director
Malcolm Le May
Non-Executive Director
Susan Skerritt
Non-Executive Director
Helen Stevenson
Non-Executive Director
Nationality: British
Ethnicity: White
Time on Board: Two years
(Appointed 19 September 2019)
Nationality: British
Ethnicity: Chinese
Time on Board: One year
(Appointed 30 September 2020)
Nationality: British
Ethnicity: White
Time on Board: Three years
(Appointed 20 September 2018)
Nationality: British
Ethnicity: White
Time on Board: Six years
(Appointed 10 September 2015)
Nationality: American
Ethnicity: White
Time on Board: One year
(Appointed 9 July 2021)
Nationality: British
Ethnicity: White
Time on Board: Two years
(Appointed 18 March 2020)
Committee membership:
C
Committee membership:
Committee membership:
C
Committee membership:
Committee membership: Committee membership:
C
Andrew is currently Non-Executive
Director and Chair of GCP
Infrastructure Investments Limited,
a Director of N.M. Rothschild &
Sons Limited and is also Chair of
the N.M. Rothschild Pension Trust.
In 2017 Andrew was appointed to
the Board of Shawbrook Group plc
where he is a Non-Executive Director
and Chair of its Audit Committee.
From 2017 to 2021 Andrew was a
Non-Executive Director and, from
2017, Senior Independent Director of
Charles Stanley Group plc, where he
also served as Non-Executive Chair
of its principal operating company
Charles Stanley & Co. Limited. From
2017 to 2019 Andrew served as
Non-Executive Director and Chair
of the Audit and Risk Committees of
Jardine Lloyd Thompson Group plc.
Andrew was a Partner at KPMG from
1990 to 1997 and is a Fellow of the
Institute of Chartered Accountants
in England and Wales. Upon leaving
KPMG, Andrew served as Group
Finance Director of the worldwide
Rothschild group for 16 years
from 1997 to 2012. From 2012 he
has served as an Executive Vice
Chair in the Rothschild group.
Andrew has a BA(Hons) in
Business Studies (Finance).
Wu Gang has a strong strategic and
financial advisory background and
a wealth of international experience
gained from a career of over 25
years in investment banking in Asia
and Europe. He set up and led the
European investment banking team
at CLSA Securities, the international
investment banking platform of CITIC
Securities, from 2015 to January
2019. Prior to CLSA Securities,
he was head of M&A and General
Industrials at ICBC International. Wu
Gang also held senior level positions
at Royal Bank of Scotland, HSBC
and Merrill Lynch in Hong Kong and
London. He started his investment
banking career at Goldman Sachs.
Wu Gang is currently a Non-Executive
Director of Tritax Big Box REIT plc
and Ashurst LLP, where he is also
Chair of the Risk Committee, and
a senior adviser at Rothschild &
Co Hong Kong Limited. He served
as a Non-Executive Director and
member of the Remuneration
Committee of Laird plc from
January 2017 to June 2018.
Wu Gang has an MBA from INSEAD,
Fontainebleau, an MA in Asia Area
Studies from SOAS, University
of London, and a BA in English
and American Literature from
Fudan University in Shanghai.
Sally-Ann has a broad background
in financial services and technology.
She previously served as Chief
Operating Officer of the International
Division, and latterly as Group
Operations and Technology
Director, of Willis Group, held a
number of senior executive roles
at Lloyds TSB and was a Non-
Executive Director of Shawbrook
Group plc until January 2019.
Sally-Ann serves as a Non-Executive
Director of Simon Midco Limited
and the Co-operative Bank plc
where she is a member of its Audit,
Remuneration and Risk Committees.
In addition, Sally-Ann is a non-
executive member of the governing
body of Loughborough University.
Sally-Ann holds a BSc in Civil
Engineering from Loughborough
University and an MBA from
CASS Business School.
Malcolm has broad experience and
knowledge of the financial services
and investment sectors, along with
extensive experience on the boards
of publicly listed companies.
Malcolm was Remuneration
Committee Chair and Senior
Independent Director of IGGH from
September 2015 to September 2020.
Malcolm was appointed as Chief
Executive Officer of Provident
Financial plc in February 2018,
having previously been its Senior
Independent Director until November
2017 and, following the death of
its Chair, Interim Executive Chair.
Malcolm served as a Non-
Executive Director and Chair of
the Remuneration Committee of
Hastings Group Holdings plc prior
to his resignation in April 2018. He
also served as Senior Independent
Director of Pendragon plc, and
was a Non-Executive Director and
Chair of the Investment Committee
at RSA Insurance Group plc. Prior
to this, he held various executive
roles at Morgan Grenfell plc, Drexel
Burnham Lambert, Barclays de
Zoete Wedd Holdings, UBS AG,
ING Barings Limited, Morley Fund
Managers (now Aviva Investors)
and JER Partners Limited, where
he was European President and
Matrix Securities Limited.
Susan is an Independent Director
of Community Bank System, a
commercial bank providing services
across the north-eastern US, Tanger
Factory Outlet Centers, an owner and
operator of North American outlet
centres, and Falcon Group, a leading
worldwide inventory management
solutions business. Susan previously
served as Chair, CEO and President
at Deutsche Bank Trust Company
Americas, Non-Executive Director
to Royal Bank of Canada US Group
and Executive Board Member at
Deutsche Bank USA and Bank of
New York Mellon Trust Company.
Susan is a commercial banker,
industry consultant and corporate
treasury professional with expertise
in global financial markets, regulatory
matters and strategic project
management. Susan has chaired
and been a member of a number
of board committees during her
career, including Chair of the
Human Resources and Corporate
Governance Committee at Royal
Bank of Canada US Group. She is
currently Chair of the Audit and
Risk Committee at Falcon Group,
Chair of the Audit Committee of
Tanger Factory Outlet Centers and
a member of the Audit Committee
of the Community Bank System.
Susan is a Trustee of the
Village of Saltaire.
Susan has an MBA in Finance and
International Business from New
York University Stern School of
Business and a BA in Economics
from Hamilton College.
Helen brings extensive marketing
and digital experience from a
range of industries, together with
strong customer focus. Helen is
an experienced Non-Executive
Director with particular experience
regarding remuneration matters.
Helen is currently the Senior
Independent Director of Reach plc,
a Non-Executive Director of Skipton
Building Society, and Non-Executive
Director and Chair of RM plc.
Helen served on the board of Kin and
Carta from May 2012 to December
2021, where she was Remuneration
Committee Chair and Senior
Independent Director, and as Chief
Marketing Officer UK at Yell Group
plc from 2006 to 2012 and, prior
to this, served as Lloyds TSB Group
Marketing Director. Helen started
her career with Mars Inc., where
she spent 19 years, culminating
in her role as European Marketing
Director, leading category strategy
development across Europe.
Helen is a member of the Henley
Business School Strategy
Board, and serves as a Governor
of Wellington College.
Helen has a BA (Hons) Degree
in Chemical Engineering from
Cambridge University.
63
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Andrew Didham
Non-Executive Director
Wu Gang
Non-Executive Director
Sally-Ann Hibberd
Non-Executive Director
Malcolm Le May
Non-Executive Director
Susan Skerritt
Non-Executive Director
Helen Stevenson
Non-Executive Director
Nationality: British
Ethnicity: White
Time on Board: Two years
(Appointed 19 September 2019)
Nationality: British
Ethnicity: Chinese
Time on Board: One year
(Appointed 30 September 2020)
Nationality: British
Ethnicity: White
Time on Board: Three years
(Appointed 20 September 2018)
Nationality: British
Ethnicity: White
Time on Board: Six years
(Appointed 10 September 2015)
Nationality: American
Ethnicity: White
Time on Board: One year
(Appointed 9 July 2021)
Nationality: British
Ethnicity: White
Time on Board: Two years
(Appointed 18 March 2020)
Committee membership:
C
Committee membership:
Committee membership:
C
Committee membership:
Committee membership: Committee membership:
C
Andrew is currently Non-Executive
Director and Chair of GCP
Infrastructure Investments Limited,
a Director of N.M. Rothschild &
Sons Limited and is also Chair of
the N.M. Rothschild Pension Trust.
In 2017 Andrew was appointed to
the Board of Shawbrook Group plc
where he is a Non-Executive Director
and Chair of its Audit Committee.
From 2017 to 2021 Andrew was a
Non-Executive Director and, from
2017, Senior Independent Director of
Charles Stanley Group plc, where he
also served as Non-Executive Chair
of its principal operating company
Charles Stanley & Co. Limited. From
2017 to 2019 Andrew served as
Non-Executive Director and Chair
of the Audit and Risk Committees of
Jardine Lloyd Thompson Group plc.
Andrew was a Partner at KPMG from
1990 to 1997 and is a Fellow of the
Institute of Chartered Accountants
in England and Wales. Upon leaving
KPMG, Andrew served as Group
Finance Director of the worldwide
Rothschild group for 16 years
from 1997 to 2012. From 2012 he
has served as an Executive Vice
Chair in the Rothschild group.
Andrew has a BA(Hons) in
Business Studies (Finance).
Wu Gang has a strong strategic and
financial advisory background and
a wealth of international experience
gained from a career of over 25
years in investment banking in Asia
and Europe. He set up and led the
European investment banking team
at CLSA Securities, the international
investment banking platform of CITIC
Securities, from 2015 to January
2019. Prior to CLSA Securities,
he was head of M&A and General
Industrials at ICBC International. Wu
Gang also held senior level positions
at Royal Bank of Scotland, HSBC
and Merrill Lynch in Hong Kong and
London. He started his investment
banking career at Goldman Sachs.
Wu Gang is currently a Non-Executive
Director of Tritax Big Box REIT plc
and Ashurst LLP, where he is also
Chair of the Risk Committee, and
a senior adviser at Rothschild &
Co Hong Kong Limited. He served
as a Non-Executive Director and
member of the Remuneration
Committee of Laird plc from
January 2017 to June 2018.
Wu Gang has an MBA from INSEAD,
Fontainebleau, an MA in Asia Area
Studies from SOAS, University
of London, and a BA in English
and American Literature from
Fudan University in Shanghai.
Sally-Ann has a broad background
in financial services and technology.
She previously served as Chief
Operating Officer of the International
Division, and latterly as Group
Operations and Technology
Director, of Willis Group, held a
number of senior executive roles
at Lloyds TSB and was a Non-
Executive Director of Shawbrook
Group plc until January 2019.
Sally-Ann serves as a Non-Executive
Director of Simon Midco Limited
and the Co-operative Bank plc
where she is a member of its Audit,
Remuneration and Risk Committees.
In addition, Sally-Ann is a non-
executive member of the governing
body of Loughborough University.
Sally-Ann holds a BSc in Civil
Engineering from Loughborough
University and an MBA from
CASS Business School.
Malcolm has broad experience and
knowledge of the financial services
and investment sectors, along with
extensive experience on the boards
of publicly listed companies.
Malcolm was Remuneration
Committee Chair and Senior
Independent Director of IGGH from
September 2015 to September 2020.
Malcolm was appointed as Chief
Executive Officer of Provident
Financial plc in February 2018,
having previously been its Senior
Independent Director until November
2017 and, following the death of
its Chair, Interim Executive Chair.
Malcolm served as a Non-
Executive Director and Chair of
the Remuneration Committee of
Hastings Group Holdings plc prior
to his resignation in April 2018. He
also served as Senior Independent
Director of Pendragon plc, and
was a Non-Executive Director and
Chair of the Investment Committee
at RSA Insurance Group plc. Prior
to this, he held various executive
roles at Morgan Grenfell plc, Drexel
Burnham Lambert, Barclays de
Zoete Wedd Holdings, UBS AG,
ING Barings Limited, Morley Fund
Managers (now Aviva Investors)
and JER Partners Limited, where
he was European President and
Matrix Securities Limited.
Susan is an Independent Director
of Community Bank System, a
commercial bank providing services
across the north-eastern US, Tanger
Factory Outlet Centers, an owner and
operator of North American outlet
centres, and Falcon Group, a leading
worldwide inventory management
solutions business. Susan previously
served as Chair, CEO and President
at Deutsche Bank Trust Company
Americas, Non-Executive Director
to Royal Bank of Canada US Group
and Executive Board Member at
Deutsche Bank USA and Bank of
New York Mellon Trust Company.
Susan is a commercial banker,
industry consultant and corporate
treasury professional with expertise
in global financial markets, regulatory
matters and strategic project
management. Susan has chaired
and been a member of a number
of board committees during her
career, including Chair of the
Human Resources and Corporate
Governance Committee at Royal
Bank of Canada US Group. She is
currently Chair of the Audit and
Risk Committee at Falcon Group,
Chair of the Audit Committee of
Tanger Factory Outlet Centers and
a member of the Audit Committee
of the Community Bank System.
Susan is a Trustee of the
Village of Saltaire.
Susan has an MBA in Finance and
International Business from New
York University Stern School of
Business and a BA in Economics
from Hamilton College.
Helen brings extensive marketing
and digital experience from a
range of industries, together with
strong customer focus. Helen is
an experienced Non-Executive
Director with particular experience
regarding remuneration matters.
Helen is currently the Senior
Independent Director of Reach plc,
a Non-Executive Director of Skipton
Building Society, and Non-Executive
Director and Chair of RM plc.
Helen served on the board of Kin and
Carta from May 2012 to December
2021, where she was Remuneration
Committee Chair and Senior
Independent Director, and as Chief
Marketing Officer UK at Yell Group
plc from 2006 to 2012 and, prior
to this, served as Lloyds TSB Group
Marketing Director. Helen started
her career with Mars Inc., where
she spent 19 years, culminating
in her role as European Marketing
Director, leading category strategy
development across Europe.
Helen is a member of the Henley
Business School Strategy
Board, and serves as a Governor
of Wellington College.
Helen has a BA (Hons) Degree
in Chemical Engineering from
Cambridge University.
64
GOVERNANCE REPORT
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Governance Framework
THE BOARD
The Board delegates certain matters
to its five principal Committees
Shareholders and stakeholders
OUR STRATEGY
PAG E 11
OUR PRINCIPAL RISKS
PAGE 48
SECTION 172
STATEMENT
PAGE 24
KEY ACTIVITIES OF
THE BOARD
PAGE 74
The Board provides leadership by setting our strategic
direction, overseeing and supporting management in
execution of our strategy. It is responsible for establishing
our purpose and values, and for ensuring that our culture
and behaviours are both appropriate and consistent. It
provides robust challenge, within a framework of prudent
and effective risk management and internal controls.
Nomination Committee
Ensures the Board and its Committees have the
appropriate balance of skills, knowledge, diversity,
experience and independence.
SEE REPORT ON
PAGE 76
Remuneration Committee
Establishes our Remuneration Policy and ensures there
is a clear link between performance and remuneration.
SEE REPORT ON
PAGE 79
Audit Committee
Oversees our financial reporting, maintains an
appropriate relationship with the internal and
externalauditors and monitors our internal controls.
SEE REPORT ON
PAGE 102
ESG Committee
Provides oversight and advice to the Board in relation
to our ESG strategy.
SEE REPORT ON
PAG E 110
Board Risk Committee
Reviews and monitors our principal and emerging risks
and the effectiveness of our risk management systems.
SEE REPORT ON
PAG E 112
65
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
EXECUTIVE COMMITTEE SUPPORTING COMMITTEES
Shareholders and stakeholders
Our shareholders and other key stakeholders play
animportant role in monitoring and safeguarding
ourgovernance. Further information on how
weengage with our shareholders is on page 72,
employees on pages 22 and 30-31, and other key
stakeholders on page 73.
The Executive Committee operates a number of
supporting committees that provide oversight
on key business activities and risks.
The Board delegates the execution of the Company’s
strategy and the day-to-day management of the business
to the Executive Committee.
CEO STATEMENT
PAGE 6
OUR BUSINESS MODEL
PAGE 14
OUR PURPOSE AND
VALUES
PAGE 10
EXECUTIVE RISK
COMMITTEE
TECHNOLOGY
COMMITTEE
CLIENT MONEY &
ASSETS COMMITTEE
INVESTMENT
COMMITTEE
IG PEOPLE
FORUM
BUSINESS
PERFORMANCE REVIEW
PAGE 38
66
GOVERNANCE REPORT
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Board Governance
Chair
¼ Leadership of the Board and promoting the highest
standards of corporate governance
¼ Setting the tone and culture for an effective Board,
facilitating productive meetings
¼ Supporting and challenging management
in the development of our strategy and
commercial objectives
¼ Setting the Board agenda, allowing appropriate time
for open and constructive discussion and challenge
¼ Engaging with major shareholders to understand
their views on governance and strategy
Chief Operating Officer (COO)
¼ Delegated authority in respect of trading,
operations, business change and ESG
¼ Developing and maintaining our processes
andensuring effective management for
internal operations
¼ Responsibility for our Global Service Centres
¼ Chairing a number of the management committees
Company Secretary, Chief Legal and
Governance Officer
¼ Works closely with the Chair, the CEO the CFO and
the Board Committee Chairs in setting agendas for
Board and Committee meetings
¼ Facilitates the accurate, timely and clear information
flow to and from the Board, its Committees, and
between Directors and senior management
¼ Supports the Chair in designing and delivering
Directors’ induction programmes, and the Board and
Committee performance evaluations
¼ Advises the Board on corporate governance matters
and Board procedures
¼ Responsible for administering IG’s Share Dealing
Code of Conduct and the AGM
Leadership and responsibilities
The role of the Board
The Board provides leadership by setting our strategic
direction and overseeing management’s execution of the
strategy. It is responsible for establishing our purpose and
values, and for ensuring that our culture and behaviours are
both appropriate and consistent. It provides robust challenge
within a framework of prudent and effective risk management
and internal controls. The Board is provided with timely and
comprehensive information to enable it to discharge its
responsibilities, to encourage strategic debate and to facilitate
robust, informed and timely decision making. In addition,
Directors receive briefings from the CEO, CFO and other
members of the Executive Committee in between meetings.
The Board is collectively responsible for promoting our
long-term sustainable success for the benefit of the
Company’s shareholders, through the creation of long-term
value and contribution to wider society. In exercising this
responsibility, the Board takes into account the needs of, and
ensures effective engagement with, all relevant stakeholders
– including clients, regulators, the workforce, suppliers and
the wider community in which we operate – and the effect of
our activities on the environment.
The Stakeholder Engagement section of the Strategic Report
on pages 22 to 23 sets out the stakeholder engagement
mechanisms that are currently in place, and identifies our key
stakeholders and engagement undertaken with them during
the year. It also highlights the principal issues that matter to
each stakeholder group, our governance activities, and the
actions and outcomes from these engagements that the
Board takes into consideration when making decisions.
The Board considers Section 172 stakeholder interests in all
ofits discussions to which they are relevant. This requirement
is integral to the procedure for preparing Board agendas,
andthere is a template identifying the relevant stakeholder
considerations for inclusion in the Board papers that
accompany such discussions.
As a collective body and as individual Directors, the Board
isresponsible for ensuring that it has the appropriate skills,
knowledge, diversity and experience to perform its role
effectively and independently.
There is a comprehensive schedule of matters reserved for
thedecision making of the Board. These include agreeing the
strategy, approving major transactions, annual budgets and
changes to our capital and governance structure. The matters
reserved to the Board are supplemented by an annual Board
calendar that provides for, among other things, regular reviews
of operational and financial performance; reviews of succession
planning for the Board and senior management; setting our risk
appetite; and approving any changes to our Risk Management
and Internal Control Framework.
Specific matters for approval and recommendation to the
Board have been formally delegated to certain Committees.
The matters reserved to the Board and Committee Terms of
Reference are available on the Group website.
Division of Responsibilities
67
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Chief Financial Officer (CFO)Chief Executive Officer (CEO)
Non-Executive DirectorsSenior Independent Director
¼ Supporting the CEO in implementing our strategy and
financial and risk management
¼ Recommending the annual budget and four-year
financial plan
¼ Management of our internal financial control systems,
including those relating to safeguarding of client
money and assets
¼ Oversight of liquidity
¼ Maintaining relationships with key stakeholders
¼ Developing and executing our strategy
¼ Specific authority for day-to-day decision making
relating to the management of our affairs, including:
– Delivering financial performance in line with the
agreed budget
– Organisational design of our operations
– Recruitment, leadership and development of our
Executive team
– Proposing to the Board our approach to vision,
values, culture, diversity and inclusion
– Maintaining relationships with key internal and
external stakeholders
¼ Independent of management
¼ Advising and constructively challenging management
¼ Monitoring management’s success in delivering
the agreed strategy within the Risk Appetite and
Control Framework
¼ Determining appropriate levels of remuneration and
reward for the Executive Directors
¼ The Chair of the Audit Committee has responsibility
for Internal Audit, including ensuring the
independence of the function
¼ Acting as a sounding board for the Chair
¼ Serving as an intermediary for the other Directors
when necessary
¼ Available to shareholders if they have concerns when
communication via the normal channels is
inappropriate or has already been exhausted
¼ Evaluating the performance of the Chair on behalf of
the other Directors
Division of Responsibilities
68
GOVERNANCE REPORT
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Board Governance continued
The Board meets regularly, at least six
times a year, and during the year held
six scheduled meetings. In addition,
the Board has a Standing Committee
whose responsibility is to consider
Board-reserved matters at short notice,
where full attendance is not possible
or where there are administrative
matters requiring evidencing that do
not warrant a full Board meeting.
Senior executives below Board level are
invited to attend meetings as required
to present and discuss matters relating
to their business areas and functions.
The full Board also meets when
necessary to discuss important
ad hoc emerging issues that require
consideration between scheduled Board
meetings. The Chair and the Executive
Directors meet once a year, as the
Board, to consider Non-Executive
Directors’ fees.
Each Director commits an appropriate
amount of time to their duties during
thefinancial year. The Non-Executive
Directors met the time commitment
reasonably expected of them pursuant
to their letters of appointment.
The Chair and Non-Executive Directors
regularly meet in the absence of the
Executive Directors, and also separately
with just the CEO present.
During the year, the Non-Executive
Directors, led by the Senior Independent
Director, met without the Chair, to
evaluate the Chair’s performance.
The Senior Independent Director also
met with the Executive Directors,
without the Chair, for this purpose.
Attendance at Board meetings
The number of scheduled Board meetings attended by each Director during the
year is set out below. Where Directors are unable to attend meetings, they are
encouraged to give the Chair their views in advance on the matters to be discussed.
How the Board operates
Chair
Mike McTighe
Independent Non-Executive Directors
Jonathan Moulds
Rakesh Bhasin
Andrew Didham
Wu Gang
1
Sally-Ann Hibberd
Malcolm Le May
Susan Skerritt
Helen Stevenson
Executive Directors
June Felix
Charlie Rozes
Jon Noble
Past Directors
Bridget Messer
2
Lisa Pollina
3
N/A
1 Wu Gang was unable to attend one Board meeting due to illness.
2 Bridget Messer stepped down from the Board on 22 September 2021.
3 Lisa Pollina stepped down from the Board on 9 July 2021.
Meeting attendedBoard member Did not attend
69
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Director independence
The Company is fully compliant with the
Code, which requires that at least half of
the Board, excluding the Chair, should
comprise Non-Executive Directors
whoare determined by the Board
tobeindependent.
Executive Directors 3
Independent
Non-Executive Directors
(excluding the Chair) 8
The independence of the Non-Executive
Directors is considered by the
Nomination Committee on behalf
of the Board and reviewed annually.
The Directors consider factors such as
length of tenure and relationships or
circumstances that are likely to affect,
or may appear to affect, the Directors’
judgement in determining whether they
remain independent.
Following this year’s review, the Board
concluded that all the Non-Executive
Directors continue to be independent in
character and judgement and are free
from any business or other relationships
that could materially affect the exercise
of their judgement.
Conflicts of interest
Directors have a statutory duty to avoid
situations in which they may have
interests that conflict with those of
theGroup. Directors are required to
disclose both the nature and extent of
any potential or actual conflicts at the
beginning of every Board and
Committee meeting.
In accordance with the CA2006, the
Company’s Articles of Association allow
the Board to authorise potential
conflicts that may arise, and to impose
such conditions or limitations as it sees
fit. During the year, potential conflicts
were considered and assessed by the
Board and approved where appropriate.
The Board has access to independent
professional advice, at IG’s expense,
ifrequired.
Succession planning and
appointments to the Board
The Nomination Committee has specific
responsibility for considering the
appointment of Non-Executive and
Executive Directors and recommending
new appointments to the Board and
takes a proactive approach to
succession planning.
More information on the work of the
Nomination Committee can be found in
the Nomination Committee Report on
pages 76 to 78. The whole Board is also
involved in overseeing the development
of management resources across
theGroup.
Board composition, balance
anddiversity
The Board’s size – and the skills and
experience of its members – have a
significant impact on its effectiveness. It
aims to maintain a balance of experience
and skills of individual Board members.
The breadth of skills and experience
currently on the Board includes
experience in key areas such as listed
environments, international financial
services, finance and accountancy,
strategy, information technology,
financial services regulation, marketing,
risk management, investor relations,
technology and digital. One Non-
Executive Director currently undertakes
an external executive role and one
Executive Director currently undertakes
an external non-executive role.
There is an appropriate combination of
Executive Directors and Non-Executive
Directors, such that no individual or
small group of individuals can dominate
the Board’s decision making.
We continue to meet the Hampton-
Alexander target of at least one-third
female representation on the Board and
exceed the Parker Review target of one
ethnic minority Director on the Board
by2024.
Female 4
Male 8
Board effectiveness
70
GOVERNANCE REPORT
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Board Governance continued
Board tenure
0-3 years 1
Executive Directors
3-6 years 1
6+ years 1
Non-Executive Directors
(including the Chair)
0-3 years 6
3-6 years 2
6+ years 1
Induction
Following appointment, each Director
receives a comprehensive and formal
induction, linked to their individual
experience, to familiarise them with
their duties and our business operations,
risk and governance arrangements.
The induction programme, which
is coordinated with the help of the
Company Secretary, may include
briefings on industry and regulatory
matters relating to us, our strategy
and business model, our history, risk
management and risk appetite, as well
as meetings with senior management
in key areas of the business. These
are supplemented by induction
materials such as recent Board papers
and minutes, organisation structure
charts, governance matters and
relevant policies. Newly appointed
Directors may also meet the Company’s
external auditor, brokers and advisers,
and attend a presentation from the
Company Secretary (who is also the
Chief Legal and Governance Officer)
and the Company’s corporate counsel
on the roles and responsibilities of
a UK-listed company director.
Ongoing professional development
To facilitate greater awareness and
understanding of our business and
operating environment, all Directors are
given regular updates on changes and
developments in the business.
Training opportunities are provided
through internal meetings, workshops,
presentations and briefings by internal
advisers and management, as well as
external advisers. The Company
Secretary regularly updates the Board
on any relevant legislative and regulatory
corporate governance-related changes.
The Directors meet with executives
toreceive further insights into the
operations of the business in the
jurisdictions where we operate.
The Chair ensures that the Directors
continually update and refresh their
skills and knowledge.
Board evaluation
Each year, an evaluation of the
effectiveness of the Board, its
Committees and individual Directors
isundertaken.
The evaluation last year was facilitated
internally by the Company Secretary.
The Board agreed the following areas of
development, in respect of which there
has been significant progress:
¼ The structure and frequency of
Boardand Committee meetings
wasreviewed to ensure sufficient
time for key discussions to take
placeby the Committees and
timelyescalation to the Board,
as well as ensuring the Board
agenda contained the appropriate
balance of historical, current and
forward-looking agenda items
¼ Additional workshops were held
in-between formal meetings to
provide the Non-Executive Directors
with more in-depth and focused
overviews on key areas of our
activities. This was also designed to
support the newer Non-Executive
Directors with their learning and
understanding of our activities
In 2022, an internal evaluation was
carried out, facilitated by Lintstock.
Thereview consisted of the completion
of performance evaluation surveys.
The responses were collated and shared
with the Board, together with a report
summarising the output of the
evaluation and suggested areas for
focus and discussion. A final report
wascirculated to the Board and its
Committees and improvement actions
agreed for FY23.
We will report on the action plan,
actions taken and progress made in next
year’s Annual Report.
Board effectiveness continued
71
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Financial and business reporting
The Strategic Report on pages 10 to 55
describes our purpose, strategy and
business model, whereby we generate
and preserve value over the long term
and deliver our objectives.
A Statement of the Directors’
Responsibilities in respect of the
Financial Statements is set out on page
118, and a statement regarding the use
of the going-concern basis in preparing
these Financial Statements is provided
in the Going Concern and Viability
Statement on pages 54 and 55.
Risk management and
internalcontrol
We are exposed to a number of business
risks in providing products and services
to our clients. The Board is responsible
for establishing the overall appetite
forthese risks, which is detailed and
approved in the Risk Appetite Statement
set out on page 47. The Board
hasresponsibility for ensuring the
maintenance of our risk management
and internal-control systems, and for
annually reviewing them.
The framework under which risk is
managed in the business is supported
by a system of internal controls,
designed to embed within the business
the effective management of our key
business risks. The risk management
and internal control systems are
designed to manage, rather than
eliminate, the risk of failure to achieve
business objectives and can only provide
reasonable assurance against material
misstatement or loss.
Through reports from the Board Risk
Committee and the Audit Committee,
and consideration of the ICAAP,
ILAAand Recovery Plans, the Board
regularly reviews and monitors our
riskmanagement and internal control
systems and the effectiveness with
which we manage the emerging and
principal risks we face.
The Directors confirm that the Board has
carried out a robust assessment of the
principal and emerging risks we face,
including those that would threaten our
business model, future performance,
solvency and liquidity. We outline the
risks to which we’re exposed and the
framework under which these risks are
managed, including a description of
the system of internal controls, in the
Risk Management section on pages 46
to 53, and in the Going Concern and
Viability Statement on pages 54 and 55.
An annual formal review of the
effectiveness of our system of risk
management and internal controls has
been carried out which supports the
statements included in the Annual
Report and Financial Statements.
Thereview focused on the overall Risk
Governance Framework and the setting
of our risk appetite. It considered the
key risk assessment and monitoring
activities, as well as the processes
andcontrols in place to manage our
principal and emerging risks and for
escalating exceptions highlighted
bytherisk-management processes.
Nosignificant failings or weaknesses
were identified during the year.
There are risk management and internal
control systems in place for identifying,
evaluating and managing the principal
and emerging risks facing us in
accordance with the Guidance on Risk
Management, Internal Control and
Related Financial and Business
Reporting published by the FRC.
Throughout the year and up to the date
of this report, we have operated a
system of internal controls that provides
reasonable assurance of effective
operations covering all controls,
including financial and operational
controls and compliance with laws
andregulations.
Internal controls over financial
reporting
Our financial reporting process has
been designed to provide reasonable
assurance regarding the reliability of
the financial reporting and preparation
of Financial Statements, including
consolidated Financial Statements, for
external purposes in accordance with
UK-adopted international accounting
standards. The assessment of the overall
effectiveness of the governance, and
risk and control framework included
reviews of systems and controls relating
to the financial reporting process.
Internal controls over financial reporting
include procedures and policies that:
¼ Relate to the maintenance of records
that, in reasonable detail, accurately
and fairly reflect the transactions and
disposals of our assets and liabilities
¼ Provide reasonable assurance that
transactions are recorded as
necessary to permit the preparation
of Financial Statements, and that
receipts and expenditures are being
made only in accordance with
authorisations of management and
respective Directors
¼ Provide reasonable assurance
regarding prevention or timely
detection of unauthorised
acquisition, use or disposal of assets
that could have a material effect on
our Financial Statements
Board accountability
72
GOVERNANCE REPORT
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Board Governance continued
Engagement with shareholders
The Board recognises the importance
ofmaintaining good and constructive
communication with our stakeholders –
including shareholders – and has in
place a comprehensive programme to
facilitate this each year.
Our Annual Report is an important way
of communicating with shareholders,
setting out detailed reviews of the
business and its future developments
inthe Chair’s Statement, the CEO’s
Statement, the CFO’s Statement and the
Strategic Report.
As part of the ongoing investor
relations programme, the Executive
team regularly meet with investors
and market analysts to discuss market
developments, business strategy and
financial performance. This programme
includes presentations by management,
investor roadshows, attendance at
investor conferences and other events.
Following the debt issuance during
the year, this programme has been
extended to include debt investors
and rating agencies as appropriate.
Materials and presentations used
during these events are made available
on the Group website, which also
provides a wide range of other useful
information for both existing and
prospective shareholders. We also
respond to ad hoc requests from
shareholders on a regular basis.
To ensure that members of the
Board understand the views of major
shareholders, feedback is provided
to the Board on any opinions or
concerns expressed by shareholders
identified through the investor
relations activity. The Directors also
receive from the Executive team, as
well as external sources, including
brokers and financial advisers, regular
updates on the market and share
price performance, shareholder
activity, and significant equity analysts’
research, and are made aware of the
consensus financial expectations of
the Group from the outside market.
The Chair, the Senior Independent
Director, the Audit Committee Chair,
and the Remuneration Committee Chair
are available to meet shareholders
as part of the AGM and on request to
discuss governance matters, succession
planning, remuneration policy, or
any other matters, and to ensure
the Board is aware of shareholder
concerns not resolved through
other communication mechanisms.
The Directors provide feedback to
the Board on any views or concerns
expressed to them by shareholders.
AGM
The AGM provides the Board with the
opportunity to communicate with
private and institutional investors,
andwe welcome and encourage their
participation at the meeting. The Chair
aims to ensure that all the Directors,
including the Chairs of the Board
Committees, are available at the AGM
toanswer questions.
At the 2021 AGM, all the proposed
resolutions were passed on a poll, with
the percentage of votes in favour of
each resolution ranging from 92.3%
to100.0%.
The 2022 AGM will be held on
21 September 2022. The Notice of
AGMwill set out the resolutions to be
proposed at the meeting. A copy of the
Notice will be available on our website.
We send our Annual Report and Notice
to shareholders, or make them available
on our website, at least 20 working days
before the date of the meeting. The
Notice sets out a clear explanation of
each resolution to be proposed at the
meeting. After the meeting, we will
make available to shareholders full
details of the votes, including proxy
votes, received on each resolution, and
will publish these on our website on the
same day.
Further information about our AGM
arrangements will be set out in the
Notice of AGM.
Board accountability continued
73
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Engagement with stakeholders
In addition to the shareholder
engagement activities discussed in this
section, the Board recognises that the
success of the business depends on its
ability to engage effectively and work
constructively with all key stakeholder
groups, and their views to be taken into
consideration in Board discussions and
decisions. The Board has identified a
number of key stakeholder groups as
follows. Details of the approach of the
business to dealing with these various
groups are discussed throughout the
Annual Report as set out below:
Clients
Communities
People
Regulators
Investors
Suppliers
READ MORE ON
PAGES 1215, 2225, 29
READ MORE ON
PAGES 1415, 2225, 29, 3234
READ MORE ON
PAGES 1415, 2225, 3031
READ MORE ON
PAGES 1213, 2325
READ MORE ON
PAGES 1415, 2225
READ MORE ON
PAGES 2223, 3233
¼ Strategic Report
¼ S172 Statement
¼ Business Model
¼ Key Trends Likely to Affect
OurBusiness
¼ Stakeholder Engagement
¼ ESG Report (Productspillar)
¼ Strategic Report
¼ S172 Statement
¼ Business Model
¼ Stakeholder Engagement
¼ ESG Report (Products and
Partnerships pillar)
¼ TCFD reporting
¼ Strategic Report
¼ S172 Statement
¼ Business Model
¼ Stakeholder Engagement
¼ ESG Report (People pillar)
¼ Strategic Report
¼ S172 Statement
¼ Key Trends Likely to Affect
OurBusiness
¼ Strategic Report
¼ S172 Statement
¼ Business Model
¼ Stakeholder Engagement
¼ Strategic Report
¼ Stakeholder Engagement
¼ ESGReport (Partnerships pillar)
74
GOVERNANCE REPORT
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Board Governance continued
June 2021 July September October November December January 2022 March May
Board and Committee
meetings
¼ Nomination Committee
¼ Remuneration
Committee
¼ Board
¼ Board Risk Committee
¼ Audit Committee
¼ Remuneration
Committee
¼ ESG Committee
¼ Board
¼ Nomination Committee
¼ Remuneration
Committee
¼ Audit Committee
¼ Board Risk Committee
¼ Joint Audit and Board
Risk Committee
¼ Standing Committee ¼ Board
¼ Board Risk Committee
¼ Remuneration
Committee
¼ Nomination Committee
¼ ESG Committee
¼ Standing Committee ¼ Board
¼ Audit Committee
¼ Remuneration
Committee
¼ Nomination Committee
¼ ESG Committee
¼ Board
¼ Board Risk Committee
¼ Remuneration
Committee
¼ Nomination Committee
¼ Board
¼ Audit Committee
¼ Board Risk Committee
¼ Remuneration
Committee
¼ Nomination Committee
¼ ESG Committee
Key announcements ¼ Board change
(resignation of Lisa
Pollina)
¼ Completion of
tastytrade acquisition
¼ FY21 results
¼ Board change
(appointment of Susan
Skerritt)
¼ Board change
(resignation of Bridget
Messer – took effect on
22 September 2021)
¼ Result of AGM
¼ Q1 revenue update
¼ Publication of
prospectus for EMTN
Programme
¼ Completion of debt
refinancing exercise
¼ Proposed sale of Nadex
and Small Exchange
¼ HY22 results ¼ Q3 revenue update
¼ Completion of sale of
Nadex and Small
Exchange
Board activities during the year
Board meeting agendas during the year
included consideration across the key areas
of strategy, governance, risk and financial
performance, as set out in the schedule of
matters reserved to the Board and the agreed
annual forward calendar.
Strategy
¼ Held four strategy sessions and a
number of other deep-dive sessions,
as well as discussions on strategy
during Board meetings. This focused
on the strategic development of the
business, at which the Board analysed
strategic business initiatives, our
client base and their feedback
¼ Held detailed workshop on the
four-year plan
¼ Received regional updates
¼ Examined sector themes and trends
that could be used to help inform
strategic development. The Board
also reviewed the competitive
environment, identified and
developed strategic options and
opportunities through internal teams,
and agreed strategic development
priorities, including the sale of Nadex
and Small Exchange.
Business, operational highlights
and current trading
¼ Received regular business
performance updates on business
progress and the issues and
challenges faced by management
through the CEO Report, CFO Report
and COO Report and reports from
the Chief Risk Officer on risk and
compliance matters
¼ Reported on matters of interest
suchas the future of work, cyber
security including protection from
ransomware attacks, and IT resilience
Quarterly forecast and budget
¼ Received updates on performance
against budget, prior year, and
market analyst consensus
¼ Discussed risks and opportunities for
the FY22 budget, and approved the
FY23 budget and four-year plan,
including integration of tastytrade
75
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IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
June 2021 July September October November December January 2022 March May
Board and Committee
meetings
¼ Nomination Committee
¼ Remuneration
Committee
¼ Board
¼ Board Risk Committee
¼ Audit Committee
¼ Remuneration
Committee
¼ ESG Committee
¼ Board
¼ Nomination Committee
¼ Remuneration
Committee
¼ Audit Committee
¼ Board Risk Committee
¼ Joint Audit and Board
Risk Committee
¼ Standing Committee ¼ Board
¼ Board Risk Committee
¼ Remuneration
Committee
¼ Nomination Committee
¼ ESG Committee
¼ Standing Committee ¼ Board
¼ Audit Committee
¼ Remuneration
Committee
¼ Nomination Committee
¼ ESG Committee
¼ Board
¼ Board Risk Committee
¼ Remuneration
Committee
¼ Nomination Committee
¼ Board
¼ Audit Committee
¼ Board Risk Committee
¼ Remuneration
Committee
¼ Nomination Committee
¼ ESG Committee
Key announcements ¼ Board change
(resignation of Lisa
Pollina)
¼ Completion of
tastytrade acquisition
¼ FY21 results
¼ Board change
(appointment of Susan
Skerritt)
¼ Board change
(resignation of Bridget
Messer – took effect on
22 September 2021)
¼ Result of AGM
¼ Q1 revenue update
¼ Publication of
prospectus for EMTN
Programme
¼ Completion of debt
refinancing exercise
¼ Proposed sale of Nadex
and Small Exchange
¼ HY22 results ¼ Q3 revenue update
¼ Completion of sale of
Nadex and Small
Exchange
Culture, people, governance, risk
and regulation
¼ Evaluated the effectiveness of
ourrisk management and internal-
control systems, reviewed and
approved our Risk Appetite
Statement and key regulatory
documents, including the ICAAP, the
ILAA documents and Recovery Plans
¼ Discussed the employee engagement
survey results
¼ Analysed the impact of emerging
risks, including those related to tax
¼ Received progress updates for the
IGBrighter Future Strategy
¼ Approved our Financial Education
Strategy
¼ Approved our Equality, Diversity and
Inclusion Strategy and Operation Plan
¼ Approved the Health and Safety Policy
Financial performance
¼ Reviewed our financial performance
and approved all financial
resultsannouncements and
theAnnual Report
¼ Discussed our proposed Capital
Allocation Framework
Dividends
¼ Approved and recommended the
payment of dividends throughout the
year in line with our policy
Other
¼ Considered the shareholder
engagement programme
¼ Received regular reports from
Board Committee Chairs, including
onwhistleblowing
¼ Approved a comprehensive debt
refinancing programme
¼ Reviewed our corporate insurance
programme
¼ Evaluated the effectiveness of the
Board, each Board Committee and
individual Director
¼ Approved the annual review of the
Modern Slavery Statement
¼ Approved the Tax Strategy and the
Tax Risk Management Policy
¼ Attended a TCFD training session
76
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Nomination Committee Report
Mike McTighe
Chair of the
Nomination Committee
Following a period of reconfiguring Board
roles and Executive structures...focushas now
turned to individual and teamdevelopment,
succession plans for theExecutive Committee
and development plans for potential internal
CEO candidates.”
Mike McTighe, Chair of the
Nomination Committee, gives
his review of the Committee’s
activities during the
financialyear.
Chair’s overview
The Nomination Committee reviews
the structure, size, composition and
independence of the Board and leads
the process for Board appointments,
including identifying and recommending
suitable candidates. It ensures that the
Board’s composition meets our needs,
using external search consultancies
to help source candidates based
on objective criteria. The Board and
Committee are committed to ensuring
that we are a truly diverse organisation
in all respects, which includes gender,
social and ethnic backgrounds, cognitive
and personal strengths and experience.
The Committee also ensures
that plans are in place for orderly
succession to the Board and senior
management positions, with a diverse
pipeline identified for succession.
The Committee is responsible for
ensuring that the Board has the
necessary combination of skills,
experience, knowledge, diversity and
independence needed to lead us and to
support the development and delivery
of our strategy.
During the year, the Committee
engaged Audeliss to facilitate
therecruitment of Susan Skerritt,
who,following the Committee’s
recommendation, was appointed
totheBoard on 9 July 2021. Audeliss is
independent of, and has no connection
with, the Company or its individual
Directors, other than in its role as a
professional recruitment consultant
forthe Company. Russell Reynolds
Associates, an independent external
executive search firm, was appointed
tosupport with a comprehensive CEO
succession-planning process allowing
the Committee to identify potential
internal candidates and establish
appropriate development plans.
Members and attendance
FY22 key focus areas
Meeting attended
1 Unable to attend as meetings were held on an ad hoc basis during the year.
Did not attend
¼ Non-Executive Director appointment
¼ CEO succession planning
¼ Appointments to the IGNA and IGT&I Boards
Mike McTighe
Chair of the Committee
Wu Gang
1
Committee Member
Helen Stevenson
1
Committee Member
Jonathan Moulds
Committee Member
Where Directors were unable to attend meetings, they gave the Chair their views
in advance on the matters to be discussed.
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Following a period of reconfiguring
Board roles and Executive structures,
the Committee is confident that the
structure and composition of the Board
of IGGH and the other nested entities
and their sub-committees, as well as
theBoard of IGNA, provides effective
leadership to support our future growth
and strategy. Focus has now turned to
individual and team development,
succession plans for the Executive
Committee and development plans
forpotential internal CEO candidates.
Role of the Nomination Committee
The principal roles and responsibilities of
the Committee include:
¼ Reviewing the structure, size and
composition of the Board and its
Committees to ensure that they
areappropriately balanced in
termsof skills, knowledge, diversity,
experience and independence,
andmaking appropriate
recommendations to the Board
relating to succession planning
atBoard level
¼ Ensuring that there is a formal,
rigorous and transparent procedure
for the appointment of new Directors
to the Board
¼ Identifying, and nominating for Board
approval, suitable candidates to
fillBoard vacancies as and when
theyarise
¼ Reviewing leadership needs,
with a view to ensuring our
continued ability to compete
effectively in our marketplace
anddeliver on our strategy
¼ Keeping apprised of strategic issues
and commercial changes affecting us
and the market in which we operate
¼ Performance evaluation of the Board
The Terms of Reference of the
Committee, which were last reviewed in
May 2022, are available on our website.
Membership and attendance
The Committee currently consists of
four independent Non-Executive
Directors. It met six times during the
year. Going forward, the Committee will
hold four scheduled meetings each year.
The Chair of the Board is also the Chair
of the Committee. The CEO and Chief
People Officer are standing attendees.
How the Committee operates
To ensure the Committee discharges
its responsibilities appropriately, an
annual forward calendar, linked to
the Committee’s Terms of Reference,
is approved by the Committee.
The Company Secretary and Chief
People Officer assist the Chair of the
Committee in drafting the agenda
for each Committee meeting.
Following each Committee meeting,
aformal report is made to the Board
inwhich the Chair of the Committee,
describes the discussions and
challenges from the Committee
meeting, and has the opportunity
toescalate any items and make
recommendations to the Board
asappropriate.
Main activities during the
financialyear
During the year, the Committee met
principally to consider:
¼ The structure and composition of the
Board and its Committees
¼ The appointment of Susan Skerritt as
a Non-Executive Director
¼ The normal process of CEO
succession planning and the
identification and development of
potential internal candidates
¼ Appointments and changes to the
IGNA Board and appointments to the
IGT&I Board (the new UK-regulated
entity) (the latter as part of the nested
board structure)
¼ Considered and, if appropriate,
recommended that the Board
approve the proposed external
appointments of Non-Executive
Directors
Oversight of IGNA Board Directors
included recommending to that Board
the appointment of JJ Kinahan as CEO.
CEO succession plans
The Committee appointed Russell
Reynolds Associates to provide support
with CEO succession planning and the
identification and development of
potential internal candidates and
considered the capabilities, experience
and personal attributes required of
afuture CEO.
Other activities
Membership of the Boards of IGNA and
IGT&I has also been a focus. During the
year all Non-Executive Directors were
appointed as Directors of the IGT&I
Board and two Non-Executive Directors
(Malcolm Le May and Susan Skerritt) and
one Executive Director (the CFO) were
appointed to the Board of IGNA.
Board and Committee evaluation
An internal evaluation of the
performance of the Committee was
undertaken in line with the Committee’s
Terms of Reference. The evaluation
process was facilitated by Lintstock,
anindependent consultancy.
The 2022 Board and Committee review
process consisted of the following
keyelements:
¼ Performance evaluation surveys
prepared and issued
¼ Feedback was analysed and
outcomes presented to the Board
and Committees
¼ The outcomes were discussed at
Board and Committee meetings,
withaction plans and priorities set
for2023
Further information on the outcome of
the evaluation of the Board and its
Committees is given on page 70,
together with a review of the progress
on actions arising from the 2021 review.
78
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IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Nomination Committee Report continued
Diversity statement
As a business, we believe that a diverse
workforce brings creative energy to our
business, powers innovation and sets us
up for continued global success. We’re
committed to developing teams of
individuals with a wide variety of
perspectives, skills and thinking
approaches to help us realise our vision
and strategy. We welcome people of any
age, ethnicity, culture, faith, gender
identity or expression, sexual orientation
or physical capacity who connect with
our values and bring something fresh to
our business. Our Equality, Diversity and
Inclusion Policy is available on request.
At the financial year end, the Board
had 33.3% female representation
(2021: 33.3%,) continuing to meet
the Hampton-Alexander target of at
least one-third female representation
on the Board and exceeding the
Parker Review target of one ethnic
minority Director on the Board ahead
of time (deadline by 2024). We have
three ethnic-minority Directors.
The Committee notes the recent FCA
policy on Diversity and Inclusion issued
in April 2022 and the Board will report
on a comply or explain basis in next
year’s report as to how it has met the
prescribed targets.
The Directors recognise the importance
of diversity, in all of its forms, and
understand the significant benefits that
come with having a truly diverse Board.
The Board continues to appoint
on merit, based on the skills and
experience required for membership,
while giving consideration to all forms
of diversity, aswell as independence.
The Company insists on search
firms presenting adiverse pool
of candidates for consideration
during the search process.
Mike McTighe
Chair of the Nomination Committee
20 July 2022
Senior management gender balance
The table below analyses the gender balance of the Executive Committee and their direct reports as at 31 May 2022.
Wearepleased to see a slight increase to 34% total female representation despite a higher proportion of men in tastytrade.
Wecontinue to aspire to increase diversity across and at every level of our organisation. Our Diversity Commitment
isavailableon our website.
31 May 2022 31 May 2021
Numbers % Numbers % % Change
Board Female 4 33% 5 38% -5%
Male 8 67% 8 62%
Executive Committee Female 5 38% 4 40% -2%
Male 8 62% 6 60%
Senior leadership team
1
Female 8 23% 8 29% -6%
Male 27 77% 20 71%
Total employees Female 811 34% 668 33% 1%
Male 1,608 66% 1,336 67%
1 The gender disclosure shown here relates to the senior leadership team, who are the Executive Committee and the next level of leadership below them, as opposed to including more
junior team members who may also report directly to Executive Committee members.
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IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Directors’ Remuneration Report and Policy
CONTENTS PAGE
Chair’s overview 79
Remuneration at a Glance 82
Summary of 2020 Directors’
Remuneration Policy 83
Annual Report on Remuneration 84
Helen Stevenson, Chair of the
Remuneration Committee,
gives her review of the
Committee’s activities during
the financial year.
Chair’s overview
On behalf of the Board, I am pleased to
present the Directors’ Remuneration
Report for the year to 31 May 2022.
This report includes a summary
of our Directors’ Remuneration
Policy which was approved at the
2020 AGM, details of remuneration
arrangements in respect of the year
to 31 May 2022 and a summary of
how we intend to apply the Policy
during the year to 31 May 2023.
Performance in FY22
We have had one of the busiest years
inour history, and have delivered
recordrevenues, driven by continuing
momentum across our businesses as we
deliver on our strategy to expand and
diversify. Overall performance was
excellent across the majority of regions,
reflecting increased trading by a record
number of clients in a number of key
areas of the business. Throughout the
period we have remained committed to
client quality and we continue to be
defined and differentiated by our good
conduct and client-centric business
model, highlighted by our client loyalty
and successful retention programmes.
Helen Stevenson
Chair of the Remuneration
Committee
2022 has been another strong year for us,
where overall performance exceeded
expectations at the start of the year. In addition,
the Company continues to deliver on its
strategy to expand and diversify the business
and is well positioned for future growth.”
Members and attendance
FY22 key focus areas
Meeting attended Did not attend
¼ IFPR and Investment Firm Directive (IFD) readiness
¼ Continued diversification of theGroup
¼ Preparation for and stakeholder engagement ahead of the FY23Directors
Remuneration Policyreview
Mike McTighe
Committee member
Sally-Ann Hibberd
Committee member
Helen Stevenson
Chair of the Committee
Jonathan Moulds
Committee member
Andrew Didham
Committee member
Where Directors were unable to attend meetings, they gave the Chair their views
in advance on the matters to be discussed.
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We are continuing to deliver on our
strategy, diversifying into new product
lines and into new geographies.
The integration of tastytrade is on
track, with a focus on operations
and marketing, and the business is
confident about theopportunities that
it brings to theCompany given the
large total addressable market in the
US, and also for further international
expansion. In addition, we completed
the sale of Nadex and Small Exchange,
delivering a significant return on
previous investments and allowing
us to further sharpen our focus on
integrating and expanding the US
options and futures business where
we see significant room for growth.
Further details on our strategic progress
can be found on pages 18 to 21.
Incentive outcomes for FY22
The sustained performance plan (SPP)
for the 2022 financial year operated in
line with the Policy. The SPP award for
the 2022 financial year was based on
three metrics: earnings per share
(EPS)(55% weighting), relative Total
Shareholder Return (TSR) (25%
weighting) and non-financial measures
(20% weighting). EPS performance for
FY22 was 96.3 pence, which was
significantly ahead of the maximum
target and our TSR over the period
1 June 2019 to 31 May 2022 was well
above upper quartile compared to the
FTSE 250 (excluding investment trusts).
Non-financial performance during the
year was measured and assessed giving
due consideration to, amongst other
factors, the successful ongoing
integration of tastytrade and
tastytrade’s revenue performance
versus initial expectations for FY22 set
against our confidence in the long-term
opportunities that tastytrade brings to
the wider Group. Consideration was also
given to an improved overall client
experience, increased employee
engagement, and improved societal and
environmental impacts. After careful
assessment, the Committee judged that
non-financial performance was 95% out
of 100%.
Based on the above, while the
outcome of the SPP award for FY22
was calculated at 99% of maximum,
the Committee elected to apply a
discretionary adjustment for the
Executive Directors of -5% to the
outcome reflecting the relative
performance against internal targets
for some individual businesses. This
has resulted in a final vesting outcome
for FY22 of 94% of maximum.
This award will be granted following the
announcement of results for the year
and will be delivered following Policy
requirements in 30% in cash, 20% in
share options released in July 2025, and
50% share options released in July 2026.
COO salary increase to reflect
increase in his responsibilities
During the year, the Committee
reviewed the salary level for Jon Noble,
our COO. Over the previous two years,
the scope and responsibilities of the
COO role have expanded significantly,
including the leadership of the data
science and governance strategy, and
leading our approach on ESG. The
outcome of this review was that the
Committee determined to increase the
COO’s salary to £410k (an increase of
8.2%), effective from 1 October 2021,
in order to reflect the expansion in the
role’s scope and responsibilities – the
Committee is of the view that such an
increase is appropriate in this context.
IFPR/IFD
A large part of our agenda during the
year has been reviewing the new
requirements of the IFPR in the UK and
the IFD in Europe. The Committee
carefully considered and made changes
to our remuneration arrangements,
policies, documentation and processes
to ensure that we comply with these
requirements.
There are no significant changes
totheremuneration arrangements for
Executive Directors, other than for SPP
awards granted in respect of FY23
onwards, Executive Directors will be
required to hold any shares that vest for
a further six months following vesting
tocomply with the IFPR. Malus and
clawback provisions have also
beenexpanded.
Board changes
Executive Directors
As detailed in last year’s report, Bridget
Messer, Chief Commercial Officer,
stepped down from the Board on
22 September 2021, remaining with the
Company until the completion of her
notice period on 21 January 2022.
Bridget will be treated as a good leaver
for the purposes of the SPP. More details
on this can be found on page 96.
Non-Executive Directors and fees
During the year, we welcomed Susan
Skerritt to the Board as a Non-Executive
Director. As disclosed in last year’s
Directors’ Remuneration Report, Lisa
Pollina stepped down from the Board as
a Non-Executive Director on 9 July 2021.
During the year we established a North
American Board and additional fees and
travel expenses have been provided to
the North American Board Chair and
Group non-executive representative
on the Board to reflect the additional
time commitment and responsibilities
in undertaking these roles. More details
on this can be found on page 89.
In light of inflation and the impact on
thecost of living, the Chair and Non-
Executive Directors elected not to
receive an increase in fees for FY23 and
requested that any increase be diverted
to lower paid employees who are feeling
the greatest impact in the rising cost
ofliving.
Looking ahead
Salaries for FY23
Salaries for the Executive Directors for
2022 will be increased by 3%. The new
salaries for June Felix (CEO), Charlie
Rozes (CFO) and Jon Noble (COO), which
apply from 1 June 2022, are £633k,
£508.5k and £422.5k, respectively.
Thisis below the 5.5% average increase
awarded to the wider UK workforce.
Similarly, the difference in the actual pay
awarded and the average increase for
the wider UK workforce will be diverted
to lower paid employees in the same
way as the increase for the Chairman
and Non-Executive Directors.
Directors’ Remuneration Report and Policy continued
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IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Incentives for FY23
There are no changes to the incentive
levels for FY23, with the maximum
opportunity under the SPP remaining at
500% of salary for the CEO and 400% of
salary for the CFO and COO. SPP awards
for FY23 will continue to be based 55%
on EPS performance, 25% on TSR
performance relative to the FTSE 250
(excluding investment trusts) and 20%
on non-financial measures. Further
details of performance conditions
attached to FY23 incentives can be
found below on page 88.
Directors’ Remuneration Policy
Our current Remuneration Policy will
reach the end of its life at the 2023 AGM
and therefore over the course of FY23
the Committee will undertake a detailed
reviewed of the Policy to ensure that it
isappropriate for, and aligned to, our
evolving strategy, while ensuring that
remuneration outcomes remain aligned
to the experiences of our shareholders,
employees and other stakeholders. As
part of this we will carefully consider
whether the SPP remains the right
incentive plan or whether an alternative
approach would be more appropriate.
The Committee believes that the current
Policy has operated as we intended
during the year.
Wider workforce remuneration
The Committee has consistently
considered wider colleague pay as
context for the decisions it makes. The
Committee is kept updated through the
year on general employment conditions,
basic salary increase budgets (with
particular focus on this in FY22 in the
context of inflation levels and increases
in the cost of living), the level of bonus
pools and payouts, and participation in
share plans. The Committee is therefore
aware of how total remuneration at the
Executive Director level compares to the
total remuneration of the general
population of employees.
The Company has a People Forum which
is attended by employee representatives
from across the business. The People
Forum discusses pay as well as other
matters which affect employees. The
impact of the rising cost of living was
also discussed with the People Forum
aswell as what the Company is doing
tosupport employees with this. It was
explained to employees that the
Directors of the Company had decided
to either give up their increase for
thisyear or take a materially reduced
increase, with the money given up being
used to increase salaries of lower-paid
employees. I attended the People Forum
during the year and was able to hear
participants’ views on pay – I would like
to thank participants, whose feedback
and views were considered by the
Committee as part of its annual process.
Conclusion
The Committee is satisfied that our
outcomes for FY22 are aligned with
theinterests of shareholders, that they
reflect our strong performance over this
year and that the Policy has operated
asintended. I look forward to receiving
your support for the Directors’
Remuneration Report at the AGM
on21 September 2022.
Helen Stevenson
Chair of the Remuneration Committee
20 July 2022
Total |
£3,579
Total | £2,639
Total | £1,951
June Felix
Charlie Rozes
Jon Noble
Salary Pension and benefits SPP Buyout awards
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Remuneration at a Glance
Remuneration in FY22
Total remuneration (£000)
FY22 SPP outcome
Threshold Maximum
Metric Weighting EPS: 0% payout, TSR: 25% payout 100% payout Outcome
EPS 55%
Actual: 96.3p
100%
62.2p 76.0p
TSR 25%
Actual: 90th percentile
100%
Median ranking Upper quartile ranking
Non-financial
Details of performance are set out
on page88
20%
Actual: 95%
95%
0% 100%
Total 100% 99%
Discretionary adjustment -5%
Final 94%
SPP outcome
Maximum opportunity % of maximum % of salary
Delivered in cash
(30%)
Deferred into shares
(70%)
June Felix 500% of salary 94% 470% £866,000 £2,022,000
Charlie Rozes 400% of salary 94% 376% £557,000 £1,299,000
Jon Noble 400% of salary 94% 376% £451,000 £1,052,000
We have delivered an excellent set of results
inFY22 as well as continued to deliver on our
strategy to expand and diversify, and this is
reflected in pay outcomes.
The following section shows a summary
oftheperformance measures we use, and
theresulting pay for Executive Directors.
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IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Summary of 2020 Directors’ Remuneration Policy
The Directors’ Remuneration Policy describes the framework, principles and structures that guide the Remuneration
Committee’s decision-making process in relation to Directors’ remuneration arrangements.
Objectives of the Remuneration Policy
The Remuneration Policy is set to ensure that remuneration is sufficiently competitive to attract and retain Senior Executives
ofa high calibre and to provide a suitable incentive to drive performance, while remaining appropriate in the context of our
approach to pay throughout the organisation. The Policy has been designed taking into account the principles of Provision 40
ofthe Code, and the table below sets out how the Policy aligns with these principles.
Clarity We provide open and transparent disclosures regarding our executive remuneration arrangements.
OurRemuneration Policy is designed to recognise and reward performance that supports the execution
of strategy and helps drive sustainable shareholder value growth.
Simplicity Our Remuneration Policy is designed to be straightforward, easy for shareholders and employees to
understand, and simple for the Group to monitor.
Predictability Our Remuneration Policy contains details of the maximum opportunity levels for each component
of pay. Actual incentive outcomes vary depending on the level of the performance achieved against
specific measures.
Proportionality,
risk and alignment
toculture
We believe the Remuneration Policy is consistent with regulatory and corporate governance
requirements. It is also designed to achieve effective risk management through the choice of
performance measures and targets, shareholding requirements and malus and clawback provisions.
Remuneration Policy table
The following table summarises each element of the Remuneration Policy for the Executive Directors and provides an overview
of how the Remuneration Policy will be implemented for FY23.
We have not made any changes to the Directors’ Remuneration Policy that was approved at the 2020 AGM on 17 September
2020. Full details of the approved Policy are included within the 2020 Annual Report and Accounts, which can be viewed in the
‘investors’ section on our website iggroup.com. In line with the DRR reporting regulations we will be reviewing our Policy during
the year and will be submitting a new policy to shareholders for approval at the 2023 AGM.
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Purpose and link to strategy Operation Opportunity Implementation for FY23
Base salary
To recruit and retain key
employees of an appropriate
calibre to deliver the strategic
objectives of the Group.
Base salaries are normally
reviewed by the Committee
annually, with salary increases
effective from 1 June.
Base salaries are set taking
into account:
¼ Scale, scope and
responsibility of the role
¼ Experience of the individual
and their performance
¼ Pay and workforce policies
elsewhere in the Group
¼ Business performance and
prevailing market conditions
¼ Salary levels at other
companies of a similar size,
complexity, geographic
spread and business focus
While there is no maximum
salary, increases will normally
be in line with the typical
increases awarded to
otheremployees.
However, increases may be
above this level in certain
circumstances.
During the year the
Committee reviewed the
COO’s salary in light of the
broadening of his role to
include responsibilities such
as leadership of the data
science and governance
strategy, and of our approach
to ESG. Taking into account
the increase in the COO’s
responsibilities, the
Committee determined that it
was appropriate to increase
the COO’s salary to £410,000
per annum (8.2% increase)
from 1 October 2021.
As part of the normal annual
salary review, the Committee
has agreed that salaries for
Executive Directors will be
increased by 3% this year,
below the average increase
for the wider workforce of
5.5%. This difference in the
actual pay awarded and the
average increase for the wider
UK workforce will be diverted
to lower-paid employees
whoare feeling the greatest
impact from the rising cost of
living. Salaries from 1 June
2022 are therefore:
¼ CEO – £633k
¼ CFO – £508.5k
¼ COO – £422.5k
Directors’ Remuneration Report and Policy continued
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IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Purpose and link to strategy Operation Opportunity Implementation for FY23
Pension and benefits
Competitive, cost-effective
flexible pension and benefits
allowance to help recruit and
retain Executive Directors.
Executive Directors are eligible
to participate in the Company’s
flexible pension and benefits
plan, from which Executive
Directors can receive a range
of benefits, Company pension
contribution or cash allowance.
Executive Directors may
participate in a share-incentive
plan (SIP), savings-related share
option scheme (SAYE) or any
other all-employee plans on the
same basis as other employees
up to HMRC-approved limits.
The Committee may introduce
other benefits if it is considered
appropriate to do so.
Where appropriate, the
Company may provide support
to Executive Directors in the
preparation of their tax returns.
Executive Directors shall be
reimbursed for all reasonable
expenses and the Company
may settle any tax incurred.
Where an Executive Director is
required to relocate to perform
their role, the appropriate
one-off or ongoing benefits
may be provided (eg housing,
schooling etc).
The maximum pension
andbenefits allowance for
Executive Directors will be
inline with the allowance
available to the wider
workforce in the UK. This rate
is currently 12% of salary.
Executive Directors may
participate in a SIP, SAYE
orother all-employee plan
upto the same maximum
asother employees.
Pension and benefits
allowances for Executive
Directors for FY23 are
unchanged and are as follows:
¼ CEO – 12% of salary
¼ CFO – 12% of salary
¼ COO – 12% of salary
This is in line with the
rateavailable to the
widerworkforce.
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Purpose and link to strategy Operation Opportunity Implementation for FY23
Share ownership policy
This aligns the interests
ofmanagement and
shareholders both in and post
employment and promotes a
long-term approach
toperformance
andriskmanagement.
Executive Directors are
expected to build a holding
ofshares to the value
ofaminimum of 200%
ofbasesalary.
It is normally expected that
theshareholding guideline
would be met within five years
from the date of appointment
(unless exceptional
circumstances apply).
The Committee will review
progress annually, with an
expectation that Executive
Directors will make progress
towards achieving the
shareholding policy each year.
Following ceasing to be an
Executive Director, Executive
Directors will normally be
expected to maintain a
minimum shareholding of
200% of salary (or actual
shareholding if lower) for two
years. This guideline applies
toshares that are released
from the SPP on or after the
adoption of the new Policy at
the 2020 AGM. Any shares
purchased by the Executive
Directors will not be subject to
the guideline.
Not applicable The current shareholdings of
the Executive Directors are:
¼ CEO – 630% of salary
¼ CFO – 206% of salary
¼ COO – 392% of salary
Directors’ Remuneration Report and Policy continued
87
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Purpose and link to strategy Operation Opportunity Performance metrics Implementation for FY23
Sustained performance plan
The SPP provides a
single incentive plan for
Executive Directors
rather than having
separate annual and
long-term plans.
It provides a simple and
competitive incentive
mechanism that
encourages and
rewards both annual
and sustained long-
term performance,
linked to the Group’s
strategic objectives.
A significant portion of
the SPP award is in
shares, encouraging
Executive Directors to
build up a substantial
stake in the Company,
thereby aligning
theinterests of
management with
shareholders.
Awards are made after
the announcement of
results relating to each
‘plan year’.
For FY21 onwards, plan
contributions pay out
asfollows:
¼ 30% of the award is
delivered in cash
shortly following the
end of the plan year
¼ 20% of the amount
earned will be
awarded in shares
which will be
released to
participants following
the end of the fourth
financial year that
follows the start of
the plan year
¼ 50% of the amount
earned will be
awarded in shares
which will be
released to
participants following
the end of the fifth
financial year that
follows the start of
the plan year
The Committee retains
discretion to scale back
the vesting of awards
atthe end of years
fourand five if the
underlying performance
of the participant and/
or the Group does not
justify the payout of
theaward.
The maximum plan
contribution in respect
of a plan year is 500% of
salary for the CEO and
400% of salary for other
Executive Directors.
Awards are determined
based on performance
for the prior financial
year (financial and
strategic measures) and
for up to three financial
years ending with the
plan year TSR measures.
Performance measures
may comprise, for
example, EPS targets,
TSR and strategic
non-financial measures.
The Committee may
vary performance
measures from year to
year in accordance with
strategic priorities and
the regulatory
environment.
No more than 25% of
the award will normally
be payable for threshold
levels of performance.
The Committee may, in
its discretion, adjust SPP
awards, if it considers
that the outcome
doesnot reflect the
underlying financial
ornon-financial
performance of the
participant and/or the
Group over the relevant
period or that such
vesting level is not
appropriate in
thecontext of
circumstances that
were unexpected or
unforeseen when the
targets were set. When
making this judgement
the Committee may
take into account
suchfactors as
theCommittee
considers relevant.
For FY23 the maximum
plan contribution will
continue to be 500%
ofsalary for the CEO
and 400% for other
Executive Directors.
For FY23 the level of
plan contribution will be
based on:
¼ 55% EPS
performance
¼ 25% on relative TSR
compared to the
FTSE 250 (excluding
investment trusts)
¼ 20% on non-financial
measures, see below
for further details
Performance for EPS
and non-financial
measures will be
assessed over FY23.
TSR performance
willbe assessed over
the three-year period
from 1 June 2020 to
31 May 2023.
EPS targets and
non-financial measures
are considered to be
commercially sensitive
and therefore have not
been disclosed. The
Committee’s intention
isthat these targets
willbe disclosed
retrospectively in
nextyear’s annual
remuneration report.
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Further details on performance measures
For FY23 it is intended that SPP awards will be based on a combination of EPS, TSR and non-financial strategic and operational
performance measures.
Metrics Rationale and link to the strategic KPIs Further details
TSR relative to the FTSE 250
(excluding investment trusts)
25% weighting
TSR measures the total return to
theCompany’s shareholders, both
through share price growth and
dividendspaid, and as such it is aligned
toshareholder interests.
TSR is influenced by how well the Group
performs on a range of other metrics,
including financial indicators such
asrevenue, profit, cash generation
anddividends, and non-financial
indicatorssuch as client satisfaction
andoperational performance.
TSR will be assessed over the period
1 June 2020 to 31 May 2023.
25% of this portion will be awarded for
median performance with 100% of this
portion being awarded for upper quartile
performance (straight-line assessment
in-between).
EPS
55% weighting
EPS is a key indicator of the profits
generated for shareholders, and a
reflection of both revenue growth
and cost control.
EPS targets will be assessed based
onperformance for the year ending
31 May 2023.
The Committee sets EPS targets
takinginto account relevant factors
including Board-approved budget,
marketconsensus expectations and
historical targets.
Payouts start to accrue for reaching
threshold levels of performance with
100% of this portion being awarded for
the achievement of maximum
performance.
Non-financial strategic and operational performance schemes (20% weighting)
The non-financial metrics are specifically designed to measure factors important to IG in continuing to operate on a profitable
and sustainable basis for the long term. These goals include a number of objectives which are focused on our sustainability
agenda both from an environmental, people and societal perspective. Non-financial measures have been grouped into three
categories: strategic enablers (50%), people and culture (including diversity and inclusion) (25%) and client experience (25%).
When assessing the non-financial metrics, the Committee deliberately separates the assessment from any review of financial
performance, viewing them both as important, but recognising they are assessed and rewarded separately. This is to ensure
that management are incentivised to deliver in-year non-financial milestones which are important to maintaining sound
operations and delivering profit and shareholder value in the future.
Strategic enablers
1
50% weighting
Driving the longer-term diversification and strategic direction of the organisation by
measuring progress against key projects and initiatives that will deliver on our purpose
to power the pursuit of financial freedom for the ambitious.
People and culture (including diversity
and inclusion)
1
25% weighting
Considering the development and conduct of our people, reinforcing our reputation as
a responsible company and promoting a culture that champions the client, learns fast
together to raise the bar.
Client experience
25% weighting
1
The short and longer-term development of the client-focused initiatives to provide an
outstanding client experience to our growing and diverse client base.
1 At IG we believe that in order to deliver sustainable progress it is important that a focus on ESG is embedded through the business strategy and its operation. In keeping with this we
have embedded ESG-aligned metrics in the ‘strategic enablers’, ‘people and culture’ and ‘client experience’ sections of our non-financial metrics. For example, diversity and inclusion,
business ethics and information security. ESG-aligned measures will account for at least 15% of the overall SPP.
Directors’ Remuneration Report and Policy continued
89
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Chair and Non-Executive Directors
The table below summarises each element of the Remuneration Policy applicable to the Chair and the Non-Executive Directors.
Purpose and link to strategy Operation Opportunity Implementation for FY23
To attract and retain Non-
Executive Directors of
appropriate calibre and
experience.
The Committee determines
the fee for the Chair (without
the Chair present).
The Board is responsible
forsetting Non-Executive
Directors’ fees. The Non-
Executive Directors are not
involved in any discussions or
decisions by the Board about
their own remuneration.
Fees are set taking
intoaccount the time
commitment required to fulfil
the role and typical practice
at other similar companies.
Fees are within the limits set
by the Articles of Association
and take account of
thecommitment and
responsibilities of the
relevantrole.
The Chair receives a single
feeto cover all of their
Boardduties.
Non-Executive Directors
receive a fee for carrying out
their duties. They may receive
additional fees if they chair
the Board Committees, and
for holding the post of Senior
Independent Director.
Additional fees may be
paidfor additional time
commitments if considered
appropriate.
Committee membership fees
may be paid.
Reasonable costs in relation
to travel and accommodation
for business purposes are
reimbursed to the Chair and
Non-Executive Directors. The
Company may meet any tax
liabilities that may arise on
such expenses.
The Chair and Non-Executive
Directors do not receive
apension and benefits
allowance or participate
inincentive schemes.
Non-significant benefits
maybe introduced if
considered appropriate.
In light of inflation and the
impact on the cost of living,
theChair and Non-Executive
Directors elected not to receive
an increase in fees for FY23
andrequested any increase
bediverted to lower-paid
employees feeling the greatest
impact from the rising cost of
living. The fees from 1 June
2022 are therefore as follows:
¼ Non-Executive Director base
fee – £65,500
¼ Committee Chairs (other
than the Nomination
Committee) – £25,000
¼ Senior Independent Director
– £15,000
¼ Committee membership
fees (excluding the
Nomination Committee
and the Group Board Chair)
– £3,000
¼ North American Board Chair
– £65,000
¼ North American Board
member – £25,000
¼ Chair fee – £302,000
With effect from 1 November
2021, taking into account the
additional responsibilities and
time commitment, an additional
fee of £65,000 was introduced
for the Chair of the North
American Board and an
additional fee of £25,000 was
introduced for being a member
of the North American Board.
The Chair of the North
American Board also receives
an additional £20,000 per
annum to compensate for time
spent in travel to attending
Board meetings.
Board Non-Executive Directors
required to travel a significant
distance to attend Board
meetings receive an additional
£20,000 per annum to
compensate for time spent
travelling. This has been applied
for Susan Skerritt from
December 2021.
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IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Executive Directors’ service contracts
Executive Directors are employed under a service contract with IG Group Limited (a wholly owned intermediate holding
company) for the benefit of the Company and the Group.
The dates on which service contracts are entered into and notice periods are as follows:
¼ June Felix – 30 October 2018 (12 months’ notice from either party)
¼ Charlie Rozes – 1 June 2020 (12 months’ notice from either party)
¼ Jon Noble – 22 May 2018 (12 months’ notice from either party). Note: Jon Noble’s notice period increased from six months to
12 months with effect from 1 October 2021.
Non-Executive Directors’ service contracts
Non-Executive Directors do not have service contracts; they are engaged by letters of appointment. Each Non-Executive
Director is appointed for an initial term of three years subject to re-election, but the appointment can be terminated on three
months’ notice. Non-Executive Directors may receive reimbursement for business expenses incurred in the course of their
duties, including tax therein if applicable.
Annual Report on Remuneration
This report has been prepared in accordance with the Companies Act 2006, Schedule 8 of the Large and Medium-sized
Companies and Groups (Accounts and Reports) Regulations 2008 (as amended in 2013, 2018 and 2019) and the FCA’s Listing
Rules. TheDirectors’ Remuneration Report, excluding the Policy, will be subject to an advisory shareholder vote at the AGM on
21September 2022.
This part of the report includes a summary of how we implemented the Policy in the financial year ended 31 May 2022.
The parts of the report that are subject to audit have been marked.
Implementation of Remuneration Policy in the financial year ending 31 May 2022
Total single figure of remuneration – Executive Directors (audited)
Contribution to SPP account
6
Name of
Director Year
Fees/basic
salary
£000
Benefits
allowance/
benefits
3,4
£000
Pension
£000
Total
fixed pay
£000
Buy-out
awards
5
£000
Vested
element
£000
Deferred
element
£000
Total
variable pay
£000
Total
£000
J Felix 2022 615 76 – 691 – 866 2,022 2,888 3,579
2021 610 87 – 695 – 855 1,994 2,849 3,546
C Rozes 2022 494 55 4 553 230 557 1,299 2,086 2,639
2021 490 56 3 549 309 549 1,282 2,14 0 2,689
J Noble
1
2022 400 44 4 448 – 451 1,052 1,503 1,951
2021 376 41 4 421 – 422 985 1,407 1,828
Former Executive Director
B Messer
2
2022 118 13 1 132 – 133 310 443 575
2021 376 42 4 422 – 422 985 1,407 1,829
1 J Noble received a salary increase from £379,000 to £410,000 (8.2% increase), effective from 1 October 2021. For further details see page 80.
2 B Messer stepped down from the Board on 22 September 2021. Remuneration is shown to this date. She remained with the business for the remainder of her notice providing
handover, ceasing employment on 21 January 2022. She was entitled to a pro-rated SPP award in respect of her period of employment (to 21 January 2022) with a value totalling
£913,484. This will be delivered 30% in cash and 70% in share options (which will be released 20% of the total amount in July 2025 and 50% of the total amount in July 2026).
3 Benefits can include critical illness cover, dental cover, health assessments, income protection cover, life assurance, travel insurance and private medical cover. It was agreed under the
updated Remuneration Policy for FY21 that, where appropriate, the Company may provide support to Executive Directors in the preparation of their tax returns. J Felix, C Rozes, J Noble
and B Messer received a flexible benefits and pensions allowance of 12% of base salary less any benefits taken. Executives have the option to receive part, or all, of their pension and
benefits entitlement in cash.
4 The 2022 benefits figure for J Felix and the restated 2021 benefits figure includes the £1.8k of matching shares J Felix received as a participant in the share-incentive plan. The 2021
benefits figure has also been restated to include the £1.8k of matching shares J Felix received as a participant in the share incentive plan in 2021.
5 As disclosed in the 2020 Annual Report, C Rozes forfeited a number of share awards which the Company bought out on a like-for-like basis. As part of his buy-out, Charlie was granted
an award over 35,616 shares which vested on 30 June 2022 based on the average of the performance outcome of the SPP for FY21 and FY22, which was 93.7% of maximum. This
resulted in 33,372 shares vesting, with an additional 3,828 shares accrued in respect of dividends. For the purpose of the single figure this award has been valued based on the share
price on the date of vesting of £6.905. The share price used to determine the level of award was £7.34 and the share price on the date vesting was £6.905 therefore none of the value in
the single figure table is attributable to share price appreciation. The Committee did not exercise discretion in relation to this share price appreciation.
6 Figures provided are the cash values of the SPP contributions in respect of performance for the period ending 31 May 2022 (ie plan year 9). The vested element is the proportion of the
plan year contribution for the relevant period that is paid in cash shortly following the end of the financial year (30% of the total amount). The deferred element is the proportion that is
awarded in share options that will be released 20% of the total amount in July 2025 and 50% of the total amount in July 2026. Details of SPP awards held in the plan account related to
awards for prior years are provided in the Other share awards outstanding table on page 94. As awards are included based on their value at the date of grant, no portion of the award
disclosed is attributable to share price growth and the Committee did not exercise discretion in relation to share price.
Directors’ Remuneration Report and Policy continued
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Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Total single figure of remuneration – Non-Executive Directors (audited)
Name of Director Year
Fees
5,6
£000
Benefits
7
£000
Total
£000
M McTighe 2022 302 – 302
2021 300 – 300
J Moulds 2022 109 – 109
2021 102 – 102
R Bhasin
1
2022 72 – 72
2021 63 – 63
A Didham 2022 97 – 97
2021 81 – 81
Wu Gang
2
2022 69 – 69
2021 45 – 45
S-A Hibberd 2022 97 – 97
2021 94 – 94
M Le May 2022 114 4 118
2021 79 – 79
S Skerritt
3
2022 83 14 97
2021 – – –
H Stevenson 2022 94 – 94
2021 86 – 86
Former Directors
L Pollina
4
2022 16 – 16
2021 16 – 16
1 R Bhasin joined the Board on 6 July 2020. Remuneration for FY21 is shown from this date.
2 Wu Gang joined the Board on 30 September 2020. Remuneration for FY21 is shown from this date.
3 S Skerritt joined the Board on 9 July 2021. Remuneration is shown from this date.
4 L Pollina joined the Board on 4 March 2021. Remuneration for FY21 is shown from this date. L Pollina stepped down from the Board on 9 July 2021. Remuneration for FY22 is shown to
this date.
5 Other than in respect of the Chair, basic Non-Executive Director fees were £65,500 per annum in FY22 (£65,000 per annum in FY21) with an additional £25,000 paid for chairing a
Board Committee (other than the Nomination Committee) and £3,000 for membership of a Committee (excluding the Nomination Committee). The Senior Independent Director also
receives an additional fee. This was £10,000 until 17 September 2020 and was increased to £15,000 from this date. With effect from 1 November 2021, taking into account the
additional responsibilities and time commitment, an additional fee of £65,000 was introduced for the Chair of the North American Board and an additional fee of £25,000 was
introduced for being a member of the North American Board. The Chair of the North American Board also receives an additional £20,000 per annum to compensate them for the
additional time spent in travel to attending Board meetings.
6 S Skerritt receives an additional £20,000 per annum to compensate her for the additional time spent in travel attending Group Board meetings.
7 Certain Non-Executive Directors’ expenses relating to the performance of a Director’s duties, such as travel to and from Company meetings and related accommodation, have been
classified as taxable benefits. In such cases, the Company will ensure that the Director is kept whole by settling the expense and any related tax. The figures shown include the cost of
the taxable benefit plus the related personal tax charge.
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Sustained performance plan (SPP)
Determination of SPP contribution for the financial year ending 31 May 2022 (audited)
Performance targets for plan year 9 (financial year ending 31 May 2022) comprised EPS targets, TSR and non-financial
measures. TSR performance was measured over the three-year period from 1 June 2019 to 31 May 2022, and EPS and
non-financial measures over the financial year ending 31 May 2022.
Performance
measure Weighting
Threshold (25% payout for TSR and
0% for EPS)
Maximum
(100% payout) Actual performance
Percentage of
maximum award
to Directors
EPS 55% 62.2p 76.0p 96.3p 100%
TSR 25% Median ranking Upper quartile ranking +74.9% T S R
18th out 164 companies
100%
Non-financial 20% 0% 100% 95% of maximum awarded
(see below for details)
95%
Total 100% 99%
Discretionary
adjustment
-5%
Final 94%
The maximum award for the CEO role is 500% of basic salary, with all other Executive Directors being eligible for a maximum
award of 400% of basic salary.
Performance measures: how these are set, and a review of performance for the year ended 31 May 2022
EPS (55% weighting)
At the start of the financial year, the Committee established an EPS range in order to measure the performance and determine
the payouts under the SPP. In doing this, the Committee took into account a number of relevant factors, including the Board-
approved budget and market consensus expectations.
EPS performance for FY22 was 96.3 pence, which is materially ahead of internal and external expectations of performance at
the start of the year. While EPS is lower than our record performance in FY21 it is still significantly ahead of our performance for
FY20 and prior years, demonstrating the long-term progress we are making in the execution of our strategy.
TSR (25% weighting)
TSR performance is assessed against the FTSE 250 (excluding investment trusts). 25% of this element is awarded for median
performance with the full portion being awarded for upper quartile performance or above with straight-line vesting in between.
For the award to be granted in respect of the year to 31 May 2022, TSR was measured over the three-year period from 1 June
2019 to 31 May 2022. Actual TSR performance for the three-year period was 74.9% (2021: 29.4%). TSR was positioned above
the upper quartile compared to the comparator group over the three-year period and therefore 100% of this element will be
awarded.
Non-financial measures (20% weighting)
The Committee approved a series of non-financial measures comprising strategic drivers, client experience, people and culture
and environmental and societal impact during the year ended 31 May 2022. These measures are also used for determining a
portion of the staff general bonus pool.
An average of the performance under the specific objectives resulted in an overall assessment of 95% (2021: 94%) of the
potential payout under this element.
Directors’ Remuneration Report and Policy continued
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Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
The table below provides details of the individual measures considered and their performance assessment for the year ended
31 May 2022.
Component Detail FY22 outcome
Strategic drivers
40% weighting
¼ Completion of tastytrade acquisition. Excellent progress on
integration from a talent, marketing, risk and controls, technology
and operations perspective. Synergies workstreams
progressingwell
¼ Excellent progress in technology development providing more
capacity headroom for peak trading
¼ Good progress in our exchange traded derivatives business
inEurope
37%
Client experience
25% weighting
¼ Excellent systems uptime reflecting the investment made
in this area in recent years
¼ Reduction in number of complaints and enhanced customer
satisfaction
23%
People and culture
25% weighting
¼ Excellent progress in embedding our purpose throughout
theorganisation. Improved employee engagement driven
bystrength of leadership team
¼ Maintained good regulatory compliance and relationship
withregulators
¼ Improvement in gender diversity throughout the organisation,
drivenby changes in policies and practices
25%
Environmental and societal impact
10% weighting
¼ Programmes implemented to support young people, significant
donations to charitable causes and increase in volunteering days
¼ Improved ESG rating from external rating agencies, maintained
carbon neutral status. Carbon literacy training for all Board and
senior executives
10%
Discretionary adjustment
The Group has continued to perform strongly during the year, with financial outperformance, upper quartile shareholder
returns and excellent progress against our operational and strategic objectives.
Non-financial performance during the year was measured and assessed giving due consideration to, amongst other factors,
thesuccessful ongoing integration of tastytrade and tastytrade’s revenue performance versus initial expectations for FY22 set
against our confidence in the long-term opportunities that tastytrade brings to the wider Group. Consideration was also given
to an improved overall client experience, increased employee engagement, and improved societal and environmental impacts.
After careful assessment, the Committee judged that non-financial performance was 95% out of 100%.
Based on the above, while the outcome of the SPP award for the FY22 was calculated at 99% of maximum, the Committee
elected to apply a discretionary adjustment for the Executive Directors of -5% to the outcome reflecting the relative
performance against internal targets for some individual businesses. This has resulted in a final vesting outcome for FY22 SPP
of94% of maximum.
Following this discretionary adjustment, the Committee concluded that the level of the SPP award for FY22 was a fair reflection
of the shareholder value delivered, as well as the enhanced financial performance, and that it was appropriate in the context of
the experience of our other stakeholders.
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Overall summary
Based on the performance for the financial year ending 31 May 2022, we will grant awards under the SPP at 94% of the
maximum potential payout to the Executive Directors after the announcement of the results. The actual number of shares that
will be contributed to a Director’s plan account will be based on the ten-day average share price immediately prior to grant.
Since its introduction nine years ago, the average payout under the SPP is 66% of the maximum. The Committee considers that
the outcomes under the SPP are a fair reflection of performance delivered, and that they are aligned with value achieved for
shareholders over this period.
Financial year 2014 2015 2016 2017 2018 2019 2020 2021 2022
9-year
average
SPP contribution
(% maximum) 54% 41% 90% 27% 80% 18.6% 97. 2% 93.4% 94.0% 66%
Awards granted during the year ended 31 May 2022 (audited)
The SPP awards granted during the financial year ended 31 May 2022 in respect of performance to 31 May 2021 (plan year 8)
are as follows:
Contribution
% of salary
1
Value of options
awarded
Number of
options awarded
2
Number of
options in the plan
account after
plan year 8
contribution
3
Number of
options vested
and exercised
during the year
4
Number of
options lapsed
Number of
options in the plan
account at the
end of the year
J Felix 467% £1,994,988 224,610 529,833 101,741 – 428,092
C Rozes 374% £1,281,442 144,339 144,339 – – 144,339
J Noble 374% £984,623 110 , 9 0 6 353,918 81,003 – 272,915
B Messer 374% £984,623 110, 9 0 6 3 47,577 78,890 – 268,687
1 30% of the award is delivered in cash following the end of the plan year. The remaining 70% of the award is delivered in nominal cost options (the number and value of which are shown
above).
2 The number of options contributed to the plan account was based on the ten-business-day average share price immediately post the announcement date of the Group’s results for the
year ended 31 May 2021 of 887.8 pence per share. Awards were granted in the form of nominal cost options and are subject to continued employment. The release of shares is subject
to the satisfaction of the underlying financial performance to be tested in the final year of the plan. Full details of performance targets applied to the FY21 SPP awards and the
assessment of performance against targets are set on out pages 89 to 92 of the 2021 Directors’ Remuneration Report.
3 In addition to the awards made in respect of plan year 8, this also includes the brought forward number of options in the plan account from plan years 1 – 7 (where relevant) with its
respective accrued dividend shares.
4 The closing share price on 5 August 2021, the date of exercise, was £9.115 and the exercise price of the share options was 0.005p.
For awards granted in respect of years up to and including the financial year ending 31 May 2020 (plan years 1 – 7), in
accordance with the scheme rules 33.3% of the cumulative awards in the plan account will vest in July 2022, with the vesting of
the remaining options deferred. The July 2022 vesting will include additional dividend shares accrued as follows in respect of
plan year 1 – 7 awards held in the plan account: J Felix 16,234, J Noble 12,926 and B Messer 12,733 based on reinvestment at
the dividend payment date.
The SPP reaches the end of its ten-year life following the end of FY23. In accordance with the plan rules 50% of the remaining
balance of the participants’ plan account will be released in July 2023, with a further 25% of the remaining balance released in
both July 2024 and July 2025. J Felix and J Noble have 143,181 shares and 113,997 shares, respectively, which will be subject to
this treatment. Awards granted in relation to plan years from FY21 onwards will continue to vest according to their normal
payout schedule following the termination of the SPP.
The vesting schedule for SPP award granted in respect of FY21 onwards are unaffected.
Buy-out awards for C Rozes (audited)
On leaving his previous role, C Rozes forfeited a number of share awards which the Company bought out on a like-for-like basis.
All awards were granted by the Company on 6 August 2020 and were in the form of nominal cost options. Part of C Rozes’
buy-out was in the form of nil-cost options which vest subject to continued employment between 1 May 2021 and 1 May 2023.
As part of his buy-out, C Rozes was also granted an award over 35,616 shares which vested on 30 June 2022 based on the
average of the performance outcome of the SPP for FY21 and FY22, which was 93.7% of maximum. This resulted in 33,372
shares vesting, with an additional 3,828 shares accrued in respect of dividends.
Awards to be granted in respect of the year ended 31 May 2022
SPP awards for the financial year ending 31 May 2022 will be delivered 30% in cash, 20% in share options released in July 2025
and 50% in share options released in July 2026.
Directors’ Remuneration Report and Policy continued
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Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Details of the 70% of the SPP award due to be awarded in shares, using an estimate of the options to be granted in respect of
plan year 9 (ie performance to 31 May 2022), are set out below:
Event
Plan contribution in respect of
period ended 31 May 2022
(estimated number of options)
1
J Felix Plan year 9 282,558
C Rozes Plan year 9 181,536
J Noble Plan year 9 147,019
1 Executive Directors will be granted awards, in respect of 70% of the amount earned, for plan year 9 following the announcement of results for the year ended 31 May 2022 on 20 July
2022. The share price used to calculate the number of awards to be granted will be the ten-day average share price after this date. As the actual average share price is not known at the
time of signing of the Annual Report, the above number of awards has been estimated using a share price of 715.5 pence, being the share price on 31 May 2022. Share awards have an
exercise price of 0.005 pence.
Other share awards outstanding (audited)
Award date
Share price at
award date
Number as at
31 May 2021
Number awarded
during the year
Number lapsed
during the year
Number exercised
during the year
Number
outstanding at
31 May 22
J Felix
SIP: matching shares 6 Aug 19 565.29p 318 0 0 0 318
SIP: matching shares 6 Aug 20 74 3.66p 242 0 0 0 242
SIP: matching shares 5 Aug 21 909.24p 0 198 0 0 198
Total 560 198 0 0 758
Award date
Share price at
award date
Number as at
31 May 2021
Number awarded
during the year
Number lapsed
during the year
Number exercised
during the year
Number
outstanding at
31 May 22
J Noble
SIP: matching shares 6 Aug 19 565.29p 318 0 0 0 318
Total 318 0 0 0 318
Award date
Share price at
award date
Number as at
31 May 2021
Number awarded
during the year
Number lapsed
during the year
Number of
dividend
equivalents added
at vesting
Number exercised
during the year
Number
outstanding at
31 May 22
C Rozes
1
Buy-out
award
2
6 Aug 20 734.00p 17,814 0 0 2,041 19,855 0
Buy-out
award
3
6 Aug 20 734.00p 35,616 0 0 0 0 35,616
Buy-out
award
4
6 Aug 20 734.00p 4,357 0 0 248 2,426 2,179
Total 57,787 0 0 2,289 22,281 37,795
1 On leaving his previous role, C Rozes forfeited a number of share awards which the Company has bought out on a like-for-like basis as summarised in the table above. For details of
these awards see the 2020 Annual Report.
2 An award of restricted shares vesting in equal tranches on 1 May 2021 and 1 May 2022 (subject to continued employment).
3 An award of performance shares vesting on 30 June 2022 to the same extent as the average vesting outcome for the financial years ending 31 May 2021 and 31 May 2022 of awards
granted under the IG Group sustained performance plan which was 93.7% of maximum. This resulted in 33,372 shares vesting, with an additional 3,828 shares accrued in respect
ofdividends.
4 An award of restricted shares vesting in equal tranches on 1 May 2021, 1 May 2022 and 1 May 2023 (subject to continued employment).
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Table of Directors’ share interests (audited)
Legally owned
4
Total
% of salary held
under shareholding
policy
7
31 May 2021 31 May 2022
Share with
performance
conditions
Share options
without
performance
5,6
Vested but
unexercised 31 May 2022 % salary
Executive Directors
J Felix 20 6,111 318,626 – 428,850 – 747,476 630%
C Rozes 25,111 48,120 35,616 146,518 – 230,254 206%
J Noble 83,207 83,207 – 273,233 – 356,440 392%
Non-Executive Directors
M McTighe 6,600 6,600 – – – 6,600 –
J Moulds – 100,000 – – – 100,000 –
R Bhasin – – – – – – –
A Didham – 4,894 – – – 4,894 –
S-A Hibberd – – – – – – –
Wu Gang – – – – – – –
M Le May – – – – – – –
S Skerritt
1
– – – – – – –
H Stevenson – – – – – – –
Former Directors
B Messer
2
53,172 – – 268,687 – 268,687 262%
L Pollina
3
– – – – – – –
1 S Skerritt joined the Board on 9 July 2021.
2 B Messer stepped down from the Board on 22 September 2021.
3 L Pollina stepped down from the Board on 9 July 2021.
4 This figure includes partnership shares that are purchased as part of the Group’s share-incentive plan (SIP) which are not subject to vesting conditions.
5 These figures include the number of matching shares held at 31 May 2022 as part of the Group’s SIP, which will vest after three years from the respective award date, as long as
employees remain employed by the Group.
6 This figure excludes awards under the SPP scheme for performance year ending 31 May 2022, which will be granted following the announcement of the Group’s results on 20 July
2022. The awards held in the SPP plan account include those in respect of plan years 1 – 8 as at 31 May 2022.
7 Calculated as shares owned on 31 May 2022 plus the unvested shares held within the SPP on a net of tax basis at the closing mid-market share price of 715.5 pence on 31 May 2022.
Under the share ownership policy, the Executive Directors are expected to hold shares to the value of a minimum of 200% of
base salary. Shares owned by the Executive Directors as well as unvested SPP share options (on a net of tax basis) count towards
this guideline. It is expected that this guideline is achieved within five years of the date of appointment.
C Rozes’ performance-based buyout award vested on 30 June and as a result his share interest increased by 19,215 after
accounting for shares sold to settle tax and dealing costs. There have been no other changes to any of the Directors’ share
interests between 31 May 2022 and the date of this report.
The awards to be made under the Company’s SPP in respect of the performance period ending on 31 May 2022 are not
included in this table (see page 94 for details).
Leaving arrangements for B Messer (audited)
B Messer, Chief Commercial Officer, stepped down from the Board on 22 September 2021, remaining with the Company until
the completion of her notice period on 21 January 2022 providing handover. Between 22 September 2021 and 21 January
2022, B Messer continued to receive her base salary for this period totalling £125,229. B Messer also received £19,678 for
accrued unused annual leave. B Messer also received income protection, life assurance and private medical insurance,
andherfixed benefits allowance in cash for the period with a total value of £15,027. Tax and legal assistance was also provided
to B Messer and these costs came to £35,101 (including any applicable tax costs).
B Messer was treated as a good leaver for the purposes of the SPP awards which she held in her plan account on cessation of
employment. Outstanding awards in relation to plan years up to and including FY20 will be released one-third in July 2023,
one-third in July 2024 and one-third in July 2025. Awards granted in respect of FY21 will be released in accordance with the
normal vesting schedule. B Messer was also eligible to receive a pro-rated SPP award in respect of FY22 for her period in
employment (to 21 January 2022). As noted above, the SPP in respect of FY22 vested at 94% of maximum and therefore the
total value of this pro-rated award was £913,484. This will be delivered 30% in cash and 70% in share options (which will be
released 20% of the total amount in July 2025 and 50% of the total amount in July 2026). All awards are subject to malus and
clawback provisions.
Directors’ Remuneration Report and Policy continued
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Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
B Messer is subject to our post-employment shareholding guideline and is required to retain 200% of base salary in shares
(oractual shareholding if lower) for a period of two years from stepping down from the Board.
Payments to past Directors (audited)
No payments were made to past Directors in the year.
Change in Directors’ remuneration compared to Group UK employees
The table below sets out the percentage change in remuneration for each of the Directors and UK Group employees over each
of the last two years. There are no employees in IG Group Holdings plc, and therefore we have voluntarily disclosed the change
in remuneration for UK Group employees.
FY21/FY20 FY22/FY21
Base salary
% change
Taxable benefits
% change
Performance-
related
remuneration
% change
Base salary
% change
Taxable benefits
% change
Performance-
related
remuneration
% change
Executive Directors
J Felix 1.7% -21% -2.3% 0.7% -12.9% 1.4%
C Rozes
1
– – – 0.7% -1.7% 1.4%
J Noble 1.7% 1.7% -2.3% 8.9% 7.3% 6.7%
Non-Executive Directors
M McTighe 300% – – 0.7% – –
J Moulds -39% – – 0.7% – –
R Bhasin
2
– – – 0.7% – –
A Didham 72% – – 0.7% – –
S-A Hibberd 32% -100% – 0.7% – –
Wu Gang
3
– – – 0.7% – –
M Le May -23% – – 0.7% – –
S Skerritt
4
– – – – – –
H Stevenson 614% – – 0.7% – –
Group UK employees
5
10% 10% 17% 12% 12% 33%
1 C Rozes joined the Board on 1 June 2020.
2 R Bhasin joined the Board on 6 July 2020.
3 Wu Gang joined the Board on 30 September 2020.
4 S Skerritt joined the Board on 9 July 2021.
5 Employee group consists of individuals employed by IG Index Limited the main UK employing entity as IG Holdings Group plc does not have any employees. Median employee salary,
benefits and bonus have been calculated on a full-time equivalent basis. Salary and benefits are calculated as at 31 May, bonus is that earned during the year ending 31 May.
Relative importance of spend on pay
The following table sets out the dividends and overall spend on pay over the past financial year:
2022
£m
2021
£m
Percentage
change
Dividends 186.2 159.7 16.6%
Employee remuneration costs 214.2 177. 5 20.7%
CEO to all employees pay ratio
The CEO’s total remuneration as a ratio against the full-time equivalent remuneration of UK employees is detailed in the
tablebelow:
Year Method
25th percentile
pay ratio Median pay ratio
75th percentile
pay ratio
2022 A 50:1 36:1 25:1
2021 A 55:1 40:1 29:1
2020 A 65:1 46:1 34:1
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GOVERNANCE REPORT
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The Company has calculated the ratio in line with the reporting regulations using ‘option A’ (determine total full-time equivalent
remuneration for all UK employees for the relevant financial year; rank the data and identify employees whose remuneration
places them at the 25th, 50th and 75th percentile). We have used option A as we believe it provides the most consistent and
comparable outcome. Data used to determine the pay ratios was taken as at 31 May 2022 and any part-time employees’ salary
and bonus have been pro-rated to convert them into a full-time equivalent.
Base salary
Total
remuneration
25th percentile
1
£55,700 £71,634
50th percentile
1
£70,250 £98,930
75th percentile £94,950 £139,594
1 Employees on 25th and 50th percentiles were not considered representative therefore the closest employees we considered to be representative were used.
The CEO pay ratio has been rounded to the nearest whole number. The ratios for FY22 are slightly lower than FY21 and FY20,
which reflects the increase in salaries applied to UK employees during FY22.
During the year the Board has received presentations from management on the approach to the Company’s wider policies on
employee pay, reward and progression. The Committee also reviewed year-end incentive outcomes.
Taking into account the above, the Committee believes that the CEO’s pay ratio and the year-on-year change is fair in the
context of our approach to remuneration more broadly within the organisation.
Statement of shareholder voting
The Directors’ Remuneration Policy was approved at the 2020 AGM. The Directors’ Remuneration Report for the financial year
ended 31 May 2021 was approved at the 2021 AGM. The following votes were received:
2020 Remuneration Policy
Total number of
votes (000s) % of votes cast
For
1
268,201 88.1%
Against 36,221 11. 9 %
Total 304,422 100%
Withheld 9,350 –
1 ‘For’ includes votes at the Chairman’s discretion.
2021 Annual Report on Remuneration
Total number of
votes (000s) % of votes cast
For
1
350,242 97.8%
Against 7,999 2.2%
Total 358,241 100%
Withheld 137 –
1 ‘For’ includes votes at the Chairman’s discretion.
Directors’ Remuneration Report and Policy continued
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Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Total Shareholder Return chart
This graph shows the value, by 31 May 2022, of £100 invested in the Group on 31 May 2012 compared with the value of £100
invested in the FTSE 250 Index and the FTSE 350 Financial Services Index. As the Group is a member of both of these indices,
the Committee believes it is appropriate to compare the Group’s performance against them.
400
300
200
100
0
May-12 May-13 May-14 May-15 May-16 May-17 May-18 May-19 May-20 May-21 May-22
Value (£) rebased
Source: Datastream
IG Group
FTSE 250 Index
FTSE 350 Financial Services Index
CEO earnings history
T Howkins P Hetherington J Felix
Single figure
remuneration
Annual bonus
outcome
1
LTIP/VSP/SPP
vesting
outcome
Single figure
remuneration
Annual bonus
outcome
1
LTIP/VSP/SPP
vesting
outcome
Single figure
remuneration
Annual bonus
outcome
1
LTIP/VSP/SPP
vesting
outcome
2013 1,103 47% 6% – – – – – –
2014 1,970 – 3%
2
54%
3
– – – – – –
2015 1,519 – 41% – – – – – –
2016 210 – 0% 2,641
4
– 90% – – –
2017 – – – 1,452 – 27.1% – – –
2018 – – – 2, 974 – 80% – – –
2019 – – – 777
5
– 18.64% 823
6, 7
– 18.64%
2020 – – – – – – 3,640 – 97. 2%
2021 – – – – – – 3,544 – 93.4%
2022 – – – – – – 3,577 – 94%
1 The SPP replaced the annual bonus and value-sharing plan schemes from the financial year ending 31 May 2014.
2 Relates to Value Sharing Plan (VSP) award to T Howkins.
3 Relates to SPP award to T Howkins.
4 P Hetherington was appointed CEO on 15 October 2015; prior to this he was COO. This figure includes a portion of the remuneration that he received during thisperiod.
5 P Hetherington stepped down as CEO on 26 September 2018. The figure shows salary, benefits and pension to this date. The full value of his SPP for FY19 is included in this figure.
6 P Mainwaring performed the role of acting CEO for the period between 26 September 2018 and 30 October 2018 but received no additional remuneration for this period. This figure
therefore includes one month of P Mainwaring’s compensation equating to £66k.
7 J Felix was appointed CEO on 30 October 2018; prior to this she was a Non-Executive Director on the Board. The figure excludes a portion of the remuneration that she received as a
Non-Executive Director between 1 June 2018 and 30 October 2018, which equated to £23k.
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Role of the Remuneration Committee
The Committee’s principal roles are summarised below:
¼ Make recommendations to the Board on our Senior Executive Remuneration Policy
¼ Determine an overall remuneration package for the Executive Directors in order to attract and retain high-quality Directors
capable of achieving our objectives
¼ Set and agree with the Board a competitive and transparent remuneration framework which is aligned to our strategy
and is in the interests of both the Company and its shareholders
¼ Determine the contractual terms, remuneration and other benefits for the Executive Directors, Chair and senior
management – including the Company Secretary
¼ Determine and review our Remuneration Policy, ensuring it is consistent with effective risk management, and consider
theimplications of this Remuneration Policy for risk and risk management
¼ Determine and agree the policy for the remuneration of the Company Chair and the Executive Directors
¼ Review pay, benefits and employment conditions and the remuneration trends
¼ Approve the structure of share-based awards under our employee incentive schemes, to determine each year whether
awards will be made and, if awards are made, to monitor their operation, the size of such awards and the performance
targets to be used
¼ Ensure that contractual terms on termination, and any payments made, are fair to the individual and the Group, that failure
isnot rewarded and that the duty to mitigate loss is fully recognised
¼ Receive and review reports annually directly from the risk management function on the implications of our Remuneration
Policy for risk and risk management
¼ Monitor relevant regulatory developments, including those affecting UK-listed companies and financial services firms,
toensure the Company’s Remuneration Policy and its operation is consistent with these
¼ Establish the selection criteria, appoint and set the Terms of Reference for any remuneration consultants who advise
theCommittee
The full Terms of Reference for the Committee can be found on our website, iggroup.com. To ensure the Committee discharges
its responsibilities appropriately, an annual forward calendar, linked to the Committee’s ToR, is approved by the Committee.
Main activities during the financial year
During the year, the Committee’s key activities included:
¼ Reviewing the Directors’ Remuneration Policy and the operation of the SPP
¼ Reviewing the Directors’ Remuneration Report published in the 2021 Annual Report and Accounts
¼ Reviewing the fee for the Company Chair and Executive Directors’ remuneration for the 2022 financial year
¼ Reviewing performance against targets for the 2021 SPP award, the vesting of long-term incentive plan awards and for the
determination of the bonus pool
¼ Reviewing the remuneration and bonus awards, including for senior management
¼ Reviewing the proposed targets for the 2022 financial year SPP, including agreeing the non-financial metrics
¼ Reviewing the performance of our sales incentive plans to gain assurance that their design helps promote good conduct
¼ Reviewed and agreed changes required to remuneration arrangements, processes and documentation to comply with
requirements under IFPR and IFD
¼ Reviewing remuneration-related risks, remuneration Code Staff reward outcomes and gender pay gap reporting
¼ Reviewing developments in market practice and corporate governance relating to remuneration
Membership and attendance of the Remuneration Committee
The Remuneration Committee is composed of independent Non-Executive Directors. Following the Board reorganisation there
have been a number of changes to Committee membership this year. The current members of the Committee are Helen
Stevenson (Chair), Jonathan Moulds, Sally-Ann Hibberd, Andrew Didham and Mike McTighe.
The CEO and the CFO attend the Committee meetings by invitation. The Company Chair is a member of the Committee
although the Company Chair and Executive Directors do not attend or take part when matters relating to their own
remuneration are discussed. The Chief People Officer and representatives from other areas of the business attend the
Committee meetings by invitation as appropriate to the matter under consideration.
Following each Committee meeting, a formal report is made to the Board in which the Chair of the Committee describes the
proceedings of the Committee meeting and makes recommendations to the Board as appropriate.
Directors’ Remuneration Report and Policy continued
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Shareholder and
Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Advice to the Committee
During the financial year ended 31 May 2022, the Committee consulted the CEO about remuneration matters relating to
individuals other than herself. The Chief People Officer and the Senior Reward Manager provide support to the Committee.
TheCompany Secretary is secretary to the Committee and also provided advice and support as required.
External advisers attend Committee meetings at the invitation of the Committee Chair.
The Remuneration Committee appointed Deloitte LLP (Deloitte) as advisers to the Committee in April 2019, following
acompetitive tender process.
Deloitte’s fees for advice provided to the Committee during the financial year ending 31 May 2022 were £182,800
(excludingVAT). Fees are charged on a time and material basis.
Deloitte are founding members of the Remuneration Consulting Group and are signatories to its Code of Conduct, which
requires its advice to be objective and impartial. During the year, Deloitte also provided unrelated advisory services in respect of
regulatory, risk management and tax advice, Internal Audit services and agreed-upon procedures-based assurance services.
It is the view of the Committee that the engagement team at Deloitte that provided remuneration advice to the Committee
during the year do not have connections with the Group or its Directors that may impair their independence. The Committee
reviewed the potential for conflicts of interest and judged that there were appropriate safeguards against such conflicts.
TheCommittee considers that the advice received from the advisers is independent, straightforward, relevant and appropriate,
and that it has an appropriate level of access to them and has confidence in their advice.
Committee evaluation
During the year, an evaluation of the performance of the Committee and its members was undertaken in line with the
Committee’s Terms of Reference. The evaluation process was facilitated by the Company Secretariat as part of the overall
annual Board and Committee effectiveness review.
Further information of the evaluation of the Board and its Committees and of individual Directors is given on page 70, together
with a review of the progress on actions arising from the internally run performance review undertaken during 2021.
This report was approved by the Board of Directors on 20 July 2022 and signed on its behalf by:
Helen Stevenson
Chair of the Remuneration Committee
20 July 2022
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Audit Committee Report
Andrew Didham
Chair of the
Audit Committee
Our key focus is oversight of financial
reporting and the surrounding internal
control environment.”
Andrew Didham, Chair of the
Audit Committee, gives his
review of the Committee’s
activities during the
financialyear.
Chair’s overview
I am pleased to present the Audit
Committee Report setting out the
Committee’s activities during the
year and how it has discharged its
responsibilities. The Committee has
continued to work closely with other
Board Committees, in particular the
Board Risk Committee, in respect to
relevant issues affecting more than
one Committee, including operational
risk and control developments
and strategic developments.
The acquisition of tastytrade and the
subsequent disposal of Nadex and
Small Exchange has been an area
of focus for the Committee during
FY22. The Committee has received
regular updates on the finance
integration of the tastytrade business
and in relation to the appropriate
reporting of the transactions.
During the financial year, we held a joint
meeting with the Board Risk Committee
to review and discuss matters common
to both Committees. This included
review of the Risk Acceptance Policy
and Procedure; our ICAAP, ILAA and
Recovery Plans; financial and regulatory
capital forecasts; and privileged access
management. All members of the Audit
Committee and Board Risk Committee
attended this meeting. It was agreed
that this would take place on an annual
basis going forward.
Role of the Audit Committee
The principal roles and responsibilities of
the Committee are set out in its Terms
of Reference, and include, but are not
limited to:
¼ Reviewing the clarity, completeness
and appropriateness of disclosures
inthe IGGH, IGM, IGI and IGT&I
financial statements and the context
in which statements are made,
including the Going Concern and
Viability Statement
¼ Reviewing and assessing the
controlenvironment via Internal
Auditreports
Members and attendance
FY22 key focus areas
Meeting attended Did not attend
¼ Client money and assets review
¼ tastytrade acquisition accounting
¼ Privileged access management
¼ Disposal of Nadex and Small Exchange
Andrew Didham
Chair of the Committee
Malcolm Le May
Committee member
Rakesh Bhasin
Committee member
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Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
¼ Reviewing and assessing the progress
on implementation of audit
recommendations via the Control
Action List
¼ Monitoring and reviewing the
effectiveness of our Internal Audit
function in the overall context of the
our internal controls and risk-
management systems
¼ Recommending the appointment
ofthe External Auditor and reviewing
its effectiveness, fees, terms
andindependence
¼ Monitoring the availability of
distributable profits for the purpose
of considering dividend payments
¼ Reviewing and approving our
whistleblowing arrangements
The Committee’s full Terms of
Reference are reviewed on an annual
basis and were last reviewed in May
2022. They are available on our website.
Membership and attendance
All Committee members are
independent Non-Executive Directors
who between them draw on
broadbusiness and financial
servicesexperience.
The Code requires that at least
one member of the Committee,
determined by the Board, has recent
and relevant financial experience, and
I as Committee Chair continue to fulfil
those requirements. The Committee
as a whole has competence relevant
to the sector in which we operate.
The CFO, CEO, Global Head of
Internal Audit, Company Secretary
and representatives from
PricewaterhouseCoopers LLP (PwC),
the External Auditor, attend Committee
meetings by standing invitation.
Members of senior management
from various areas of the business
attend the Committee meetings
by invitation when necessary.
The Committee has four scheduled
meetings a year and will additionally
meet if and when required.
How the Committee operates
To ensure the Committee discharges its
responsibilities appropriately, an annual
forward calendar, linked to the
Committee’s Terms of Reference and
covering key events in the financial
reporting cycle, is approved by the
Committee. The Company Secretary
and the CFO assist me in drafting the
agenda for each Committee meeting.
Following each Committee meeting,
aformal report is made to the Board
inwhich the Chair of the Committee
describes the discussions and
challenges from the Committee
meeting, and has the opportunity
toescalate any items and make
recommendations to the Board
asappropriate.
Members of the Committee also meet
separately with the Global Head of
Internal Audit and the External Auditor
to focus on their respective areas
ofresponsibility, and to discuss any
potential requirements for support
fromthe Committee to address
anyissues arising.
Main activities during the
financialyear
Financial reporting
In relation to financial reporting, the
primary role of the Committee is to
work with management and the External
Auditor in reviewing the appropriateness
of the half-year and annual Financial
Statements. The Committee
discharged its responsibilities in
this area through focusing on the
following, among other matters:
¼ Assessing the quality and
acceptability of accounting policies
and practices
¼ Ensuring disclosures are clear and
compliant with financial reporting
standards, and relevant financial and
governance reporting requirements
¼ Considering material areas in which
significant judgements and estimates
have been applied or there has been
discussion with the External Auditor
¼ Reviewing announcements and
Financial Statements prior to
issuance, including preliminary and
half-year results announcements and
recommending these to the Board
for approval
¼ Reviewing the processes to support
the assessment and determination of
the principal risks that may have an
impact on our solvency and liquidity,
before recommending and approving
the Going Concern and Viability
Statement to the Board
¼ Evaluating on behalf of the Board
whether the Annual Report and
Financial Statements, taken as
awhole, are fair, balanced and
understandable, and provide
theinformation necessary for
shareholders to assess our position
and performance, business model
and strategy
¼ Receiving a paper summarising all
statements and assurances required
of Directors in the Annual Report and
Accounts together with evidence to
support the Directors’ views and
required statements
¼ Overseeing our approach to tax
management and control
¼ Reviewing the inherent risks in
thefinancial reporting process
andsystems
¼ Reviewing and considering both audit
and non-audit services required.
To aid this review process, the
Committee has considered reports from
the CFO and his team and the Internal
and External Auditors.
The Committee considered and
discussed with management and the
External Auditor the primary areas of
judgement and disclosure in relation to
the Financial Statements for FY22,
details of which are set out on pages
104 to 109.
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Role of the Committee Discharge of responsibilities Conclusion/action taken
Going concern and long-term viability
The Directors are required to make a
statement in the Annual Report as to the
going concern and longer-term viability
of the Group.
The Committee evaluated various
reports from management that set out
the view of the Group’s going concern
and longer-term viability. These reports
detailed the impact of outcomes of
stress tests after applying multiple
scenarios to determine how we were
able to cope with deterioration in
liquidity profile or capital position.
Taking into account the assessment
bymanagement of stress-testing results
and risk appetite, the Committee agreed
to recommend the Going Concern
andViability Statement to the Board
forapproval.
Carrying value of goodwill and other intangible assets
In accordance with accounting
standards, we are required to review any
goodwill balances for impairment and
toconsider the underlying assumptions
used in determining the carrying value
ofthese assets.
In addition, we are required to assess
whether there is any indication the other
intangible assets may be impaired.
The Committee reviewed a report from
management setting out the key
assumptions used in the impairment
review of the goodwill balance and an
associated sensitivity analysis. The
Committee also considered the work
ofthe External Auditor on goodwill and
intangible assets.
An independent external valuation
agency has provided support in valuing
the US cash-generating unit as part of
the annual goodwill impairment testing.
Based on the assessment performed,
theCommittee concluded that there
should be no change to the recorded
carrying value of the goodwill and other
intangible assets.
The Committee concluded that adequate
disclosure was included within the
financial statements.
Audit Committee Report continued
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Role of the Committee Discharge of responsibilities Conclusion/action taken
Business combinations and discontinued operations
During the period, we completed the
acquisition of tastytrade and its
subsidiaries. We also completed the sale
of our 100% holding in Nadex.
We are required to properly disclose
matters relating to the acquisitions and
disposals in our financial statements.
We are required to consider whether our
accounting policies relating to business
combinations are appropriate.
The Committee reviewed various reports
from management setting out the
assumptions used to determine the fair
value of assets and liabilities acquired
with tastytrade.
The Committee reviewed a report
frommanagement relating to the
identification of assets held for sale and
the profits associated with the Nadex
discontinued operation.
The Committee reviewed the disclosures
relating to the acquisitions and disposals
during the year.
The Committee received an update
fromPwC on recent accounting
developments including findings from
the FRC Annual Review relating to
business combinations.
Based on the assessment performed, the
Committee concluded that the fair value
and useful lives of the assets acquired
were appropriate.
The Committee concluded that adequate
disclosure was included within the
financial statements.
Alternative performance measures
We are required to define any alternative
performance measures used and to
explain why they are useful or more
meaningful to describe the performance
during the period.
We are also required to reconcile them
to the closest UK-adopted International
Accounting Standards measures.
The Committee discussed the alternative
performance measures included within
the Annual Report.
The Committee received an update
fromPwC on recent accounting
developments including findings from
the FRC Annual Review relating to
alternative performance measures.
The Committee concluded that the
alternative performance measures
provided a fair representation of business
performance and position, and that
adequate disclosure was included to
reconcile them to the closest UK-adopted
International Accounting Standards
measures.
Tax provisions
Calculating the Group’s corporation tax
charge involves a degree of estimation
and judgement, as the tax treatment
ofcertain items cannot be finally
determined until resolution has been
reached with the relevant tax authority.
Where appropriate, we hold tax
provisions in respect of the potential
taxliability that may arise on these
unresolved items.
We have generated tax losses in certain
jurisdictions where we operate. We’ve
recognised deferred tax assets in
respect of these losses to the extent that
future profits have been forecast.
The Committee reviewed a report
frommanagement that detailed the
assumptions made in calculating the
Group’s corporation tax charge and
provisions. Our External Auditor also
provided commentary on this matter to
the Committee. The Committee has also
reviewed our Tax Risk Management
Policy and Tax Strategy.
The Committee concluded that the
corporation tax charge and provisions
recorded were appropriate and complete.
The Committee recommended our Tax
Risk Management Policy and Tax Strategy
to the Board for approval.
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Role of the Committee Discharge of responsibilities Conclusion/action taken
Legal entity governance
To aid with its review of corporate
governance, the Committee has
received support from the Company
Secretary, whose Legal Entity
Governance Committee has provided
some oversight over the risk-based
system for the governance, operation
and maintenance of the Group’s
legalentities.
The Committee noted the work that
hadbeen undertaken during the year
toreview legal entity governance
globally, including the development of
appropriate procedures and policies.
The establishment of a North American
Board has helped to strengthen our
Corporate Governance Framework
following the acquisition of the
tastytrade business.
Work is underway to ensure appropriate
governance arrangements are in place
across our other Regulated Entities to
support our future growth and strategy
through the creation of a new Subsidiary
Governance Framework.
The Committee was satisfied with the
progress made and the proposal to create
a new Subsidiary Governance Framework.
Control environment
Other matters addressed by the Committee included focus on the effectiveness of our control environment and
performance of our IT systems, and the Internal Audit function, including the objectivity and independence of Internal
Audit personnel. These are summarised below:
Role of the Committee Discharge of responsibilities Conclusion/action taken
Risk management and internal control
The Committee is required to assist the
Board in the annual review of the
effectiveness of our Risk Management
Framework and internal control systems
The Committee received a report from
the Board Risk Committee including an
assessment of those risks that might
threaten our business model, future
performance, solvency or liquidity.
It considered and challenged
management on the overall
effectiveness of the Risk Management
Framework and internal control systems.
Particular focus was given by the
Committee to the control environment
in respect of corporate actions, following
the significant growth in the number of
clients serviced by the Stock Trading and
Investments business, and privileged
access management.
The Committee reviewed the relevant
disclosures within the Accountability
section of the Governance Report within
the Annual Report.
The Committee agreed to recommend to
the Board the Annual Report statements
relating to the effectiveness of the Risk
Management Framework and internal
control systems.
The Committee has received regular
updates from management regarding the
positive progress made in these areas to
address identified areas for improvement
against the agreed action plans.
Audit Committee Report continued
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Role of the Committee Discharge of responsibilities Conclusion/action taken
Internal Audit
The Committee is required to oversee
the performance, resourcing and
effectiveness of the Internal Audit
function.
The Committee monitored and
reviewedthe effectiveness of our
Internal Audit function in the overall
context of our internal controls and
riskmanagement systems.
It reviewed and assessed the risk-based
Internal Audit plan.
It reviewed and monitored
management’s responsiveness to the
findings of the Internal Audit function.
It monitored the consolidated Control
Action List, noting themes arising,
andreviewed the effectiveness of
thefunction.
The Committee received all Internal
Audit reports and, in addition, received
summary reports on the results of the
work of the Internal Audit function on
aperiodic basis.
The Committee reviewed additional
Internal Audit reports, not forming part
of the annual plan.
It reviewed the performance of the
Internal Audit function against the plan
and an assessment of the effectiveness
of the Internal Audit function.
The priorities for the Internal Audit
function were considered.
The Committee reviewed the resourcing
and effectiveness of the Internal Audit
function and approved the risk-based
audit plan.
The Internal Audit function supports
thework of the Committee.
The Internal Audit function remains
effective and has implemented the
appropriate processes to ensure this.
Thefunction has sufficient resources
todeliver the proposed plan.
The function continues to be efficient,
with robust processes.
Whistleblowing
The Committee considers the adequacy
of our arrangements by which
employees may in confidence raise
concerns about improprieties in matters
of financial reporting or other matters.
The Committee reviewed our
Whistleblowing Policy to ensure that it
remained fit for our needs.
The Committee decided that the
Whistleblowing Policy remained fit
forpurpose.
The Committee concluded that
whistleblowing processes were operating
effectively during the period under
review.All employees acknowledged their
understanding of the policy and additional
training is also being rolled out.
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Role of the Committee Discharge of responsibilities Conclusion/action taken
Client money and assets
The Committee has a responsibility for
overseeing our systems and controls
relating to the holding and management
of client money and assets.
The Committee monitored the
effectiveness of the control environment
relating to client money and assets and
received an annual report on the
operation of the Client Money and
Assets Committee.
The Committee also considered the
report from the External Auditor on
theclient money control environment
and operations.
The Committee further received regular
reports on the control environment of
corporate actions.
The Committee reviewed the control
environment at both Group and
entitylevel.
The Committee considered that the
control environment remained effective.
Role of the Committee Discharge of responsibilities Conclusion/action taken
Oversight of external audit
The Committee is required to oversee
the work and performance of PwC
asExternal Auditor, including the
maintenance of audit quality during
theperiod.
The Committee met with the key
members of the PwC audit team to
discuss the FY22 audit plan and areas
offocus. This included the valuation
oftastytrade.
It assessed regular reports from PwC on
the progress of the FY22 audit and any
material issues identified.
It debated the draft audit opinion ahead
of the FY22 year-end. The Committee
was also briefed by PwC on critical
accounting estimates, where significant
judgement was needed.
The Committee approved the audit plan
and the main areas of focus, including the
potential risk of management override of
controls and the valuation of customer
relationships and assessment of the
carrying value of the tastytrade cash-
generating unit.
More information on the Committee’s
rolein assessing the performance,
effectiveness and independence of the
External Auditor and the quality of the
external audit can be found on page 109.
Audit and audit-related fees
Audit-related fees include those related
to the statutory audit of the Group and
its subsidiaries, as well as audits required
due to the regulated nature of our
business. Also included are fees
associated with testing of controls
relating to our processes and controls
over client money and asset segregation.
During the year, the Committee
reviewed and approved a
recommendation from management
on the Company’s audit and audit-
related fees.
The Committee considers the FY22 audit
and audit-related fees to be appropriate
given the change in complexity of the
Group structure. A breakdown of audit
and non-audit related fees is in note 5 to
the Financial Statements on page 150.
Audit Committee Report continued
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Role of the Committee Discharge of responsibilities Conclusion/action taken
Non-audit services and fees
To prevent the objectivity and
independence of the External Auditor
from becoming compromised, the
Committee has a formal policy
governing the engagement of the
External Auditor to provide non-audit
services. The policy is reviewed on an
annual basis. The Committee reviewed
our policy governing non-audit work
against details of regulations on the
statutory audit of public interest entities.
The Committee reviewed and approved
all arrangements for non-audit fees.
Fees in relation to permitted services
below £0.05 million are deemed pre-
approved by the Committee and are
subject to the approval of the CFO.
Feesabove £0.05 million must be
approved by the Committee, through
the Committee Chair.
The Committee also requested and
received an explanation from PwC of its
own in-house independence process.
The Committee ensured there were
noexceptions to fee limits and approval
processes, per the policy, during
theyear.
During the year, non-audit fees of £0.3
million were paid to PwC, as discussed in
note 5 to the Financial Statements.
Effectiveness of the External Auditor
In assessing the effectiveness and independence of the External Auditor, the Committee considered relevant professional and
regulatory requirements and the relationship with the External Auditor as a whole. The Committee monitored the External
Auditor’s compliance with relevant regulatory, ethical and professional guidance on the rotation of partners, and assessed its
qualifications, expertise, resources, and quality of people and service provided, including a report from the External Auditor on
its own internal quality procedures and independence.
As part of the assessment, a questionnaire was completed by our key stakeholders. The questionnaire addressed matters
including the External Auditor’s independence, objectivity, the quality of planning and execution of the audit, insights and added
value and general support and communication to the Committee and management. The results were analysed, and a report
was presented to the Committee.
The Committee assessed the robustness of the audit process, specifically how the auditor challenged management’s key
assumptions and demonstrated professional scepticism, through discussion with the audit partner, by reviewing PwC’s findings
on areas which required management judgement and in considering the quality and depth of the auditor’s observations
andchallenge.
Following the review of the effectiveness of the External Auditor, the external audit process and an assessment of the External
Auditor’s independence and objectivity, the Committee recommends the reappointment of PwC to the Board for approval by
shareholders at the Company’s 2022 AGM.
There are no contractual obligations restricting choice of External Auditor.
Committee evaluation
During the year, an evaluation of the performance of the Committee was undertaken in line with the Committee’s Terms of
Reference. Further information of the evaluation of the Board and its Committees is given on page 70.
Andrew Didham
Chair of the Audit Committee
20 July 2022
110
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Sally-Ann Hibberd, Chair of the
ESG Committee, highlights
some of the Committee’s key
activities during the year.
Chair’s overview
The ESG Committee has an important
role in providing oversight on behalf
of, and advice to, the Board in relation
to our ESG strategy and activities. The
Board established the Committee
in 2020 and, in the Spencer Stuart
2021 UK Board Index, was recognised
as one of six FTSE 150 companies
with such a Committee. During its
second year of operation it has taken
significant steps to ensure principles of
responsible and sustainable business
are formally embedded across the
business. We are particularly proud
to have started a review of the ESG
impacts of our entire suite of products,
and a project developing new tools
to identify and support vulnerable
clients. These link to what we recognise
as two of the most material ESG
risks posed by our business. We are
also proud to have recommended
a new Financial Education Strategy,
an expression of our value to learn
fast together, and a significant step
towards ensuring that we truly exist
for every ambitious person.
The Committee has worked closely with
our COO, the executive accountable
for ESG, as well as our Group Head of
ESG. At each meeting, the Committee
reviews progress against agreed
metrics under each of the four pillars
of the ESG strategy – Products, People,
Partnerships and Best Practice. The
Committee has continued to consider
the ability of our ESG strategy to
reflect our purpose and values.
ESG Committee Report
Substantial progress has been made to
embed ESG considerations in everything
we do, in line with our purpose, culture
andvalues.”
Members and attendance
Where Directors were unable to attend meetings, they gave the Chair their views
in advance on the matters to be discussed.
FY22 key focus areas
Meeting attended
1 Unable to attend one Committee meeting due to illness.
2 Unable to attend one Committee meeting due to a prior commitment.
Did not attend
¼ Commissioned a review of our
products to better understand their
ESG impacts. This project is ongoing
and will be progressed throughout
FY23
¼ Commissioned a project to develop
a data science driven process for
identifying and supporting
vulnerable clients. This project is
ongoing and will be progressed
throughout FY23
¼ Recommended to the Board our
Financial Education strategy
¼ Recommended to the Board our
Equality, Diversity and Inclusion
strategy
¼ Oversaw ESG-related disclosures
including those under the TCFD
recommendations
¼ Sought and received insights and
feedback from key stakeholders
including shareholders to better
understand their ESG priorities
¼ Recommended that we pledge 1%
of our prior-year post-tax profits to
charitable causes through the
Brighter Future Fund
Sally-Ann Hibberd
Chair of the Committee
Helen Stevenson
2
Committee member
Rakesh Bhasin
Committee member
Malcolm Le May
1
Committee member
Sally-Ann Hibberd
Chair of the
ESGCommittee
111
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IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Furthermore, the Committee has also
continued to focus on challenging
andsupporting us in relation to our
charitable outreach through Brighter
Future initiatives (see page 32 for
moreinformation). In this area, we are
particularly proud to have overseen a
significant increase in the number of
young people benefiting from our
Brighter Future Fund initiatives, from
22,284 in FY21, to 94,751 in FY22
(seepage 26 for more information).
Role of the ESG Committee
The principal roles and responsibilities of
the Committee include:
¼ Oversight of our ESG strategy
¼ Monitoring and reviewing how the
ESG strategy is received and
regarded by our stakeholders
¼ Overseeing how all elements of the
ESG strategy are reported externally
¼ Ensuring that there are appropriate
policies in place to effectively support
the ESG framework
¼ Assisting on other matters related
toESG as may be referred to it by
theBoard
The Terms of Reference of the
Committee, which were last reviewed in
May 2022, are available on our website.
Membership and attendance
The Committee consists entirely of
independent Non-Executive Directors
and meets on a quarterly basis. The
Committee met four times during
theyear.
The Board Chair, CEO, COO, ESG
Manager, Chief People Officer and Chief
Risk Officer are standing attendees of
the Committee. Representatives from
other areas of the business attend the
Committee meetings by invitation,
asrequired.
How the Committee operates
To ensure the Committee discharges
itsresponsibilities appropriately, an
annual forward calendar, linked to the
Committee’s Terms of Reference is
approved by the Committee. The
Company Secretary, COO and ESG
Manager assist the Chair of the
Committee in drafting the agenda for
each Committee meeting.
Following each Committee meeting,
aformal report is made to the Board
inwhich the Chair of the Committee
describes the discussions and
challenges from the Committee
meeting, and has the opportunity
toescalate any items and make
recommendations to the Board
asappropriate.
Work undertaken during the
financial year
During the year, the Committee
undertook a number of significant
activities.
It has reviewed and monitored the
implementation of our ESG strategy,
aswell as targets, key performance
indicators, its budget and third-party
partnerships. It has also considered
whether the Group maintains
appropriate policies in order to
effectively support its ESG framework.
The first Internal Audit review of ESG
was undertaken during the year at the
Committee’s request. The review
concluded that the Committee was
operating effectively. Unsurprisingly,
given the Committee’s recent formation,
there are a number of areas to work on.
Continued focus will remain on ensuring
Committee members are kept up to
date with best practice, acknowledging
the area of ESG is rapidly evolving across
the world. All Directors have received
TCFD training during the year.
As we embed principles of ESG across
all business activities, the Committee
recognised the importance of ensuring
ESG risks are fully integrated into the
Risk Management Frameworks. To fully
understand these risks, the Committee
sought input from third-party providers.
Committee evaluation
During the year, an evaluation of the
performance of the Committee was
undertaken in line with the Committee’s
Terms of Reference. Further information
of the evaluation of the Board and its
Committees is given on page 70.
Sally-Ann Hibberd
Chair of the ESG Committee
20 July 2022
112
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IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Jonathan Moulds, Chair of the
Board Risk Committee, gives
his review of the Committee’s
activities during the
financialyear.
Chair’s overview
The Committee has continued to focus
on providing oversight and advice to
the Board in relation to our current
and potential future risk exposures,
including risks to the achievement
of our strategy. The Committee’s
agenda reflects the importance of
reviewing the key actual and emerging
risks faced by the business.
During the year, we have continued
to demonstrate the robustness of our
Risk Management Framework. Again,
we have faced significant turmoil and
heightened risks, including interest
rate rises, geopolitical instability and
the ongoing impact and after-effects
of the global Covid-19 pandemic. We
continue to adapt to changes in the
regulatory landscape, ranging from
the introduction of a Consumer Duty
in the UK, to monitoring developments
regarding Payment for Order Flow
in the US. Our focus on good client
outcomes, resilience and our control
infrastructure means we have seen
limited manifestation of risk, which
would be considered out of keeping
with the volume of business seen.
We have considered in detail the risks
around the integration of tastytrade.
This has included focusing on
implementation of a new operational risk
system to align and embed tastytrade
into our Risk Management Framework.
The Risk function, headed by the Chief
Risk Officer, seeks to ensure a holistic
approach to risk management is
embedded, including through clear
linking of risk reporting to the key risks
facing the business, through the Risk
Taxonomy and Key Risk Indicators, in line
with our Risk Appetite Statement and
Risk Management Framework. The
Committee reviews this framework on
an annual and continuous basis.
The operational risk management
systems continue to be developed and
further embedded into the business,
Board Risk Committee Report
During the year, we have continued to
demonstrate the robustness of our Risk
Management Framework.”
Members and attendance
FY22 key focus areas
Meeting attended
1 Appointed to the Committee on 10 November 2021.
Did not attend
¼ Undertook a detailed evaluation of
the risks and controls around the
integration of tastytrade
¼ Continued to embed the
operational risk framework, assisted
by an ongoing upgrade in risk
management tools. The operational
risk strategy aligns with the business
in FY23 with more focus on
localised ownership of risk
management across all entities
¼ Reviewed our Financial Crime
Framework and associated controls
¼ Developed a strategy for the
enhanced identification of clients
displaying traits of vulnerability,
together with support and
intervention mechanisms
¼ Oversaw the implementation of the
new IFPR in Europe and the UK,
including preparatory work for the
associated new Internal Capital and
Risk Assessment (ICARA)
¼ Monitored closely the associated
risks related to market volatility,
people and business continuity
relating to the war in Ukraine
Jonathan Moulds
Chair of the Committee
Wu Gang
Committee member
Sally-Ann Hibberd
Committee member
Andrew Didham
Committee member
Susan Skerritt
1
Committee member
Jonathan Moulds
Chair of the Board Risk
Committee
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IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
with strong stakeholder engagement
that encourages a culture of event
reporting. The Operational Risk team
has adapted its approach to assist
and coach first-line functions in root-
cause analysis relating to events,
enabling improvements to design and
implementation of controls. Operational
risk reports are regularly provided to
related management committees, such
as the Executive Risk Committee and the
Client Money and Assets Committee.
This year’s annual Non-Executive
Director Risk Workshop, as previously,
provided active oversight of, and input
into, our regulatory capital calculations,
as set out in our ICAAP and ILAA. It also
covered the stress testing of our risks,
and our capital and liquidity held against
those, as well as our reverse stress-test
Recovery Plans.
The Compliance function, headed by the
Chief Compliance Officer, has provided
the Committee with regular reporting
of second-line compliance assurance
activity, details of regulatory change and
the assessment of key financial crime
controls, with a focus on the detection
and prevention of market abuse.
Cyber threats remain a significant
issue for the financial sector and the
Committee continues to support the
Chief Information Security Officer
in ensuring we manage our risks
appropriately. Ransomware attacks
have been a particular hot topic
across the industry, with trends
indicating attacks on the increase.
The Committee has sponsored
focused work to be conducted
during 2022 to test our technical,
people and process cyber capabilities
to ensure they work in unison.
Reporting from Internal Audit has
focused on the ongoing state of the Risk
Management Framework – particularly
the development of the operational risk
framework, as well as our current and
potential risk exposures.
During the year, we held a joint meeting
with the Audit Committee to review and
discuss matters common to both
Committees. This included review of the
Risk Acceptance Policy and Procedure;
our ICAAP, ILAA and Recovery Plans;
financial and regulatory capital
forecasts; and privileged access
management. All members of the Audit
Committee and Board Risk Committee
attended this meeting. It was agreed
that this would take place on an annual
basis going forward.
Role of the Board Risk Committee
The Committee provides oversight
andadvice to the Board in relation to
ourcurrent and potential future risk
exposures and future risk strategy.
Thisincludes the determination
of riskappetite and tolerance,
consideringthecurrent and prospective
macroeconomic and financial
environment. Key responsibilities
of the Committee, in addition to
those noted above, include:
¼ Reviewing the design and
implementation of our general
RiskManagement Policy and
measurement strategies
¼ Considering and regularly reviewing
our risk profile relative to current and
future strategy and risk appetite,
identifying any risk trends, material
regulatory changes, concentrations
or exposures and any requirement for
policy change
¼ Carrying out a robust assessment
ofour emerging and principal risks
¼ Considering our ILAA, ICAAP (to be
replaced with ICARA going forwards),
and Recovery Plans
¼ Considering the scope and nature
ofthe work undertaken by the Risk
Management and the control
functions in analysing, monitoring
and reporting of risks forming part
ofour Risk Taxonomy
¼ Providing advice to the Remuneration
Committee on the alignment of the
Remuneration Policy to risk appetite
and annually reviewing remuneration-
related risks
¼ Recommending to the Board the
appointment and, when and if
appropriate, replacement of the
Chief Risk Officer and Chief
Compliance Officer.
The Terms of Reference for the
Committee were last reviewed in May
2022 and are available on our website.
Membership and attendance
The Committee is composed of five
independent Non-Executive Directors.
The Terms of Reference require the
Committee to meet at least four
times a year and additionally as
required. During the financial year the
Committee met five times. As well as
making decisions in its own right, the
Committee makes recommendations
to the Board and, where relevant,
to other Board Committees. The
business of the Committee is reported
at the following Board meeting.
The Executive Directors, the Company
Secretary, the Chief Risk Officer, Chief
Compliance Officer and the Global Head
of Internal Audit attend Committee
meetings as standing attendees.
Representatives from other areas of the
business attend the Committee
meetings by invitation, as required.
How the Committee operates
To ensure the Committee discharges
itsresponsibilities appropriately, an
annual forward calendar, linked to the
Committee’s Terms of Reference, is
approved by the Committee. The
Company Secretary and the Chief
RiskOfficer assist the Chair of the
Committee in drafting the agenda for
each Committee meeting.
Following each Committee meeting,
aformal report is made to the Board
inwhich the Chair of the Committee
describes the discussions and
challenges from the Committee
meeting, and has the opportunity
toescalate any items and make
recommendations to the Board
asappropriate.
114
GOVERNANCE REPORT
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Main activities during the
financialyear
During the year, the Committee’s key
activities included:
¼ Reviewing the Risk Appetite
Statement, Risk Taxonomy, Risk
Management Framework and
Compliance Framework
¼ Considering current and emerging
risks facing the business,
includingregulatory change,
theCovid-19 pandemic and the
Russia/Ukraine conflict
¼ Undertaking an evaluation of
tastytrade’s risk profile and
associated integration with the
Group’s Risk Management
Framework
¼ Reviewing the adequacy of our global
insurance cover
¼ Reviewing Product Governance
¼ Reviewing our Financial Crime
Framework
¼ Reviewing and challenging
operational risk development
¼ Reviewing IT and cyber security in
relation to the annual technology
riskreview
¼ Undertaking a formal annual
compliance assessment of material
breaches
¼ Reviewing a culture risk dashboard
and report covering client outcomes,
IT, regulatory outcomes, people
outcomes and conduct more broadly
¼ Reviewing our capital and liquidity
position including through the ICAAP,
ILAA and the Recovery Plans
¼ Overseeing the implementation of
the new IFPR in Europe and the UK,
including preparatory work for ICARA
¼ Receiving reports from Internal Audit
on the Risk Management Framework
¼ Developing a strategy for the
enhanced identification of clients
displaying traits of vulnerability,
together with support and
intervention mechanisms.
Committee evaluation
During the year, an evaluation of the
performance of the Committee was
undertaken in line with the Committee’s
Terms of Reference. Further information
of the evaluation of the Board and its
Committees is given on page 70.
Jonathan Moulds
Chair of the Board Risk Committee
20 July 2022
Board Risk Committee Report continued
115
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
£178.3million). Dividends are recognised
in the Financial Statements for the year
in which they are paid or, in the case of
afinal dividend, when approved by the
shareholders. The amount recognised in
the Financial Statements, as described
in note 11, includes this financial year’s
interim dividend and the final dividend
from the previous year, both of which
were paid.
The final ordinary dividend, if approved,
will be paid on 20 October 2022 to
those shareholders on the register as at
23 September 2022.
Certain nominee companies
representing our Employee Benefit
Trusts hold shares in the Company, in
connection with the operation of the
Company’s share plans. Evergreen
dividend waivers remain in place on
shares held by them that have not been
allocated to employees.
Articles of Association
The Company’s Articles of Association
are available on our website, or by
writing to the Company Secretary at the
Group’s registered office. The Articles of
Association were last amended by
shareholders by means of a special
resolution on 22 September 2021.
Board of Directors and their
interests
The Directors who held office during
FY22 are set out below:
Chair
Mike McTighe
Independent Non-Executive
Directors
Jonathan Moulds
Rakesh Bhasin
Andrew Didham
Wu Gang
Sally-Ann Hibberd
Malcolm Le May
Lisa Pollina – stepped down from the
Board on 9 July 2021
Susan Skerritt – appointed on 9 July2021
Helen Stevenson
In line with the IFPR and the Capital
Requirements (Country-by-Country
Reporting) Regulations 2013, requiring
credit institutions and investment firms
to publish annually certain tax and
financial data for each country where
they operate, the Group’s UK-regulated
subsidiaries will make available their
country-by-country reporting on
ourwebsite.
Disclosures required pursuant to
Listing Rule 9.8.4R
In compliance with the UK FCA’s Listing
Rules, the information in Listing Rule
9.8.4R to be included in the Annual
Report and Accounts, where applicable,
can be found on the following pages:
Detail Page
Waiver of dividends 115
Modern slavery
In compliance with Section 4 (I) of the
Modern Slavery Act 2015, the Group
haspublished its slavery and human
trafficking statement on our website.
Branch offices
We have the following overseas
branches within the meaning of the
CA2006: offices in Australia, China
(Representative Office), France,
Germany, Hong Kong, Ireland, Italy,
NewZealand, the Netherlands, Norway,
Poland, South Africa, Spain and Sweden.
Corporate Governance Statement
In compliance with the UK FCA’s
Disclosure Guidance and Transparency
Rules (DTR) 7.2.1, the disclosures
required by the DTR are set out in
thisDirectors’ Report and in the
Governance Report.
Profit and dividends
The Group’s statutory profit for the year
after taxation amounted to £503.9
million (2021: £371.9 million), all of which
is attributable to the equity members of
the Company.
The Directors recommend a final
ordinary dividend of 31.24 pence per
share, amounting to £134.8 million,
making a total of 44.2 pence per share
and £190.7 million for the year
(2021:43.2 pence per share and
Directors’ Report
The Directors present their report,
together with the Group Financial
Statements, for FY22. The Directors’
Report comprises pages 115 to 117 of
this report, together with the sections of
the Annual Report incorporated by
reference as set out below:
Contents Page
Governance Report
56-
118
Statement of Directors’
Responsibilities 118
Financial instruments
167-
169
Greenhouse gas emissions 33
Workforce engagement,
communication and equal
opportunities
30–
31
Employees, Customers, Suppliers
and Others Reporting
Requirements Under the
Companies (Miscellaneous
Reporting) Regulations 2018
22–
23
Policy concerning the
employment of disabled persons
30-
31
Going Concern and Viability
Statement
54-
55
Directors’ Remuneration Report
and Policy, service contracts and
details of Directors’ interest in
shares
79-
101
Likely future developments
12-
13
Risk management and internal
control
46-
53
Anti-bribery and corruption 35
Section 414A of the CA2006 requires
the Directors to present a Strategic
Report in the Annual Report and
Financial Statements. Theinformation
can be found on pages10 to 55.
The Company has chosen, in
accordance with Section 414C (11)
ofthe CA2006 and as noted in this
Directors’ Report, to include certain
matters in its Strategic Report that
would otherwise be disclosed in this
Directors’ Report, including the Non-
Financial Information Statement
required by Section 414C of the
CA2006, which can be found on
page28.
Directors’ Report
116
GOVERNANCE REPORT
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Executive Directors
June Felix
Bridget Messer – stepped down from
the Board on 22 September 2021
Jon Noble
Charlie Rozes
Appointment and retirement
ofDirectors
The rules concerning the appointment
and replacement of Directors are set out
in the Articles of Association. The Board
has the power to appoint any person
as a Director to fill a casual vacancy
or as an additional Director, provided
the total number of Directors does
not exceed the maximum prescribed
in the Articles of Association. Any
such Director holds office only until
the next AGM and is then eligible
to offer themselves for election.
The Articles of Association also require
that all those Directors who have been
inoffice at the time of the two previous
AGMs, and who did not retire at either
ofthem, must retire as Directors by
rotation. Such Directors are eligible to
stand for re-election. However, in line
with the Code’s recommendation, all
Directors will stand for re-election at the
2022 AGM.
Directors’ conflicts of interest
In accordance with the CA2006, all
Directors must disclose both the nature
and extent of any potential, actual or
perceived conflicts with the interests of
the Company. We explain the procedure
for this on page 69.
Insurance and indemnities
The Group has Directors’ and Officers’
liability insurance in place, providing
appropriate cover for any legal action
brought against its Directors. Qualifying
third-party indemnity provisions (as
defined by Section 234 of the CA2006)
were in force during FY22 and a Deed of
Indemnity with the Directors was put in
place. These provisions remain in force
for the benefit of the Directors, in
relation to certain losses and liabilities
which they may incur (or have incurred)
to third parties in the course of acting as
Directors of the Company.
Research and development
In the ordinary course of business,
weregularly develop new products
andservices.
Political donations
The Company made no political
donations to political organisations or
independent election candidates and
incurred no political expenditure in the
year (2021: £nil).
Share capital
The Company has three classes of
shares: ordinary shares, deferred
redeemable shares and preference
shares. As at 31 May 2022, our issued
shares comprised 431,299,455 ordinary
shares of 0.005 pence each
(representing 99.98% of the total issued
share capital), 65,000 deferred
redeemable shares of 0.001 pence each
(representing 0.01% of the total issued
share capital) and 40,000 preference
shares of £1.00 each (representing
0.01% of the total issued share capital).
Details of movement in our share capital
and rights attached to the issued shares
are given in note 23 to the Financial
Statements. Information about the rights
attached to our shares can also be found
in the Articles of Association. Details of
the Group’s required regulatory capital
are disclosed in the Business
Performance Review on page 45.
Variation of rights
Subject to the provisions of applicable
statutes, the rights attached to any class
of shares may be varied, either with the
consent in writing of the holders of at
least three-quarters in nominal value of
the issued shares of that class, or with
the sanction of a special resolution
passed at a separate meeting of the
holders of the shares of that class.
Restrictions on transfer of
securities
There are no specific restrictions on the
transfer of securities in the Company,
other than as contained in the Articles of
Association, this paragraph and certain
laws or regulations, such as those related
to insider trading, which may be imposed
from time to time. The Directors and
certain employees are required to obtain
approval prior to dealing in the
Company’s securities. Certain parties
who were previously shareholders in
tastytrade are subject to contractual
restrictions on transfer in accordance
with the terms of the sale arrangements.
We are not aware of any agreements
between holders of securities that may
result in restrictions on the transfer of
securities or on voting rights.
Exercise of rights of shares in
employee share schemes
The trustees of the IG Group Employee
Benefit Trusts do not seek to exercise
voting rights on shares held in the
employee trusts, other than on the
direction of the underlying beneficiaries.
No voting rights are exercised in relation
to shares unallocated to individual
beneficiaries. The trustees have a
dividend waiver in place in respect of
unallocated shares held in the trust.
Powers of the Directors to issue or
purchase the Company’s shares
The Articles of Association permit the
Directors to issue or repurchase the
Company’s own shares, subject to
obtaining shareholders’ prior approval.
The shareholders gave this approval at
the 2021 AGM. The authority to issue or
buy back shares will expire at the 2022
AGM, and it will be proposed at the
meeting that the Directors be granted
new authorities to issue or buyback
shares. The Directors currently have
authority to purchase up to 43,157,445 of
the Company’s ordinary shares. No
ordinary shares were purchased during
the year.
During the year, 61,000,000 ordinary
shares with an aggregate nominal value
of £3,050.00 were issued as part of
the consideration for the acquisition of
tastytrade. Furthermore, the Company
instructed the trustees of the Employee
Benefit Trusts to purchase shares
in order to satisfy awards under our
share-incentive plan schemes and
also issued shares in respect of the
sustained performance plan. Details
of the shares held by our Employee
Benefit Trusts, and the amounts paid
during the year, are disclosed in note
24 to the Financial Statements.
At the AGM held on 22 September 2021,
the Company was granted authority to
allot ordinary shares in the Company up
to an aggregate nominal amount of
£7,000, being 33% of the total issued
share capital at that date, amounting to
142,419,570 ordinary shares. In addition,
the Company was granted authority to
allot further ordinary shares in the
Company up to an aggregate nominal
amount of £7,000 pursuant to a rights
issue, being 33% of the total issued share
capital at that date, amounting to
142,419,570 ordinary shares. No ordinary
shares were issued under these
authorities during the year.
Directors’ Report continued
117
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Major interest in shares
Information provided to the Company by major shareholders pursuant to the FCA and DTRs is published via a Regulatory
Information Service and is available on our website. The information in the table below has been received in accordance with
information made available to the Company and in accordance with DTR5, from holders of notifiable interests in the Company’s
issued share capital as at 31 May 2022. The lowest threshold is 3% of the Company’s voting rights, and holders are not required
to notify us of any change until this, or the next applicable threshold, is reached or crossed.
31 May 2022
Major interest inshares No. of shares Percentage
Artemis Investment Management LLP 25,617,216 5.94%
BlackRock (Index) 24,677,604 5.72%
MFS Investment Management 24,966,339 5.78%
Massachusetts Financial Services Company 21,530,650 4.98%
The Vanguard Group, Inc. 17,100,088 3.96%
Tom Sosnoff 15,996,740 3.71%
M&G 11, 983 ,351 2.78%
Schroder 12,321,485 2.86%
Royal London Asset Management 10,718,335 2.48%
Subsequent to the year end, on 1 July 2022, the Company was notified that Massachusetts Financial Services Company now
holds 21,612,131 shares representing 5.00% of the Company’s voting rights. The Company has not been informed of any other
changes to the notifiable interests between 31 May 2022 and the date of this Annual Report.
Change of control
Following any future change of control of the Company, participating lenders in the Group’s bank facility agreements have the
option to cancel their commitment. Upon such cancellation, any outstanding loans, including accrued interest and other
amounts due to lenders, will become immediately due and payable. Further details may be found in note 18 to the Financial
Statements.
There are no agreements between the Company and its Directors or employees providing for compensation on any loss of
office or employment that occurs because of a takeover bid. However, options and awards granted to employees under our
share schemes and plans may vest on a takeover, under the schemes’ provisions.
AGM
The Company’s AGM will be held on 21 September 2022. Details of the resolutions to be proposed will be provided in the Notice
of AGM.
Independent Auditors
Resolutions to reappoint PwC as the Company’s External Auditor, and to authorise the Directors to determine PwC’s
remuneration, will be put to shareholders at the AGM on 21 September 2022.
Subsequent events
Please refer to note 34 to the Financial Statements.
On behalf of the Board.
Charles A Rozes
Chief Financial Officer
20 July 2022
118
GOVERNANCE REPORT
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
In the case of each Director in office at
the date the Directors’ Report is
approved:
¼ So far as the Director is aware, there
is no relevant audit information of
which the Group’s and Company’s
Auditor are unaware
¼ 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 are aware
ofthat information
On behalf of the Board.
June Felix
Chief Executive Officer
20 July 2022
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 FY22
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 115
to116 confirm that, to the best of
theirknowledge:
¼ 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
¼ 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
The Directors are responsible for
preparing the FY22 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:
¼ Select suitable accounting policies
and then apply them consistently
¼ State whether applicable UK-adopted
International Accounting Standards
have been followed, subject to any
material departures disclosed and
explained in the Financial Statements
¼ Make judgements and accounting
estimates that are reasonable
andprudent
¼ 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.
Statement of Directors’ Responsibilities
in respect of the Financial Statements
119
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Report on the audit of the Financial Statements
Opinion
In our opinion, IG Group Holdings plc’s Group Financial Statements and Company Financial Statements (the “Financial
Statements”):
¼ give a true and fair view of the state of the Group’s and of the Company’s affairs as at 31 May 2022 and of the Group’s profit
and the Group’s and Company’s cash flows for the year then ended;
¼ have been properly prepared in accordance with UK-adopted international accounting standards; and
¼ have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the Financial Statements, included within the Annual Report, which comprise: the Consolidated and Company
Statements of Financial Position as at 31 May 2022; the Consolidated Income Statement, the Consolidated Statement of
Comprehensive Income, the Consolidated and Company Statements of Changes in Equity and Consolidated and Company
Statements of Cash Flows for the year then ended; and the notes to the Financial Statements, which include a description of the
significant accounting policies.
Our opinion is consistent with our reporting to the Audit Committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our
responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the Financial Statements
section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
We remained independent of the Group in accordance with the ethical requirements that are relevant to our audit of the
Financial Statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed public interest entities, and we
have fulfilled our other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were not
provided.
Other than those disclosed in note 5, we have provided no non-audit services to the Company or its controlled undertakings in
the period under audit.
Our audit approach
This was the second year that it has been my responsibility to form this opinion on behalf of PricewaterhouseCoopers LLP
(“PwC”), who you first appointed on 8 December 2010 in relation to that year’s audit. In addition to forming this opinion, in this
report we have also provided information on how we approached the audit, how it changed from the previous year and details
of the significant discussions that we had with the Audit Committee.
Key audit matters
¼ Fair value of customer relationships recognised on the acquisition of tastytrade, Inc. (Group)
¼ Estimation of the recoverable amount of the cash generating unit – tastytrade, Inc. (Group)
¼ OTC derivative revenue (Group)
¼ Carrying value of the investments in subsidiaries (Company)
Materiality
¼ Overall Group materiality: £23,800,000 (2021: £22,500,000) based on 5% of adjusted profit before tax.
¼ Overall Company materiality: £17,600,000 (2021: £7,600,000) based on 1% of total assets.
¼ Performance materiality: £17,800,000 (2021: £16,900,000) (Group) and £13,200,000 (2021: £5,700,000) (Company).
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the Financial
Statements.
Independent Auditors’ Report
to the Members of IG Group Holdings plc
120
GOVERNANCE REPORT
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the
Financial Statements of the current period and include the most significant assessed risks of material misstatement (whether or
not due to fraud) identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the
allocation of resources in the audit; and directing the efforts of the engagement team. These matters, and any comments we
make on the results of our procedures thereon, were addressed in the context of our audit of the Financial Statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
Fair value of customer relationships recognised on the acquisition of tastytrade, Inc., Estimation of the recoverable amount of
the cash generating unit – tastytrade, Inc. and Carrying value of the investments in subsidiaries are new key audit matters this
year. Impact of Covid-19 (Group and Company), which was a key audit matter last year, is no longer included because the impact
of Covid-19 on the operations of the Group and the Company have lessened in the current year. Otherwise, the key audit
matters below are consistent with last year.
Key audit matter How our audit addressed the key audit matter
Fair value of customer relationships recognised on the
acquisition of tastytrade, Inc. (Group)
The Group acquired tastytrade, Inc. on 28 June 2021 for total
consideration of £723mn. On acquisition customer
relationships and other intangible assets totalling £260mn
were recorded.
The valuation of the intangible assets requires management
estimation as they are dependent on estimates of future cash
flows, tax and discount rates and other asset specific
assumptions such as the customer attrition rate for the
customer relationship intangible. Management engaged their
own external valuation experts to assist with the determination
of the fair values of the acquired intangible assets.
We have focused on this area as the valuation of intangible
assets on acquisition involves a significant degree of
judgement and the estimation uncertainty is high. Based on
our risk assessment, we focused our testing on the customer
relationship intangible asset given its size and the estimation
uncertainty associated with the key assumptions.
As part of our risk assessment procedures we assessed the
sensitivity of the customer relationship intangible asset to
reasonable variations in assumptions and identified customer
attrition rates as the significant assumption.
Refer to notes 1 – General information and basis of
preparation and 30 – Business acquisition for further details.
We understood and evaluated the design and implementation
of controls relating to the Group’s purchase price allocation
assessment.
We obtained management’s purchase price allocation results.
We utilised our in-house valuation experts to evaluate the
appropriateness of the valuation methodology used by
management’s experts against the requirements of the
financial reporting framework and we tested the
mathematical accuracy of the calculations. We also assessed
the competency and objectivity of our in-house and
management experts so that we were able to use their work.
In respect of the significant assumptions utilised in the
valuation of the customer relationship intangible asset we
performed the following procedures:
¼ For customer attrition we compared the forecast rates to
historical tastytrade and Group data;
¼ For the other remaining assumptions these were validated
to underlying support provided by management, for
example, future cash flows were agreed to approved
acquisition business cases; and
¼ For certain assumptions we used the work of our in-house
valuation experts which included an independent
assessment of the inputs used to determine the discount
rate.
We evaluated the appropriateness of the critical accounting
estimates and key sources of estimation uncertainty in note 1
to the Group Financial Statements and the disclosures on the
business acquisition in note 30 and considered these to be
reasonable. We performed independent sensitivity
calculations for the relevant assumptions included in note 30.
Based on the procedures performed, we considered the
directors’ conclusion that the customer relationship intangible
asset should be recognised at £163.5mn on acquisition of
tastytrade, Inc. to be reasonable.
Independent Auditors’ Report continued
121
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Key audit matter How our audit addressed the key audit matter
Estimation of the recoverable amount of the cash
generating unit – tastytrade, Inc. (Group)
The Group recorded £462mn of goodwill on the acquisition of
tastytrade, Inc. on 28 June 2021. As required by IAS 36 –
Impairment of assets, management has performed its first
annual goodwill impairment assessment.
The goodwill impairment assessment is dependent on an
estimate of the recoverable amount of the tastytrade cash
generating unit (“CGU”). Management used a value-in-use
model to determine the recoverable amount of the tastytrade
CGU in their impairment assessment.
We have focused on this area as the calculation of value-in-
use of the tastytrade CGU involves a significant degree of
judgement and the estimation uncertainty is high.
As part of our risk assessment procedures we also assessed
the sensitivity of the value-in-use to reasonable variations in
certain significant assumptions.
A number of assumptions principally relating to short and long
term revenue growth, earnings before interest, tax,
depreciation and amortisation, and discount rates are
required to be assessed by management. To assist with the
determination of the value-in-use, management engaged
their own external valuation experts.
No impairment charge has been recorded for the year ended
31 May 2022.
Refer to notes 1 – General information and basis of
preparation, and 15 – Goodwill for further details.
We understood and evaluated the design and implementation
of controls relating to the Group’s impairment assessment.
We obtained management’s value-in-use impairment model.
We assessed the methodology used by management and
their experts against the requirements of the financial
reporting framework and we tested the mathematical
accuracy of the calculations. We validated the carrying
amount of the CGU to underlying accounting records and
compared the cash flows used in the impairment models to
the Board approved plan.
We utilised our in-house valuation experts to evaluate the
appropriateness of the methodology used in the impairment
model. We also assessed the competency and objectivity of
our in-house and management experts so that we were able
to use their work.
In respect of management’s assumptions, our in-house
valuation experts assessed the reasonableness of the discount
rate and long-term growth rate used in the impairment model.
We performed the following procedures over significant
assumptions:
¼ Challenged the appropriateness of management’s
assumptions and, where relevant, their interrelationships;
¼ We identified the key drivers in management’s forecasts
and obtained evidence to support the reasonableness of
these assumptions including historic experience, third-
party sources including market reports and information
available from tastytrade management; and
¼ Assessed whether judgements made in deriving the
assumptions gave rise to indicators of possible
management bias.
Representations were obtained from management that
assumptions used were their best estimate and were
consistent with information currently available to them.
We evaluated the appropriateness of the critical accounting
estimates and key sources of estimation uncertainty in note 1
to the Group Financial Statements and the disclosures on
goodwill in note 15 and considered these to be reasonable.
We performed independent sensitivity calculations for the
relevant assumptions included in note 15.
Based on the procedures performed, we considered the
directors’ conclusion that the goodwill within the tastytrade
CGU is not impaired to be reasonable.
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Key audit matter How our audit addressed the key audit matter
OTC derivative revenue (Group)
The Group’s trading revenue is predominantly generated from
over the counter (“OTC”) derivatives placed by clients, offset
by net gains or losses from the hedging trades that the Group
places with external market counterparties to manage its
market risk. The Group’s revenue on these activities arises
principally from spreads, overnight funding charges and
commissions.
The audit of revenue from OTC derivatives is a focus of our
audit given the magnitude of the balance, the large volume of
transactions and the automated nature of the revenue
calculations.
Refer to notes 2 – Significant accounting policies and 3 –
Segment analysis for further details.
We focused firstly on understanding the control environment
in which revenue is recorded. We understood and evaluated
the design of key controls in place and tested their operating
effectiveness.
These controls included:
¼ IT general controls over key revenue systems in scope;
¼ Automated business controls such as interfaces between
in-scope systems, key reports and automated calculations;
¼ Validation of system calculated revenue numbers including
manual client ledger postings by the Group’s revenue
control team;
¼ Cash and settlement reconciliations; and
¼ Market counterparty and other third party reconciliations.
We concluded that we could place reliance on these controls
for the purpose of our audit.
Our substantive testing included, but was not limited to, the
following:
¼ Using data enabled audit techniques, we recalculated the
revenue recorded in relation to a sample of trades and
agreed these to the underlying accounting records;
¼ Testing commission, overnight funding, guaranteed stop
premium and cash currency transfer rates on a sample
basis;
¼ We tested the valuation of selected client and broker
positions to third party pricing sources;
¼ We agreed all cash account balances to external third-
party evidence at year-end through a combination of
independent confirmations and examination of bank
statements;
¼ We agreed all amounts and balances held with market
counterparties to independent confirmations or other
external third party evidence; and
¼ We tested manual client ledger postings on a sample basis.
Based on the procedures performed, no material issues arose
from this work.
Independent Auditors’ Report continued
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Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Key audit matter How our audit addressed the key audit matter
Carrying value of the investments in subsidiaries
(Company)
The Company has total investments in subsidiaries of
£1,076mn, of which the full amount is an investment in IG
Group Limited (“IGGL”).
IGGL is the Group holding Company which, via a series of
other holding companies, owns all the operating entities of the
Group.
This investment is held at cost less any provision for
impairment.
IAS 36 ‘Impairment of Assets’ requires that investments are
subject to an impairment review when there is an indication
that an asset may be impaired. Management identified an
indicator of impairment and performed an impairment
assessment and estimated the recoverable amount using a
value-in-use model.
We have focused on this area as the calculation of value-in-
use involves a significant degree of judgement.
Management’s impairment assessment showed significant
headroom at year-end, and consequently no impairment
provision is held against this investment.
Refer to notes 2 – Accounting policies and 6 – Investment in
subsidiaries of the Company Financial Statements for further
details.
We have evaluated management’s impairment assessment
that identified an indicator for impairment and found this to be
reasonable.
We obtained management’s value-in-use calculation that was
used to estimate the recoverable amount of the investment in
subsidiaries and performed the following substantive
procedures:
¼ Assessed the reliability of management’s data used as
inputs to management’s value-in-use calculation;
¼ Assessed the discount rate used for reasonableness;
¼ Assessed the long – term growth rate for reasonableness;
and
¼ Tested the mathematical accuracy of management’s
value-in-use model.
We concluded that the carrying value of the investment is
supported by the recoverable amount of the underlying
operating companies and consider the directors’ conclusion
that the investments in subsidiaries balance is not impaired to
be reasonable.
We evaluated the appropriateness of the disclosures on the
investment in subsidiaries in the Company Financial
Statements and found these to be reasonable.
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How we tailored the audit scope
We performed a risk assessment, giving consideration to relevant external and internal factors including industry dynamics,
litigation, climate change, impact of Covid-19, relevant accounting and regulatory developments, the Group’s strategy and the
changes taking place across the Group including the acquisition of tastytrade, Inc. and the disposal of Nadex. We also
considered our knowledge and experience obtained in prior year audits.
As part of considering the impact of climate change in our risk assessment, we evaluated management’s assessment of the
impact of climate risk, the detail of which is set out on page 34, including their conclusion that there are no material risks.
Management’s assessment gave consideration to a number of matters, including the results of their climate related risks and
opportunities exercise that was performed during the year. We have also understood the impact of the Group’s carbon
reduction targets, which are outlined on page 34 and these are not considered to have a material impact on the Financial
Statements.
Using our risk assessment, we tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the Financial Statements as a whole, taking into account the structure of the Group and the Company and the
accounting processes and controls, and the industry in which they operate. We continually assessed risks and changed the
scope of our audit where necessary.
The Group consists of a UK holding Company with a number of subsidiary entities and branches containing the operating
businesses of both the UK, United States and overseas territories. Our risk assessment and scoping identified tastyworks, Inc. as
a new significant component of the Group due to the acquisition of tastytrade, Inc. on 28 June 2021. We obtained a full scope
audit opinion for the financial position as at 31 May 2022 and results of tastyworks, Inc. for the period from 28 June 2021 to
31 May 2022. The audit of tastyworks, Inc. was performed by a PwC member firm in the United States.
The other significant financial reporting component was determined to be the OTC derivatives and stock trading and
investment businesses. As the accounting records and related controls for both the UK, United States and overseas businesses
are primarily maintained and operated by the Group’s finance teams in London and Krakow this was considered one financial
reporting component. The technology and business process controls that are relevant to our financial statement audits are
operated by the Group in London and Krakow. As a result, the audit work over this component was performed by the Group
engagement team in London, supported by the PwC member firm in Poland, reflecting the centralised nature of the Group’s
financial reporting activities. Some of this work was also relied upon by the PwC engagement team auditing tastyworks, Inc.
All remaining components, which are Exchange Traded Derivative businesses, were subject to procedures which mitigated the
risk of material misstatement including Group level analytical review procedures.
The Company audit was performed by the Group engagement team.
tastyworks, Inc. audit approach
We asked the partner and engagement team reporting to us on tastyworks, Inc. to work to an assigned materiality reflecting
thesize of the tastyworks, Inc. component. We were in active dialogue throughout the year with the partner and engagement
team responsible for the audit, including consideration of how they planned and performed their work. We obtained direct
access to their working papers to oversee and review their work. We also attended meetings with tastyworks, Inc. management
at year-end. The majority of our interactions were undertaken virtually.
Using the work of others
We continued to make use of evidence provided by others. We used the work of PwC experts, for example, valuation experts for
our work over the carrying value of goodwill and acquired intangible assets at 31 May 2022 and the fair value of those intangible
assets recognised on acquisition.
Independent Auditors’ Report continued
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Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality.
These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent
of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of
misstatements, both individually and in aggregate on the Financial Statements as a whole.
Based on our professional judgement, we determined materiality for the Financial Statements as a whole as follows:
Financial Statements – Group Financial Statements – Company
Overall materiality £23,800,000 (2021: £22,500,000). £17,600,000 (2021: £7,600,000).
How we determined it 5% of adjusted profit before tax
(2021: 5% of profit before tax)
1% of total assets
Rationale for benchmark applied
We believe a standard benchmark of 5%
of adjusted profit before tax is an
appropriate quantitative indicator or
materiality, although certain items could
also be material for quantitative reasons.
This benchmark is standard for listed
entities like IG. We selected an adjusted
profit measure this year in order to exclude
the performance and gain on sale of
Nadex and Small Exchange during the
period, as in our opinion they are non
recurring items that do not form part of
ongoing business performance.
We have used a benchmark of total
assets as the Company’s primary
purpose is to act as a holding Company
with investments in the Group’s
subsidiaries, not to generate operating
profits and therefore a profit based
measure is not relevant. The benchmark
used is consistent with last year.
For each component in the scope of our Group audit, we allocated a materiality that is less than our overall Group materiality.
The range of materiality allocated across components was between £5,000,000 to £22,600,000.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of
our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for example in
determining sample sizes. Our performance materiality was 75% (2021: 75%) of overall materiality, amounting to £17,800,000
(2021: £16,900,000) for the Group Financial Statements and £13,200,000 (2021: £5,700,000) for the Company Financial
Statements.
In determining the performance materiality, we considered a number of factors – the history of misstatements, risk assessment
and aggregation risk and the effectiveness of controls – and concluded that an amount at the upper end of our normal range
was appropriate.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above £1,100,000
(Group audit) (2021: 1,100,000) and £880,000 (Company audit) (2021: £300,000) as well as misstatements below those amounts
that, in our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the Group’s and the Company’s ability to continue to adopt the going concern
basis of accounting included:
¼ Performing a risk assessment to identify factors that could impact the going concern basis of accounting.
¼ Obtaining and evaluating management’s going concern assessment.
¼ Understanding and evaluating the Group’s financial forecasts and the Group’s stress testing of liquidity and capital, including
the severity of the stress scenarios that were used.
¼ Validation of year end financial resources such as cash and debt securities in issue.
¼ Evaluating the adequacy of the disclosures made in the Financial Statements in relation to going concern.
¼ Consideration of the regulatory capital and liquidity requirements applicable to the Group.
¼ Obtaining and reviewing the Group’s most recent internal capital adequacy assessment process and individual liquidity
adequacy assessment documents.
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Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the Group’s and the Company’s ability to continue as a going concern
for a period of at least twelve months from when the Financial Statements are authorised for issue.
In auditing the Financial Statements, we have concluded that the directors’ use of the going concern basis of accounting in the
preparation of the Financial Statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the Group’s and
the Company’s ability to continue as a going concern.
In relation to the directors’ reporting on how they have applied the UK Corporate Governance Code, we have nothing material
to add or draw attention to in relation to the directors’ statement in the Financial Statements about whether the directors
considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections
of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the Financial Statements and our
auditors’ report thereon. The directors are responsible for the other information, which includes reporting based on the Task
Force on Climate-related Financial Disclosures (“TCFD”) recommendations. Our opinion on the Financial Statements does not
cover the other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly
stated in this report, any form of assurance thereon.
In connection with our audit of the Financial Statements, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the Financial Statements or our knowledge obtained in
the audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material
misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the Financial
Statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we are required to report that fact. We have nothing to report based
on these responsibilities.
With respect to the Strategic Report and Directors’ Report, we also considered whether the disclosures required by the UK
Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions
and matters as described below.
Strategic Report and Directors’ Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic Report and
Directors’ Report for the year ended 31 May 2022 is consistent with the Financial Statements and has been prepared in
accordance with applicable legal requirements.
In light of the knowledge and understanding of the Group and Company and their environment obtained in the course of the
audit, we did not identify any material misstatements in the Strategic Report and Directors’ Report.
Directors’ Remuneration
In our opinion, the part of the Directors’ Remuneration Report and Policy to be audited has been properly prepared in
accordance with the Companies Act 2006.
Independent Auditors’ Report continued
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Corporate governance statement
The Listing Rules require us to review the directors’ statements in relation to going concern, longer-term viability and that part
of the corporate governance statement relating to the Company’s compliance with the provisions of the UK Corporate
Governance Code specified for our review. Our additional responsibilities with respect to the corporate governance statement
as other information are described in the Reporting on other information section of this report.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate
governance statement is materially consistent with the Financial Statements and our knowledge obtained during the audit, and
we have nothing material to add or draw attention to in relation to:
¼ The directors’ confirmation that they have carried out a robust assessment of the emerging and principal risks;
¼ The disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify emerging
risks and an explanation of how these are being managed or mitigated;
¼ The directors’ statement in the Financial Statements about whether they considered it appropriate to adopt the going
concern basis of accounting in preparing them, and their identification of any material uncertainties to the Group’s and
Company’s ability to continue to do so over a period of at least twelve months from the date of approval of the Financial
Statements;
¼ The directors’ explanation as to their assessment of the Group’s and Company’s prospects, the period this assessment
covers and why the period is appropriate; and
¼ The directors’ statement as to whether they have a reasonable expectation that the Company will be able to continue in
operation and meet its liabilities as they fall due over the period of its assessment, including any related disclosures drawing
attention to any necessary qualifications or assumptions.
Our review of the directors’ statement regarding the longer-term viability of the Group was substantially less in scope than an
audit and only consisted of making inquiries and considering the directors’ process supporting their statement; checking that
the statement is in alignment with the relevant provisions of the UK Corporate Governance Code; and considering whether the
statement is consistent with the Financial Statements and our knowledge and understanding of the Group and Company and
their environment obtained in the course of the audit.
In addition, based on the work undertaken as part of our audit, we have concluded that each of the following elements of the
corporate governance statement is materially consistent with the Financial Statements and our knowledge obtained during the
audit:
¼ The directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and understandable, and
provides the information necessary for the members to assess the Group’s and Company’s position, performance, business
model and strategy;
¼ The section of the Annual Report that describes the review of effectiveness of risk management and internal control
systems; and
¼ The section of the Annual Report describing the work of the Audit Committee.
We have nothing to report in respect of our responsibility to report when the directors’ statement relating to the Company’s
compliance with the Code does not properly disclose a departure from a relevant provision of the Code specified under the
Listing Rules for review by the auditors.
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Responsibilities for the Financial Statements and the audit
Responsibilities of the directors for the Financial Statements
As explained more fully in the Statement of Directors’ Responsibilities, the directors are responsible for the preparation of the
Financial Statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The
directors are also responsible for such internal control as they determine is necessary to enable the preparation of Financial
Statements that are free from material misstatement, whether due to fraud or error.
In preparing the Financial Statements, the directors are responsible for assessing the Group’s and the Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or the Company or to cease operations, or have no realistic
alternative but to do so.
Auditors’ responsibilities for the audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the Financial Statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
Financial Statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to
which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the Group and industry, we identified that the principal risks of non-compliance with laws and
regulations related to the Financial Conduct Authority (FCA) Listing Rules and rulebook requirements and UK tax legislation, and
we considered the extent to which non-compliance might have a material effect on the Financial Statements. We also
considered those laws and regulations that have a direct impact on the Financial Statements such as the Companies Act 2006.
We evaluated management’s incentives and opportunities for fraudulent manipulation of the Financial Statements (including
the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to
increase revenue or reduce costs and management bias in accounting estimates. The Group engagement team shared this risk
assessment with the component auditors so that they could include appropriate audit procedures in response to such risks in
their work. Audit procedures performed by the Group engagement team and/or component auditors included:
¼ Enquiries of management, internal audit, and those charged with governance in relation to known or suspected instances of
non-compliance with laws and regulation and fraud;
¼ Review of correspondence with regulators, and internal audit reports in so far as they are related to the Financial Statements;
¼ Specific written enquiries of external legal counsel to assist with our evaluation of known instances of non-compliance with
laws and regulations, including their potential impact;
¼ Challenging assumptions and judgements made by management in its significant accounting estimates, in particular in
relation to the carrying value of the goodwill and acquired intangible assets, fair value of the intangible assets recognised on
acquisition and the investment in subsidiaries (see related key audit matters);
¼ Identifying and testing journal entries, including those posted to certain account combinations, posted with certain
descriptions, backdated journals or posted by unexpected users;
¼ Incorporating unpredictability into the nature, timing and/or extent of our testing; and
¼ Review of reporting to the Audit Committee and minutes of Board of Directors’ meetings and made enquiries of
management to understand the business rationale for unusual and significant transactions.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of
non-compliance with laws and regulations that are not closely related to events and transactions reflected in the Financial
Statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one
resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or
through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing
techniques. However, it typically involves selecting a limited number of items for testing, rather than testing complete
populations. We will often seek to target particular items for testing based on their size or risk characteristics. In other cases,
wewill use audit sampling to enable us to draw a conclusion about the population from which the sample is selected.
A further description of our responsibilities for the audit of the Financial Statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Independent Auditors’ Report continued
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IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Use of this report
This report, including the opinions, has been prepared for and only for the Company’s members as a body in accordance with
Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or
assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may
come save where expressly agreed by our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
¼ we have not obtained all the information and explanations we require for our audit; or
¼ adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been received
from branches not visited by us; or
¼ certain disclosures of directors’ remuneration specified by law are not made; or
¼ the Company Financial Statements and the part of the Directors’ Remuneration Report and Policy to be audited are not in
agreement with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Appointment
We were appointed by the directors on 8 December 2010 to audit the Financial Statements for the year ended 31 May 2011 and
subsequent financial periods. The period of total uninterrupted engagement is 12 years, covering the years ended 31 May 2011
to 31 May 2022.
Other matter
As required by the Financial Conduct Authority Disclosure Guidance and Transparency Rule 4.1.14R, these Financial Statements
form part of the ESEF-prepared annual financial report filed on the National Storage Mechanism of the Financial Conduct
Authority in accordance with the ESEF Regulatory Technical Standard (‘ESEF RTS’). This auditors’ report provides no assurance
over whether the annual financial report has been prepared using the single electronic format specified in the ESEF RTS.
Carl Sizer (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
20 July 2022
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FINANCIAL STATEMENTS
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Financial Statements
A year of change;
accelerating growth
PG. 131-181
Primary Statements
Consolidated Income Statement 131
Consolidated Statement of Comprehensive Income 132
Consolidated Statement of Financial Position 133
Consolidated Statement of Changes in Equity 134
Consolidated Statement of Cash Flows 135
Notes to the Financial Statements
1. General information and
basis of preparation 136
2. Significant accounting policies 138
3. Segmental analysis 148
4. Operating costs 149
5. Auditors’ remuneration 150
6. Staff costs 150
7. Finance income 151
8. Finance costs 151
9. Taxation 151
10. Earnings per ordinary share 154
11. Dividends paid and proposed 154
12. Property, plant and equipment 155
13. Intangible assets 156
14. Financial investments and financial assets
pledged as collateral 156
15. Goodwill 157
16. Trade receivables 159
17. Other assets 159
18. Borrowings and debt securities in issue 159
19. Lease liabilities 160
20. Trade payables 160
21. Other payables 160
22. Contingent liabilities and provisions 161
23. Share capital and share premium 161
24. Other reserves 162
25. Employee share plans 163
26. Related party transactions 166
27. Financial instruments 167
28. Financial risk management 169
29. Cash flow information 174
30. Business acquisition 174
31. Discontinued operations 177
32. Investment in associates 178
33. Investments in subsidiaries 179
34. Subsequent events 181
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Consolidated Income Statement
for the year ended 31 May 2022
Note
Year ended
31 May 2022
£m
Year ended
31 May 2021
(Restated)
£m
Continuing operations
Trading revenue 982 . 0 84 6.9
Introducing partner commissions (9.7) (9.6)
Net trading revenue 3 972 . 3 8 3 7. 3
Betting duty and financial transaction taxes (2 . 5) (0. 9)
Interest income on client funds 3.5 2 .1
Interest expense on client funds (2 .7) (1. 8)
Other operating income 8.6 7. 0
Net operating income 979. 2 8 4 3 .7
Operating costs 4 (499. 2) (390.5)
Net credit losses on financial assets 28 (2 .7) (3 .0)
Operating profit 47 7. 3 450.2
Gain on disposal of associates 4 .1 –
Loss on disposal of subsidiaries – (0. 4)
Fair value gain on convertible loan note 9.3 –
Share of loss after tax from associates 32 (2 . 3) –
Finance income 7 3. 4 2 .1
Finance costs 8 (14 . 8) (5 . 9)
Profit before tax 4 7 7. 0 446.0
Tax expense 9 (8 0 . 9) (77 .4)
Profit for the year from continuing operations 3 9 6 .1 368.6
Profit for the year from discontinued operations 31 1 0 7. 8 3.3
Profit for the year and attributable to owners of the parent 503.9 3 71. 9
Earnings per ordinary share for profit from continuing operations:
Basic 10 92 . 9 p 9 9.8 p
Diluted 10 9 2 .1p 9 9. 0 p
Earnings per ordinary share for profit attributable to owners:
Basic 10 11 8 . 2 p 10 0 .7p
Diluted 10 117. 2 p 9 9. 9 p
1 The FY21 comparatives have been restated to present separately the results of discontinued operations. Refer to note 31 for further details.
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FINANCIAL STATEMENTS
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Consolidated Statement of Comprehensive Income
for the year ended 31 May 2022
Year ended 31 May 2022 Year ended 31 May 2021
£m £m £m £m
Profit for the year attributable to owners of the parent 503.9 3 71. 9
Other comprehensive income:
Items that may be subsequently reclassified to the income statement:
Changes in the fair value of financial assets held at fair value through
other comprehensive income, net of tax (4 . 0) (1. 3)
Foreign currency translation gain/(loss) attributable to continuing
operations 6 7. 4 (17. 7)
Foreign currency translation (loss) attributable to discontinued
operations (3 .0) (3 . 2)
Other comprehensive income/(loss) for the year, net of tax 60.4 (22 . 2)
Total comprehensive income attributable to owners of the parent 564 .3 3 49.7
Total comprehensive income attributable to owners of the parent
arising from:
Continuing operations 459.5 3 49. 6
Discontinued operations 10 4 . 8 0 .1
564 .3 3 49.7
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Consolidated Statement of Financial Position
at 31 May 2022
Note
31 May 2022
£m
31 May 2021
£m
Assets
Non-current assets
Goodwill 15 60 4 .7 1 0 7. 3
Intangible assets 13 2 9 2 .1 32.7
Property, plant and equipment 12 36.6 38 .6
Financial investments 14 13 4 . 8 12 7. 6
Financial assets pledged as collateral 14 25.3 6 1 .1
Investment in associates 32 14 . 8 –
Deferred income tax assets 9 1 7. 5 12 . 9
1,12 5 . 8 38 0. 2
Current assets
Cash and cash equivalents 1 ,246.4 655.2
Trade receivables 16 4 69. 5 49 0.9
Financial investments 14 20 0.9 12 7. 4
Financial assets pledged as collateral 14 35 .1 26 .0
Other assets 17 14 . 2 30.3
Prepayments 23. 2 12 .6
Other receivables 9.8 5.5
1 ,999. 1 1 , 3 4 7. 9
Assets classified as held for sale 1. 2 –
TOTAL ASSETS 3 ,12 6 .1 1, 7 2 8 .1
Liabilities
Non-current liabilities
Borrowings 18 – 98.8
Debt securities in issue 18 2 97. 2 –
Lease liabilities 19 13. 0 16 . 4
Deferred income tax liabilities 9 6 7. 2 0.8
37 7. 4 11 6 . 0
Current liabilities
Trade payables 20 571 . 2 3 5 7. 5
Other payables 21 11 9 . 5 10 8 . 2
Lease liabilities 19 8. 9 6 .7
Income tax payable 9 20.5 6.4
72 0 .1 478 . 8
Liabilities directly associated with assets classified as held for sale 0.8 –
TOTAL LIABILITIES 1 ,098.3 594.8
Equity
Share capital and share premium 23 12 5 . 8 12 5 . 8
Translation reserve 117. 6 53.2
Merger reserve 590 .0 81. 0
Other reserves 24 8. 4 12 . 8
Retained earnings 1 , 1 86.0 860.5
TOTAL EQUITY 2 , 0 2 7. 8 1 , 1 33.3
TOTAL EQUITY AND LIABILITIES 3 ,12 6 .1 1, 7 2 8 .1
The consolidated financial statements on pages 131 to 181 were approved by the Board of Directors on 20 July 2022 and signed
on its behalf by:
Charles Rozes
Chief Financial Officer
Registered Company number: 04677092
134
FINANCIAL STATEMENTS
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Consolidated Statement of Changes in Equity
for the year ended 31 May 2022
Note
Share
capital
£m
Share
premium
£m
Translation
reserve
£m
Merger
Reserve
£m
Other
reserves
£m
Retained
earnings
£m
Total
£m
At 1 June 2020 – 12 5 . 8 74 .1 81 . 0 1 3.3 6 41 . 7 935 . 9
Profit for the year and attributable to
owners of the parent – – – – – 371. 9 3 71. 9
Other comprehensive loss for the
year – – (20. 9) – (1 . 3) – (22 . 2)
Total comprehensive (loss)/income
for the year – – (20. 9) – (1. 3) 3 71. 9 3 4 9.7
Tax recognised directly in equity on
share-based payments 9 – – – – – 0. 2 0. 2
Equity dividends paid 11 – – – – – (15 9 . 7) (15 9 . 7)
Employee Benefit Trust purchase of
own shares 24 – – – – (0 . 2) – (0 . 2)
Transfer of vested awards from the
share-based payment reserve – – – – (6 .4) 6.4 –
Equity-settled employee share-
based payments 25 – – – – 7. 4 – 7. 4
At 31 May 2021 – 125 . 8 53.2 81. 0 12 . 8 860.5 1 , 1 33.3
At 1 June 2021 – 12 5 . 8 53.2 81. 0 12 . 8 860.5 1,13 3 . 3
Profit for the year and attributable to
owners of the parent – – – – – 503.9 503.9
Other comprehensive income/(loss)
for the year – – 64.4 – (4 . 0) – 60.4
Total comprehensive income/(loss)
for the year – – 64.4 – (4 . 0) 503.9 564 .3
Tax recognised directly in equity on
share-based payments 9 – – – – – 0.5 0.5
Equity dividends paid 11 – – – – – (186 . 2) (186 . 2)
Employee Benefit Trust purchase of
own shares 24 – – – – (6 .7) – (6.7)
Transfer of vested awards from the
share-based payment reserve – – – – (7. 3) 7. 3 –
Equity-settled employee share-
based payments 25 – – – – 13 . 6 – 13 . 6
Issue of ordinary share capital for
theacquisition of tastytrade 30 – – – 5 09. 0 – – 50 9. 0
At 31 May 2022 – 12 5 . 8 117. 6 59 0.0 8. 4 1 , 1 86.0 2 , 0 2 7. 8
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IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Consolidated Statement of Cash Flows
for the year ended 31 May 2022
Note
Year ended
31 May 2022
£m
Year ended
31 May 2021
£m
Operating activities
Cash generated from operations 29 811 . 4 573 . 5
Income taxes paid (99. 2) (8 3. 0)
Net cash flows generated from operating activities 712 . 2 490.5
Investing activities
Interest received 3.2 1. 5
Net cash flow to investment in associates (1 . 9) –
Purchase of property, plant and equipment (8 .5) (9 .1)
Payments to acquire and develop intangible assets (9.0) (6 . 9)
Net proceeds from disposal of subsidiaries 14 3 . 3 –
Net proceeds from disposal of investments in associates 24 .5 –
Net cash flow from financial investments (5 7. 1) (11 8 . 2)
Net cash flow to acquire subsidiaries (19 3 . 5) –
Net cash flows used in investing activities (99. 0) (13 2 . 7)
Financing activities
Interest paid (11 . 0) (5. 0)
Financing fees paid (5 . 4) (1. 3)
Interest paid on lease liabilities (0 .6) (0.6)
Repayment of principal element of lease liabilities (7. 5) (5 . 2)
Drawdown on term loan 15 0 . 0 –
Repayment of term loans (250 . 0) –
Net proceeds from issue of debt securities 29 9. 2 –
Equity dividends paid to owners of the parent (186 . 2) (15 9 . 7)
Employee Benefit Trust purchase of own shares (6.7) (0 . 2)
Net cash flows used in financing activities (18 . 2) (172 . 0)
Net increase in cash and cash equivalents 595. 0 18 5 . 8
Cash and cash equivalents at the beginning of the year 655. 2 486.2
Impact of movement in foreign exchange rates (3 .8) (16 . 8)
Cash and cash equivalents at the end of the year 1 ,246.4 655 . 2
1 Cash generated from operations include cash generated from both continuing and discontinued operations. Refer to note 31 for cash flows of discontinued operations.
136
FINANCIAL STATEMENTS
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Notes to the Financial Statements
1. General information and basis of preparation
General information
The Financial Statements of IG Group Holdings plc and its subsidiaries (together ‘the Group’) for the year ended 31 May 2022
were authorised for issue by the Board of Directors on 20 July 2022 and the Consolidated Statement of Financial Position was
signed on the Board’s behalf by Charles Rozes. IG Group Holdings plc is a public company limited by shares, which is listed on
the London Stock Exchange and incorporated and domiciled in England and Wales. The address of the registered office is
Cannon Bridge House, 25 Dowgate Hill, London, EC4R 2YA.
Basis of preparation
(a) Compliance with International Financial Reporting Standards (IFRS)
On 31 December 2020, IFRS as adopted by the European Union was brought into UK law and became UK-adopted International
Accounting Standards, with future changes being subject to endorsement by the UK Endorsement Board. The Group
transitioned to UK-adopted International Accounting Standards in the Group Financial Statements on 1 June 2021. This change
constitutes a change in accounting framework. However, there is no impact on recognition, measurement or disclosure in the
period reported as a result of the change in framework.
The Group’s Financial Statements have been prepared in accordance with UK-adopted International Accounting Standards and
with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards. There were no
unendorsed standards effective for the year ended 31 May 2022 affecting these Consolidated Financial Statements.
These Financial Statements have been prepared under the historical cost convention, as modified by the revaluation of financial
assets and financial liabilities (including derivative instruments) at fair value through other comprehensive income and fair value
through profit and loss.
The accounting policies which have been applied in preparing the Group Financial Statements for the year ended 31 May 2022
are disclosed in note 2.
(b) Critical accounting estimates and judgements
The preparation of these Financial Statements in conformity with UK-adopted International Accounting Standards requires the
Group to make use of certain critical accounting estimates that affect the amounts reported for assets and liabilities as at the
reporting date, and the amounts reported for revenue and expenses during the period. It also requires management to exercise
its judgement in the process of applying the Group’s accounting policies.
The nature of estimates and judgements means that actual outcomes could differ from those estimates. In the Directors’
opinion, the accounting estimates or judgements that have the most significant impact on the presentation or measurement of
items recorded in the Financial Statements are the following:
Fair value and useful economic lives of intangible assets acquired (estimate)
– the Group has recognised intangible assets of
£263.5 million upon acquisition of tastytrade, Inc. (tastytrade) based on estimates of fair values at the acquisition date of
28 June 2021. The fair values of intangible assets are based upon a number of factors including management’s best estimates of
future performance and estimates of an appropriate discount rate. The identified intangible assets are amortised over their
remaining useful economic lives, which are also based on management’s best estimates of the periods over which value from
the intangible asset is generated. Further information outlining the valuation methodologies and the significant assumptions,
together with sensitivities, is provided in note 30.
Recoverable amount of US (tastytrade) cash-generating unit (CGU) (estimate)
– the Group has estimated the recoverable
amount of its US (tastytrade) CGU, which includes goodwill of £502.8 million and other acquisition-related intangibles resulting
from the tastytrade acquisition. Key assumptions used in the value-in-use calculations include management cash flow
forecasts, the discount rate and the long-term growth rate. The recoverable amount of the US (tastytrade) CGU is sensitive to a
reasonably possible change in some of these assumptions. Further information regarding the assumptions and their associated
sensitivities is provided in note 15.
(c) New accounting standards and interpretations
There were no new standards, amendments or interpretations issued during the period which have had a material impact
ontheGroup. The Group has not early adopted any standard, interpretation or amendment that has been issued but is
notyeteffective.
The IASB has published a number of minor amendments to IFRSs that are effective from 1 January 2022 and 1 January 2023.
These include amendments published to IAS 12 – Income Taxes, IAS 37 – Provisions and Contingent Liabilities and Contingent
Assets. The Group is in process of assessing the impact of these amendments. There have also been amendments published to
IAS 1 – Presentation of Financial Statements. However, the Group expects they will have an insignificant effect, when adopted,
on the Consolidated Financial Statements of the Group.
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Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
1. General information and basis of preparation continued
(d) Segmental information
The Group’s segmental information is disclosed in a manner consistent with the basis of internal reporting provided to the Chief
Operating Decision Maker (CODM) regarding components of the Group. The Group has identified the CODM as the Executive
Directors of IG Group Holdings plc, who regularly review this management information to assess the performance and allocate
resources to the reportable segments. The CODM uses net trading revenue as the primary measure of performance of the
various segments of the Group. Reportable segments that do not meet the quantitative thresholds required by IFRS 8
areaggregated.
(e) Foreign currencies
The functional currency of each entity in the Group is consistent with the primary economic environment in which the entity
operates. Transactions in other currencies are initially recorded in the functional currency by applying spot exchange rates
prevailing on the date of the transactions. Monetary assets and liabilities denominated in foreign currencies are revalued at the
entity’s functional currency exchange rate prevailing at the balance sheet date. Gains and losses arising on revaluation are taken
to trading revenue in the Income Statement. Non-monetary assets and liabilities carried at fair value and denominated in foreign
currencies are translated at the rates prevailing at the date when the fair value was determined.
The Group’s presentational currency is sterling. In the Group Financial Statements, the assets and liabilities of Group’s overseas
operations are translated into sterling at exchange rates prevailing on the balance sheet date. Income and expense items are
translated at the average exchange rates for the year. Goodwill and fair value adjustments arising on the acquisition of a foreign
operation are treated as assets and liabilities of the foreign operation and translated at closing rate. Exchange differences
arising from the translation of overseas operations are recognised in other comprehensive income and translation reserve. On
disposal of an overseas operation, exchange differences previously recognised in other comprehensive income are recycled to
the Income Statement as income or expense.
(f) Going concern
The Directors have prepared the Group Financial Statements on a going concern basis which requires the Directors to have a
reasonable expectation that the Group has adequate resources to continue in operational existence for a period of at least 12
months from the date of approval of the Financial Statements.
In assessing whether it is appropriate to adopt the going concern basis in preparing the Financial Statements, the Directors have
considered the resilience of the Group, taking account of its liquidity position and cash generation, the adequacy of capital
resources, the availability of external credit facilities and the associated financial covenants, and stress-testing of liquidity and
capital adequacy that takes into account the principal risks faced by the business.
The Directors’ assessment has considered future performance, solvency and liquidity over a period of at least 12 months from
the date of approval of the Group Financial Statements. The Board, following the review by the Audit Committee, has a
reasonable expectation that the Group has adequate resources for that period, and confirm that they consider it appropriate to
adopt the going-concern basis in preparing the Financial Statements.
(g) Business acquisitions
The Group acquired tastytrade, Inc. and its subsidiaries (tastytrade) on 28 June 2021. The results of tastytrade have been
consolidated within the Group since the date of acquisition. Where necessary, comparative information is presented in US dollar
alongside sterling. Further details are disclosed in note 30.
As part of the acquisition of tastytrade, the Group acquired an investment in Small Exchange, Inc. (Small Exchange). In addition,
at acquisition date, the Group recognised a convertible loan note with Zero Hash Holdings Limited (Zero Hash) at a fair value of
$12.0 million. This was subsequently remeasured to $24.2 million prior to conversion to an equity shareholding in September
2021 and recognised as an investment in associate on the Statement of Financial Position.
(h) Disposals
On 1 March 2022, the Group completed the disposal of its North American Derivatives Exchange, Inc operations (Nadex) and its
investment in Small Exchange.
The profits of Nadex have been separated from the profits of the Group’s continuing operations for the year and shown as
discontinued operations, with the comparative period restated accordingly. The Nadex operations were not classified as a
disposal group as at 31 May 2021 and the Consolidated Statement of Financial Position has not been restated from that
published in the FY21 Group Annual Report. Further details relating to the sale are disclosed in note 31.
138
FINANCIAL STATEMENTS
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Notes to the Financial Statements continued
1. General information and basis of preparation continued
Small Exchange does not meet the criteria for discontinued operations. The Group’s share of losses prior to disposal and the
Group’s gain from the disposal are recognised within continuing operations.
(i) Reclassification of comparatives
To ensure consistency with the current period, comparative figures have been reclassified where the presentation of Financial
Statements has been changed. The adjustments are:
(i) Goodwill of £604.7 million (31 May 2021: £107.3 million) has been separated out from intangible assets and presented as a
separate line item in the Consolidated Statement of Financial Position.
(ii) Merger reserve of £590.0 million (31 May 2021: £81.0 million) has been separated out from other reserves and presented as a
separate line item in the Consolidated Statement of Financial Position.
2. Significant accounting policies
The accounting policies and interpretations adopted in the preparation of the Group Financial Statements are consistent with
those followed in the preparation of the Group Financial Statements for the year ended 31 May 2021, with the exception of
changes in policy on presentation as outlined in note 1, and the following accounting policies adopted due to new transactions
in the year:
¼ Investment in associates and joint ventures
¼ Debt securities in issue
¼ Non-current assets (or disposal groups) and discontinued operations
¼ Money market funds
Basis of consolidation
Subsidiaries
The Group Financial Statements consolidate the financial results of IG Group Holdings plc and the entities it controls
(itssubsidiaries) as listed in note 33.
Subsidiaries are consolidated from the date on which the Group obtains control, up until the date on which control ceases.
Control is achieved where the Group has existing rights that give it the ability to direct the activities that affect the Group’s
returns and exposure, or rights to variable returns from the entity. The results, cash flows and final positions of the subsidiaries
used in the preparation of the Group Financial Statements are prepared for the same reporting year as the parent company
andare based on consistent accounting policies. Where necessary, adjustments are made to the Financial Statements
ofsubsidiaries to align the accounting policies used with those used by other members of the Group. All inter-company
transactions, balances, income and expenses between the Group entities, including unrealised profits arising from them,
areeliminated on consolidation.
Business combinations
Business combinations are accounted for using the acquisition method. On acquisition, the identifiable assets, liabilities and
contingent liabilities of a subsidiary are measured at their fair values at the date of acquisition. The cost of an acquisition is
measured at the fair value of consideration transferred, including an estimate of any contingent or deferred consideration.
Contingent or deferred consideration is remeasured at each balance sheet date with periodic changes to the estimated liability
recognised in the Income Statement. Acquisition-related costs are expensed as they are incurred.
Goodwill is initially measured as the excess of the consideration transferred over the fair values of identifiable net assets. If this
consideration is lower than the fair values of identifiable net assets acquired, the difference is credited to the Income Statement
in the year of acquisition.
The results of subsidiaries acquired or disposed of during the year are included in the Income Statement from the effective date
of acquisition or up to the effective date of disposal, as appropriate.
Investments in associates and joint ventures
Associates are entities for which the Group has significant influence, but not control or joint control. Investments in associates
are accounted for under the equity method of accounting after initially being recognised at cost. The investment is adjusted for
the Group’s share of the profit or loss after tax and other comprehensive income net of tax of the associate which is recognised
from the date that significant influence begins, up until the date that significant influence ceases.
Joint ventures are entities for which the Group has joint control. Investments in joint ventures are accounted for under the equity
method of accounting after initially being recognised at cost. The investment is adjusted for the Group’s share of the profit or
loss and other comprehensive income of the joint venture which is recognised from the date that joint control begins, up until
the date that joint control ceases.
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Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
2. Significant accounting policies continued
Investments in associates and joint ventures are assessed for impairment indicators at the end of each reporting date. If such
indicators exist, the recoverable amount is estimated to determine the extent of the impairment loss (if any). If the recoverable
amount of an asset is estimated to be less than its carrying amount, the carrying value of the investment is reduced to its
recoverable amount. Impairment losses are immediately expensed in the Income Statement.
Revenue recognition
Trading revenue includes revenue arising from each of the Group’s four revenue generation models: OTC derivatives, exchange
traded derivatives, stock trading and investments.
OTC derivatives
Revenue from the OTC derivatives business represents:
(i) fees paid by clients for spread, commission and funding charges in respect of the opening, holding and closing of financial
spread bets, contracts for difference or options contracts, together with gains and losses for the Group arising on client
trading activity; less
(ii) fees paid by the Group in spread, commissions and funding charges arising in respect of hedging the risk associated with the
client trading activity and the Group’s currency exposures, together with gains and losses incurred by the Group arising on
hedging activity.
Open client and hedging positions are fair valued daily with gains and losses arising on this valuation recognised in revenue.
Thepolicies and methodologies associated with the determination of fair value are disclosed in note 27.
Exchange traded derivatives
Revenue from exchange traded derivatives represents:
(i) fee and commission income earned through facilitation of client trades
(ii) payment for order flow generated from execution partners who accept trades from client securities transactions.
In addition to transaction fees, revenue from exchange traded derivatives also includes gains or losses arising from the change
in fair value of the Group’s market-making activity on its multilateral trading facility.
Revenue from exchange traded derivatives is recognised on a trade-date basis.
Stock trading
Revenue from stock trading represents fees and commission earned from transactions in the stock. Revenue is recognised in
full on the date of the trade being placed or the fee being charged.
Investments
Revenue from investments represents management fees, which are earned as a percentage of assets under management.
These are recognised over the period in which the service is provided.
Revenue is shown net of sales taxes. Trading revenue is reported before introducing partner commission, betting duties and
financial transaction taxes, which are disclosed as an expense in arriving at net operating income. Net trading revenue
represents trading revenue after adjusting for introducing partner commission.
Finance income and expense on client funds
Interest income and expense on client funds held with banks and execution partners is accrued on a time basis, by reference to
the principal amount outstanding and at the applicable interest rate are included in operating income. This is consistent with the
nature of the Group’s operations.
Interest income and interest expense on firm cash and client funds that are not held in segregated client money accounts are
disclosed within finance income and finance costs, respectively.
Dividends
Dividends declared but not yet distributed to the Company’s shareholders are recognised as a liability in the Group’s Financial
Statements in the period in which the dividends are approved by the Company’s shareholders.
Employee benefits
Pension obligations
The Group operates defined contribution schemes. Contributions are charged to the Income Statement when they become
payable according to the rules of the schemes. Once the contributions have been paid, the Group has no legal or constructive
obligations to pay further contributions.
140
FINANCIAL STATEMENTS
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Notes to the Financial Statements continued
2. Significant accounting policies continued
Bonus schemes
The Group recognises an accrual and an expense for bonuses based on formulae that take into consideration specific financial
and non-financial measures. Liabilities for the Group’s cash-settled portion of the Sustained Performance Plan are recognised
as an employee benefit expense over the relevant service period and remeasured at each balance sheet date until settlement.
Termination benefits
Termination benefits are payable when an employment contract is terminated by the Group. The Group recognises termination
benefits when the Group can no longer withdraw the offer of those benefits.
Leases
The Group’s leases are recognised as a right-of-use asset with a corresponding lease liability from the date at which the asset is
available for use.
Leasing arrangements can contain both lease and non-lease components. The Group has elected to separate out the non-lease
component and to account for these separately from the right-of-use asset.
The lease liability is initially measured as the net present value of the following payments:
¼ Fixed payments less any lease incentives,
¼ Variable lease payments dependent on an index or rate initially measured as at the commencement date,
¼ Amounts payable by the Group under residual guarantees,
¼ Payments of penalties for terminating the lease.
Lease payments are discounted at the Group’s estimated secured incremental borrowing rate. This represents the cost
toborrow funds in order to obtain a similar valued right-of-use asset in a similar economic environment with similar terms
andconditions.
Right-of-use assets are measured at cost comprising:
¼ Lease liability at initial recognition,
¼ Any lease payments made at or before the commencement date less any lease incentives received,
¼ Any initial direct costs,
¼ Restoration costs.
Right-of-use assets are depreciated over the duration of the lease term.
Lease payments for low-value assets or with a period of 12 months or less are recognised on a straight-line basis as an expense.
Taxation
The income tax expense represents the sum of tax currently payable and movements in deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from accounting profit as reported in the
Income Statement because taxable profit excludes items of income or expense that are taxable or deductible in other years and
items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates in the respective
jurisdictions that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is accounted for on all temporary differences between the carrying amount of assets and liabilities in the Financial
Statements and the corresponding tax bases used in the computation of taxable profit. In principle, deferred tax liabilities are
recognised for all temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable
profits will be available, against which deductible temporary differences may be utilised. Such assets and liabilities are not
recognised if the temporary difference arises from the initial recognition of other assets and liabilities (other than in a business
combination) in a transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where the
Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
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Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
2. Significant accounting policies continued
Deferred tax assets and liabilities are measured on an undiscounted basis at the tax rates that are expected to apply when
therelated asset is realised or liability is settled, based on tax rates and laws enacted or substantively enacted at the balance
sheet date. Deferred tax is charged or credited in the Income Statement, except when it relates to items credited or charged
directly to equity or other comprehensive income, in which case the deferred tax is also dealt with in equity or other
comprehensive income.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the
Group intends to settle its current tax assets and liabilities on a net basis.
Non-current assets (or disposal groups) held for sale and discontinued operations
Non-current assets (or disposal groups) are classified as held for sale if the carrying amount is expected to be recovered
through a sale transaction rather than through continuing use, and provided that the sale is highly probable. The assets are
measured at the lower of their carrying amount and fair value less costs to sell, except for financial assets which are measured
at fair value. Where the fair value less costs to sell is lower than the carrying amount, an impairment is recognised. Any
subsequent increases in fair value less costs to sell which are not in excess of previously recognised impairment losses are
recognised in the Income Statement.
Non-current assets are not depreciated or amortised while they are classified as held for sale and the assets held for sale are
separately presented from other assets on the Statement of Financial Position. Liabilities associated with assets held for sale are
presented separately from other liabilities on the Statement of Financial Position.
A discontinued operation is a component that has been disposed or classified as held for sale, and represents a separate major
line of business or geographical area of operations. The results of discontinued operations are presented separately in the
Income Statement with comparatives restated.
Property, plant and equipment
Property, plant and equipment are carried at cost less accumulated depreciation and accumulated impairment losses. Cost
comprises the aggregate amount paid and the fair value of any other consideration given to acquire the asset, including costs
directly attributable to making the asset capable of operating as intended.
Depreciation is provided on all property, plant and equipment at rates calculated to write off the cost less estimated residual
value based upon estimated useful lives. Estimated residual value and useful lives are reviewed annually and residual values are
based on prices prevailing at the balance sheet date. Depreciation is charged on a straight-line basis over the expected useful
lives as follows:
Leasehold improvements ¼ over the lease term of up to 15 years
Office equipment, fixtures and fittings ¼ over 5 years
Computer and other equipment ¼ over 2, 3 or 5 years
Right-of-use asset ¼ over the lease term of up to 15 years
The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances
indicate the carrying value may not be recoverable, at which point they are written down immediately to their recoverable
amount.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to
arise from the continued use of the asset. The gain or loss arising on derecognition is determined as the difference between the
sale proceeds and carrying amount of the asset, and is immediately recognised in the Income Statement.
Goodwill
Goodwill is stated at cost less any accumulated impairment losses, with the carrying value being reviewed for impairment at
least annually, and whenever events or changes in circumstances indicate that the carrying value may be impaired.
Goodwill is recognised as an asset and is allocated to CGUs by management for purposes of impairment testing. A CGU
represent the smallest identifiable group of assets that generate cash inflows that are largely independent of the cash inflows
from other assets or groups of assets. Where the recoverable amount of a CGU is less than its carrying amount, including
goodwill, an impairment loss is recognised in the Income Statement.
The carrying amount of goodwill allocated to a CGU is taken into account when determining the gain or loss on disposal of a
business unit, or of an operation within it.
142
FINANCIAL STATEMENTS
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Notes to the Financial Statements continued
2. Significant accounting policies continued
Intangible assets
Intangible assets are carried at cost less accumulated amortisation and impairment losses.
Intangible assets acquired separately from a business are carried initially at cost. An intangible asset acquired as part of a
business combination, such as a trade name or customer relationship, is recognised at fair value and identified separately from
goodwill if the asset is separable or arises from contractual or other legal rights and its fair value can be measured reliably.
Development expenditure is recognised as an intangible asset only after all the following criteria are met:
¼ The project’s technical feasibility and commercial viability can be demonstrated,
¼ The availability of adequate technical and financial resources and an intention to complete the project have been
confirmed,and
¼ Probable future economic benefit has been established.
Development expenditure on internally developed intangible assets, excluding internal software development costs, which do
not meet these criteria is taken to the Income Statement in the year in which it is incurred.
Intangible assets with a finite life are amortised over their expected useful lives, as follows:
Internally developed software ¼ straight-line basis over 3 to 5 years
Software and licences ¼ straight-line basis over the contract term of up to 5 years
Trade names ¼ straight-line basis over 2 to 15 years
Customer relationships ¼ straight-line basis over 9 years
Non-compete arrangements ¼ straight-line basis over 5 years
Domain names ¼ straight-line basis over 10 years
The carrying value of intangible assets is reviewed for impairment whenever events or changes in circumstances indicate the
carrying value may not be recoverable. In addition, the carrying value of capitalised development expenditure is reviewed before
being brought into use.
Impairment of non-financial assets
When impairment testing is required, the carrying amounts of the Group’s non-financial assets are reviewed to determine
whether there is any indication of impairment. If any such indication exists (or at least annually for goodwill), the recoverable
amount of the asset is estimated to determine the extent of the impairment loss (if any). Where the asset does not generate
cash flows that are independent from other assets, the Group estimates the recoverable amount of the CGU to which the asset
belongs.
The recoverable amount is the higher of fair value less selling costs and value-in-use. In assessing value-in-use, the estimated
future cash flows are discounted to their present values using a pre-tax discount rate. This rate reflects current market
assessments of the time value of money, as well as the risks specific to the asset to the extent the estimates of future cash flows
have not been adjusted.
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is
reduced to its recoverable amount. Impairment losses are recognised as an expense immediately.
An assessment is made at each balance sheet date as to whether there is any indication that previously recognised impairment
losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated and previously
recognised impairment losses are reversed only if there has been a change in the estimates used to determine the asset’s
recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is
increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been
determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised
as income immediately, although impairment losses relating to goodwill may not be reversed.
Financial instruments
Classification, recognition and measurement
The Group determines the classification of its financial instruments at initial recognition in accordance with the following
categories outlined and re-evaluates this designation annually. When financial instruments are recognised initially, they are
measured at fair value. In the case of financial assets and financial liabilities not at fair value through profit or loss, the fair value
of these assets and/or liabilities is measured net of directly attributable transaction costs. Financial instruments are disclosed in
note 27 of the Financial Statements.
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2. Significant accounting policies continued
(a) Financial assets and liabilities measured at fair value through profit or loss
Financial assets and liabilities measured at fair value through profit or loss are financial assets and liabilities that are not
classified and measured at amortised cost or as fair value through other comprehensive income. The financial assets and
liabilities included in this category are the financial derivative open positions included in trade receivables (due from brokers).
The Group uses derivative financial instruments in order to hedge derivative exposures arising from open client positions, which
are also classified as fair value through profit or loss.
All financial instruments at fair value through profit or loss are carried at fair value with gains or losses recognised in trading
revenue in the Income Statement.
(b) Financial assets measured at amortised cost
Financial assets measured at amortised cost are non-derivative financial assets which are held to collect the contractual cash
flows. The contractual terms of the financial assets give rise to payments on specified dates that are solely payments of principal
amount and interest on the principal amount outstanding. They are included in current assets, except for maturities greater
than 12 months after the end of the reporting period, which are classified as non-current assets. The Group’s financial assets
measured at amortised cost comprise trade receivables, other receivables, cash and cash equivalents and fixed term deposits
that are categorised under financial investments.
Fixed term deposits do not meet the criteria of cash and cash equivalents under IAS 7 as they have a maturity of longer than
three months. Furthermore, the Group is unable to withdraw these deposits before their respective maturity date. Therefore,
these are categorised as financial investments as stated above.
Interest on term deposits is included in finance income using the effective interest rate method. The effective interest rate is
either the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial
instrument. When calculating the effective interest rate, the Group estimates cash flows considering all contractual terms of the
financial instrument but does not consider expected credit losses unless the asset is credit impaired. The calculation includes all
fees and spreads paid or received between parties to the contract that are an integral part of the effective interest rate,
transaction costs, and all other premiums or discounts.
(c) Financial assets measured at fair value through other comprehensive income
Financial assets measured at fair value through other comprehensive income are assets that are held to collect the contractual
cash flows or to be sold. The contractual terms of these assets give rise to payments on specified dates that are solely payments
of principal and interest on the principal amount outstanding. They are included in non-current assets unless the investment
matures or management intend to dispose of them within 12 months of the end of the reporting period. The Group’s fair value
through other comprehensive income financial assets are financial investments (other than fixed term deposits) and financial
assets pledged as collateral.
Unrealised gains or losses, other than loss allowances for expected credit losses, arising from financial investments measured at
fair value through other comprehensive income are reported in equity (in the fair value through other comprehensive income
reserve) and in other comprehensive income, until such investments are sold, collected or otherwise disposed of.
On disposal of an investment, the accumulated unrealised gain or loss included in equity is recycled to the Income Statement
for the period and reported in other income. Gains and losses on disposal are determined using the fair value of the investment
at the date of derecognition.
Interest on financial investments is included in finance income using the effective interest rate method. The effective interest
rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial
instrument. When calculating the effective interest rate, the Group estimates cash flows considering all contractual terms of the
financial instrument but does not consider expected credit losses unless the asset is credit impaired. The calculation includes all
fees and spreads paid or received between parties to the contract that are an integral part of the effective interest rate,
transaction costs, and all other premiums or discounts.
(d) Financial liabilities
The Group’s financial liabilities include trade payables, lease liabilities, borrowings and other payables. These are initially
recognised at fair value less transaction fees. They are subsequently measured at amortised cost using the effective interest
method, excluding the derivative element of trade payables – amounts due from brokers, which is measured at fair value
through profit or loss and recognised as part of trade receivables as detailed in (a) above. The interest expense is calculated
ateach reporting period by applying the effective interest rate, and the resulting charge is reflected in finance costs in the
Income Statement.
144
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IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Notes to the Financial Statements continued
2. Significant accounting policies continued
(e) Determination of fair value
Financial instruments arising from open client positions, financial derivative open positions included in trade receivables (due
from brokers), financial investments (other than fixed term deposits) and financial assets pledged as collateral are stated at fair
value. They are disclosed according to the valuation hierarchy required by IFRS 13 Fair Value Measurement. Fair values are
predominantly determined by reference to third-party market values (bid prices for long positions and offer prices for short
positions) as detailed below:
¼ Level 1: valued using unadjusted quoted prices in active markets for identical financial instruments.
¼ Level 2: valued using techniques where a price is derived based significantly on observable market data. For example, where
an active market for an identical financial instrument to the product offered by the Group to its clients or used by the Group
to hedge its market risk does not exist.
¼ Level 3: valued using techniques that incorporate information other than observable market data that is significant to the
overall valuation
Impairment of financial assets
The impairment charge in the Income Statement includes a loss allowance reflecting the change in expected credit losses.
Expected credit losses are recognised for trade receivables, cash and cash equivalents, other receivables, financial investments
and financial assets pledged as collateral. Expected credit losses are calculated as the difference between the contractual cash
flows that are due to the Group and the cash flows that the Group expects to receive given the probability of default and loss
given default, discounted at the original effective interest rate.
At initial recognition of financial assets, an allowance is made for expected credit losses resulting from default events that are
possible within the next 12 months, except for where the simplified approach is used where an allowance is made for the
lifetime expected credit loss. In the event of a significant increase in credit risk, an allowance is made for expected credit losses
resulting from possible default events over the expected life of the financial asset. The Group applies the simplified approach for
trade receivables and other receivables where the revenue associated with these receivables is recognised in accordance with
IFRS 15 Revenue from Contract with Customers. The Group applies the general approach for all other financial assets.
Financial assets that have not experienced a significant increase in credit risk are categorised as Stage 1 and 12 month
expected credit losses are recognised; financial assets which are considered to have experienced a significant increase in credit
risk since initial recognition are considered to be Stage 2; and financial assets which have defaulted or are otherwise considered
to be credit impaired are allocated to Stage 3.
An assessment of whether credit risk has increased significantly considers changes in the credit rating associated with the
asset, whether contractual payments are more than 30 days past due and other reasonable information demonstrating a
significant increase in credit risk. In accordance with the Group’s internal credit risk management definition, financial
instruments have a low credit risk when they have an external credit rating of investment grade. If no external credit rating is
available, reference is made to the Group’s internal credit risk policy.
Assets are transferred to Stage 3 when an event of default, as defined in the Group’s credit risk management policy, occurs or
where the assets are credit impaired. The Group determines that a default occurs when a payment is 90 days past due for all
assets, except for receivables from clients where it uses 120 days. This is aligned with the Group’s risk management practices.
All changes in expected credit losses subsequent to the assets’ initial recognition are recognised as an impairment loss or gain.
Financial assets are written off, either partially or in full, against the related allowance when the Group has no reasonable
expectations of recovery of the asset. Subsequent recoveries of amounts previously written off decrease the amount of
impairment losses recorded in the Income Statement.
Derecognition of financial assets and liabilities
A financial asset or liability is generally derecognised when the contract that gives rise to it is settled, sold, cancelled or expired.
(a) Financial assets
A financial asset is derecognised when the right to receive cash flows from the asset has expired; or the Group retains the right
to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party
under a pass-through arrangement; or the Group has transferred its right to receive cash flows from the asset and either has
transferred substantially all the risks and rewards of the asset, or has neither transferred nor retained substantially all the risks
and rewards of the asset, but has transferred control of the asset.
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Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
2. Significant accounting policies continued
When the Group has transferred its right to receive cash flows from an asset and has neither transferred nor retained
substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of
the Group’s continuing involvement in the asset. Continuing involvement that takes the form of a guarantee over the transferred
asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the
Group could be required to repay.
(b) Financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires. Where an existing
financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability
are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the
recognition of a new liability, whereby the difference in the respective carrying amounts together with any costs or fees
incurred are recognised in profit or loss.
(c) Offsetting financial instruments
Assets or liabilities resulting from gains or losses on open positions are carried at fair value. Amounts due from or to clients and
amounts due from and to brokers are offset, with the net amount reported in the Statement of Financial Position. Amounts are
offset where there is a legally enforceable right to offset the recognised amounts, and there is an intention to settle on a net
basis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future
events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the
Group or the counterparty.
Trade payables and receivables
Trade receivables represent balances with counterparties and clients where the combination of cash held on account and the
valuation of financial derivative open positions results in an amount due to the Group. Trade receivables balances also include
commissions and required deposits due from the Group’s broker-dealer counterparties.
Trade payables represent balances with counterparties and clients where the combination of cash held on account and the
valuation of financial derivative open positions result in an amount payable by the Group.
For trade receivables under IFRS 15 Revenue from Contracts with Customers that do not contain a significant financing
element, the Group has applied the simplified approach for measuring impairment. For all other trade receivables, the general
approach has been applied for measuring impairment. The expected lifetime credit loss is recognised at initial recognition of
the financial asset, with the loss allowance calculated by reference to an ageing debt profile, adjusted for forward-looking
information. Trade receivables are written off when there is objective evidence of non-collectability or when an event of
defaultoccurs.
Other assets
Other assets represent rights to cryptocurrency assets controlled by the Group. The Group offers various cryptocurrency-
related products that can be traded on its platform. The Group purchases and sells cryptocurrency assets as part of its
hedgingactivity.
The Group holds cryptocurrency assets for trading in the ordinary course of its business, effectively acting as a commodity
broker-dealer in respect of the underlying cryptocurrency asset because the salient features of these assets are, in economic
terms, consistent with certain commodities under IAS 2 Inventories, 3(b). The assets are recognised on trade date and
measured at fair value less costs to sell, with changes in valuation being recorded in the Income Statement in the period in
which they arise. Cryptocurrency assets are not financial instruments and they are categorised as non-financial assets.
Other receivables
Other receivables are financial assets which give rise to payments on specified dates that are solely payments of principal
amount and interest on the principal amount outstanding. They are assets that have not been designated as fair value through
profit or loss. Such assets are carried at amortised cost using the effective interest method if the time value of money
issignificant.
For other receivables under IFRS 15 Revenue from Contracts with Customers that do not contain a significant financing
element, the Group applies a simplified approach for measuring impairment, similar to that as trade receivables.
Prepayments
Prepayments are assets with fixed or determinable payments made in advance for services or goods. They do not qualify as
financial assets and are amortised over the period in which the economic benefit is expected to be consumed.
146
FINANCIAL STATEMENTS
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Notes to the Financial Statements continued
2. Significant accounting policies continued
Cash and cash equivalents
Cash comprises of cash on hand and demand deposits which may be accessed within 90 days without penalty. Cash
equivalents comprise of short-term highly liquid investments that are readily convertible into known amounts of cash and which
are subject to an insignificant risk of changes in value. This includes money market funds.
The Group holds money on behalf of clients in accordance with the client money rules of the UK Financial Conduct Authority
(FCA) and other regulatory bodies. Such monies are classified as either cash and cash equivalents or segregated client funds in
accordance with the relevant regulatory requirements or legal protections attached to the monies.
The majority of the Group’s cash balances are held with investment-grade banks. The Group considers the risk of default, and
how adverse changes in economic and business conditions might impact the ability of the banks to meet their obligations. The
Group assesses the expected credit losses on cash and cash equivalents on a forward-looking basis and if there has been a
significant increase in credit risk since initial recognition. At 31 May 2022, the Group held £236.7 million (31 May 2021: £161.3
million) of segregated client funds for customers of the Group’s Japanese subsidiary, IG Securities Limited. Under local Japanese
law, the Group is liable for any credit losses suffered by clients on the segregated client money balance.
Money market funds are mutual funds that invest in a diversified range of money market instruments, such as government
owned instruments and short-term debt from highly credit rated counterparties. Money market funds are presented within
cash and cash equivalents as they are short-term highly liquid investments that are readily convertible into known amounts of
cash, they are subject to an insignificant risk of changes in value and they can be withdrawn without penalty. At 31 May 2022,
the Group’s cash and cash equivalents balance included £437.5 million (31 May 2021: £nil) of money market funds.
The Group’s Swiss banking subsidiary, IG Bank S.A., is required to protect customer deposits under the FINMA Privileged
Deposit Scheme. At 31 May 2022, IG Bank S.A. was required to hold £35.1 million (31 May 2021: £36.5 million) in satisfaction of
this requirement. This amount, which represents restricted cash, is included in cash and cash equivalents.
Segregated client funds are held in segregated client money accounts which restrict the Group’s ability to control the monies
and accordingly are held off-balance sheet. The amount of segregated client funds held at 31 May 2022 was £2,577.9 million
(31 May 2021: £2,710.3 million). The return received on managing segregated client funds is included within net
operatingincome.
Title transfer funds are held by the Group under a Title Transfer Collateral Arrangement (TTCA) by which a client agrees that full
ownership of such monies is unconditionally transferred to the Group. Title transfer funds are accordingly held on the
Statement of Financial Position with a corresponding liability to clients within trade payables.
Other payables
Non-derivative financial liabilities are recognised initially at fair value and carried at amortised cost using the effective interest
rate method if the time value of money is significant.
Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable
that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated.
Contingent liabilities
Contingent liabilities, which include certain guarantees and letters of credit pledged as collateral security, and contingent
liabilities related to legal proceedings or regulatory matters, are not recognised in the Financial Statements but are disclosed
unless the probability of settlement is remote.
147
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Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
2. Significant accounting policies continued
Borrowings
Borrowings are initially recognised at fair value and subsequently at amortised cost using the effective interest rate method with
any difference between net proceeds and the redemption value being recognised in the Income Statement over the period of
borrowings.
Debt securities in issue
Debt securities in issue are recognised initially at fair value. Subsequently, debt securities are measured at amortised cost, with
any difference between net proceeds and the redemption value being recognised in the Income Statement over the lifetime of
the security using the effective interest rate method. Transaction fees are recognised on the Statement of Financial Position,
and amortised over the expected life of the security.
Share capital
(a) Classification of shares as debt or equity
When shares are issued, any component that creates a financial liability of the Group is presented as a liability on the balance
sheet; measured initially at fair value net of transaction costs and subsequently at amortised cost until extinguished on
conversion or redemption. Dividends paid are charged as an interest expense in the Income Statement.
Equity instruments issued by the Company are recorded as the proceeds received, net of direct issue costs. Equity instruments
are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract
that evidences a residual interest in the assets of the Group after deducting all of its liabilities.
(b) Own shares held in Employee Benefit Trusts
Shares held in Employee Benefit Trusts for the purposes of employee share schemes are classified as a deduction from
shareholders’ equity and are recognised at cost. Consideration received for the sale of such shares is recognised in equity,
withany difference between the proceeds from the sale and the cost being taken to reserves. No gain or loss is recognised
inthe Income Statement on the purchase, sale, issue or cancellation of equity shares.
(c) Share-based payments
The Company operates four employee share plans: a share-incentive plan, a sustained performance plan, a medium-term
incentive plan and a long-term incentive plan. For market-based vesting conditions, the cost of these awards is measured at fair
value calculated using option pricing models and are recognised as an expense in the Income Statement on a straight-line basis
over the vesting period based on the Company’s estimate of the number of shares that will vest.
For non-market-based vesting conditions, the cumulative expense is calculated representing the extent to which the vesting
period has expired and management’s best estimate of the achievement or otherwise of non-market conditions determining
the number of equity instruments that will ultimately vest. The movement in cumulative expense since the previous balance
sheet date is recognised in the Income Statement as part of operating expenses, with a corresponding credit to equity.
The grant by the Company of options over its equity instruments to employees of the subsidiary undertakings in the Group is
treated as a capital contribution. The fair value of the employee services received is recognised over the vesting period as an
increase in the investment in subsidiary undertakings, with a corresponding credit to equity. Upon awards vesting, the cost of
awards is transferred from the share-based payments reserve into retained earnings.
148
FINANCIAL STATEMENTS
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Notes to the Financial Statements continued
3. Segmental analysis
The Executive Directors are the Group’s Chief Operating Decision Maker (CODM). Management has determined
thereportablesegments based on the information reviewed by the CODM for the purposes of allocating resources
andassessingperformance.
The Group manages market risk and a number of other activities on a Group-wide portfolio basis and accordingly a large
proportion of costs are incurred centrally. These central costs are not allocated to individual segments for decision-making
purposes for the CODM, and, accordingly, these costs have not been allocated to segments. Additionally, the Group’s assets
and liabilities are not allocated to individual segments and not reported as such for decision making purposes to the CODM.
Therefore, the segmental analysis shown below does not include a measure of profitability, nor a complete segmented balance
sheet, as this would not reflect the information which is received by the CODM on a regular basis.
Net trading revenue by reportable segment
Net trading revenue represents trading revenue that the Group generates from client trading activity after deducting
introducing partner commissions. The CODM uses net trading revenue as the primary measure of performance of the various
segments of the Group. The CODM considers business performance from a product perspective, split into OTC derivatives,
exchange traded derivatives and stock trading and investments. The segmental analysis shown below by product aggregates
the different geographical locations given the products are economically similar in nature. Revenue from OTC derivatives
isderived from the UK, EU, EMEA – Non-EU, Australia, Singapore, Japan, Emerging Markets and the US. Exchange traded
derivatives revenue derives from tastytrade and the Spectrum business located in the US and the EU, whereas stock trading
andinvestments revenue derives from the UK and Australia. The segmental analysis does not include a measure of profitability,
nor a segmented Statement of Financial Position, as this would not reflect the information which is received by the CODM.
The segmental breakdown of net trading revenue is as follows:
Year ended
31 May 2022
£m
Year ended
31 May 2021
(Restated)
1
£m
Net trading revenue by product:
OTC derivatives 817.3 790.3
Exchange traded derivatives 121.2 8.3
Stock trading and investments 33.8 38.7
Total net trading revenue from continuing operations 972.3 837.3
Net trading revenue from discontinued operations 9.4 16.1
1 The FY21 comparatives have been restated to present separately the results of discontinued operations. Refer to note 31 for further details.
The CODM also considers business performance based on geographical location. This geographical split reflects the location of
the office that manages the underlying client relationship. Net trading revenue represents an allocation of the total net trading
revenue that the Group generates from client trading activity.
149
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Shareholder and
Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
3. Segmental analysis continued
Year ended
31 May 2022
£m
Year ended
31 May 2021
(Restated)
£m
Net trading revenue by geography:
UK 365.3 346.8
US 128.6 15.1
EU 112 .9 108.0
Japan 98.5 68.7
Australia 96.2 128.0
Singapore 74.1 75.3
EMEA – Non-EU 53.5 60.6
Emerging markets 43.2 34.8
Total net trading revenue 972.3 8 37.3
1 The FY21 comparatives have been restated to present separately the results of discontinued operations. Refer to note 31 for further details.
The Group does not derive more than 10% of revenue from any one single client. The UK geographic segment, and the OTC
derivatives segment, includes a £5.8 million gain (31 May 2021: £7.9 million loss) arising from financing of the tastytrade
acquisition, as set out in note 30.
The segmental breakdown of non-current assets excluding financial investments, financial assets pledged as collateral and
deferred income tax assets, based on geographical location, is as follows:
Year ended
31 May 2022
£m
Year ended
31 May 2021
£m
UK 133.8 129.1
US 795.1 30.0
EU 5.5 6.6
EMEA – Non-EU 7.3 5.5
Australia 0.8 1.3
Japan 0.8 4.9
Emerging Markets 3.4 1.2
Total non-current assets 946.7 178.6
4. Operating costs
Note
Year ended
31 May 2022
£m
Year ended
31 May 2021
(Restated)
1
£m
Employee-related expenses:
Fixed remuneration 151.5 126.9
Variable remuneration 62.7 50.6
214.2 177.5
Advertising and marketing 87.2 67. 4
Premises-related costs 9.1 6.3
IT, market data and communications 45.1 30.7
Legal and professional costs 19.6 31.8
Regulatory fees 12.9 9.2
Depreciation and amortisation 12,13 56.5 24.8
Other costs 54.6 42.8
Total operating costs 499.2 390.5
1 The FY21 comparatives have been restated to present separately the results of discontinued operations. Refer to note 31 for further details.
Included in premises-related costs is £0.5 million relating to short-term operating leases which do not meet the criteria to be
capitalised as right-of-use assets (year ended 31 May 2021: £0.1 million).
150
FINANCIAL STATEMENTS
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Notes to the Financial Statements continued
5. Auditors’ remuneration
Year ended
31 May 2022
£m
Year ended
31 May 2021
£m
Audit fees
Parent 1.2 0.7
Subsidiaries 1.1 0.7
Total audit fees 2.3 1.4
Audit related fees
Services supplied pursuant to legislation 0.6 0.6
Other audit related assurance services – 0.1
Total audit related fees 0.6 0.7
Non-audit fees
Other services 0.3 0.1
Total non-audit fees 0.3 0.1
Audit related fees include services that are specifically required of the Group’s Auditors through legislative or regulatory
requirements, controls assurance engagements required of the Auditors by the regulatory authorities in whose jurisdiction the
Group operates and other audit related assurance services.
6. Staff costs
Staff costs for the year, including Directors, were as follows:
Year ended
31 May 2022
£m
Year ended
31 May 2021
(Restated)
1
£m
Wages and salaries, performance-related bonus and equity-settled share-based payment awards 185.1 152.4
Social security costs 20.2 17.4
Other pension costs 8.9 7.7
214.2 177.5
1 The FY21 comparatives have been restated to present separately the results of discontinued operations. Refer to note 31 for further details.
The Group does not operate any defined benefit pension schemes. Other pension costs includes employee-nominated
payments to defined contribution schemes and Company contributions.
The Directors’ remuneration for the years ended 31 May 2022 and 31 May 2021 is set out in the Directors’ Remuneration Report
on page 83.
The average monthly number of employees, including Directors, split into the key activity areas was as follows:
Year ended
31 May 2022
Year ended
31 May 2021
Prospect acquisition 356 311
Sales and client management 257 277
Technology 895 759
Operations 545 386
Business administration 371 293
2,424 2,026
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IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
7. Finance income
Year ended
31 May 2022
£m
Year ended
31 May 2021
£m
Bank interest receivable 1.5 0.6
Interest receivable on cash held at brokers 0.8 0.6
Interest accretion on financial investments 0.4 0.9
Interest receivable on money market funds 0.3 –
Other interest 0.4 –
3.4 2.1
8. Finance costs
Year ended
31 May 2022
£m
Year ended
31 May 2021
£m
Interest and fees on issued debt securities 5.3 –
Term loan interest and fees 3.5 2.6
Revolving credit facility interest and fees 1.6 0.5
Interest payable to brokers 2.7 1.6
Interest payable on lease liabilities 0.6 0.6
Bank interest payable 1.1 0.6
14.8 5.9
9. Taxation
Tax on profit on ordinary activities
Tax charged in the income statement:
Year ended
31 May 2022
£m
Year ended
31 May 2021
(Restated)
1
£m
Current income tax:
UK corporation tax 79.1 80.9
Non-UK corporation tax 39.3 6.4
Adjustment in respect of prior years (6.1) (6.0)
Total current income tax 112 .3 81.3
Deferred income tax:
Origination and reversal of temporary differences (1.6) (2.0)
Adjustment in respect of prior years (1.0) (0.4)
Impact of change in tax rates on deferred tax balances 0.3 (0.5)
Total deferred income tax (2.3) (2.9)
Tax expense in the Income Statement attributable to continuing operations 80.9 77.4
Tax expense attributable to discontinued operations 29.1 1.0
Tax not charged to income statement:
Tax recognised in other comprehensive income 0.5 –
Tax recognised directly in equity (0.5) (0.2)
1 The FY21 comparatives have been restated to present separately the results of discontinued operations. Refer to note 31 for further details.
152
FINANCIAL STATEMENTS
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Notes to the Financial Statements continued
9. Taxation continued
Reconciliation of the total tax charge
The standard rate of corporation tax in the UK for the year ended 31 May 2022 is 19.0% (31 May 2021: 19.0%). Taxation outside
the UK is calculated at the rates prevailing in the relevant jurisdictions. The tax expense in the income statement for the year can
be reconciled as set out below:
Year ended
31 May 2022
£m
Year ended
31 May 2021
£m
Profit before taxation
From continuing operations 477.0 446.0
From discontinued operations 136.9 4.3
Total profit before tax 613.9 450.3
Profit multiplied by the UK standard rate of corporation tax of 19.0%
(year ended 31 May 2021: 19.0%) 116 .7 85.6
Higher taxes on overseas earnings 7.9 1.4
Adjustment in respect of prior years (8.2) (6.4)
Expenses not deductible for tax purposes 0.8 4.6
Patent Box deduction (7.0) (4.7)
Impact of change in tax rates on deferred tax balances 0.3 (0.5)
Recognition and utilisation of losses previously not recognised (1.2) (2.7)
Current year losses not recognised as deferred tax assets 0.7 1.1
Total tax expense attributable to: 110.0 78.4
Continuing operations 80.9 77.4
Discontinued operations 29.1 1.0
The effective tax rate for the year is 17.9% (year ended 31 May 2021: 17.4%).
The Finance Act 2021 passed into legislation in May 2021 and increased the main rate of UK corporation tax from 19% to 25%
effective from 1 April 2023. The impact of these changes on deferred tax has been assessed and deferred tax assets and
liabilities have been measured at the tax rates that are expected to apply when the related asset is realised or liability settled.
Deferred income tax assets
31 May 2022
£m
31 May 2021
£m
Tax losses available for offset against future profits 3.7 4.0
Temporary differences arising on share-based payments 3.7 3.1
Temporary differences arising on fixed assets 2.1 2.0
Other temporary differences 8.0 3.8
17.5 12.9
Deferred income tax liabilities
31 May 2022
£m
31 May 2021
£m
Temporary differences arising on business combinations (62.9) -
Temporary differences arising on fixed assets (0.2) (0.3)
Other temporary differences (4.1) (0.5)
(67.2) (0.8)
Deferred income tax recovery
31 May 2022
£m
31 May 2021
£m
Deferred tax assets to be recovered within 12 months 5.4 3.7
Deferred tax assets to be recovered after 12 months 12.1 9.2
17.5 12.9
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IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
9. Taxation continued
Deferred income tax settlement
31 May 2022
£m
31 May 2021
£m
Deferred tax liabilities to be settled within 12 months (7.7) (0.3)
Deferred tax liabilities to be settled after 12 months (59.5) (0.5)
(67.2) (0.8)
The recognised deferred tax asset reflects the extent to which it is considered probable that future taxable profits can be offset
against the tax losses carried forward and sufficient capital gains arising in the future.
Share-based payment awards have been charged to the income statement but are not allowable as a tax deduction until the
awards vest. The excess of the expected tax relief in future years over the amount charged to the income statement is
recognised as a credit directly to equity.
Unrecognised deferred tax assets
31 May 2022 31 May 2021
Gross
unrecognised
losses for tax
purposes
£m
Tax value
of loss
£m Expiry date
Gross
unrecognised
losses for tax
purposes
£m
Tax value
of loss
£m Expiry date
Overseas trading losses 14.6 3.9 N/A 14.4 4.2 N/A
UK capital losses 23.5 5.9 N/A 23.5 5.9 N/A
38.1 9.8 37. 9 10.1
The recoverability of unrecognised deferred tax assets is dependent on sufficient taxable profits of the entities.
The movement in the deferred income tax assets is as follows:
Year ended
31 May 2022
£m
Year ended
31 May 2021
£m
At the beginning of the year 12.9 11. 5
Amounts arising on acquisitions in the year 7. 4 –
Tax (charged)/credited to the Income Statement (2.2) 3.0
Tax charged directly to equity (0.3) (0.6)
Impact of movement in foreign exchange rates – (1.0)
Reallocations between deferred tax assets and liabilities (0.3) –
At the end of the year 17.5 12.9
The movement in the deferred income tax liability is as follows:
Year ended
31 May 2022
£m
Year ended
31 May 2021
£m
At the beginning of the year (0.8) (0.7)
Amounts arising on acquisitions in the year (66.1) –
Tax credited/(charged) to the Income Statement 4.5 (0.1)
Tax charged to other comprehensive income (0.5) –
Impact of movement in foreign exchange rates (4.6) –
Reallocations between deferred tax assets and liabilities 0.3 –
At the end of the year (67.2) (0.8)
154
FINANCIAL STATEMENTS
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Notes to the Financial Statements continued
9. Taxation continued
Factors affecting the tax charge in future years
Factors that may affect the Group’s future tax charge include the geographic location of the Group’s earnings, the tax rates in
those locations, changes in tax legislation, the recognition of previously unrecognised tax losses and the resolution of open tax
issues. The Group’s future tax charge may also be impacted by changes in the Group’s business activities, client composition
and regulatory status, which could impact the Group’s exemption from the UK Bank Corporation Tax Surcharge.
The calculation of the Group’s total tax charge involves a degree of estimation and judgement with respect to the recognition of
deferred tax assets, which are dependent on the Group’s estimation of future profitable income, transfer pricing and of certain
items whose tax treatment cannot be finally determined until resolution has been reached with the relevant tax authority. The
Group operates in a number of jurisdictions worldwide, and tax laws in those jurisdictions are themselves subject to change.
The Group determines its tax liability by taking into account its tax risks and it makes provision for those matters where it is
probable that a tax liability will arise. Tax payable may ultimately be materially more or less than the amount already accounted
for.
10. Earnings per ordinary share
Basic earnings per share is calculated by dividing the profit for the year attributable to ordinary equity holders of the parent by
the weighted average number of ordinary shares in issue during the year, excluding shares held as own shares in the Group’s
Employee Benefit Trusts. Diluted earnings per share is calculated using the same profit figure as that used in basic earnings per
share and by adjusting the weighted average number of ordinary shares assuming the vesting of all outstanding share scheme
awards and that vesting is satisfied by the issue of new ordinary shares.
Year ended
31 May 2022
£m
Year ended
31 May 2021
£m
Earnings attributable to owners of the parent 503.9 371.9
Weighted average number of shares:
Basic 426,289,898 369,181,516
Dilutive effect of share-based payments 3,614,236 3,222,900
Diluted 429,904,134 372,404,416
Year ended
31 May 2022
Year ended
31 May 2021
(Restated)
Basic earnings per ordinary share 118 . 2p 110.7p
– Attributable to continuing operations 92.9p 99.8p
– Attributable to discontinued operations 25.3p 0.9p
Diluted earnings per ordinary share 117. 2p 99.9p
– Attributable to continuing operations 92.1p 99.0p
– Attributable to discontinued operations 25.1p 0.9p
11. Dividends paid and proposed
Year ended
31 May 2022
£m
Year ended
31 May 2021
£m
Final dividend for 31 May 2021 at 30.24p per share (FY20: 30.24p) 130.3 111. 8
Interim dividend for 31 May 2022 at 12.96p per share (FY21: 12.96p) 55.9 47. 9
186.2 159.7
The final dividend for the year ended 31 May 2022 of 31.24 pence per share was proposed by the Board on 20 July 2022 and
has not been included as a liability at 31 May 2022. This dividend will be paid on 20 October 2022, following approval at the
Company’s AGM, to those members on the register at the close of business on 23 September 2022.
155
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IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
12. Property, plant and equipment
Leasehold
improvements
£m
Office
equipment,
fixtures and
fittings
£m
Computer
and other
equipment
£m
Right-of-use
assets
£m
Total
£m
Cost:
At 1 June 2020 23.0 6.9 41.8 36.2 107. 9
Additions 1.0 0.1 8.0 0.3 9.4
Impact of movement in foreign exchange rates (0.4) (0.3) (0.7) (2.0) (3.4)
At 31 May 2021 23.6 6.7 49.1 34.5 113 . 9
Additions 0.1 0.1 8.3 8.4 16.9
Additions – business acquisition 0.8 0.1 1.3 0.7 2.9
Disposals – discontinued operations – – (3.4) (0.8) (4.2)
Other disposals – (0.1) (0.6) (5.6) (6.3)
Classified as assets held for sale (0.7) – – (1.5) (2.2)
Impact of movement in foreign exchange rates 0.3 0.3 0.6 0.9 2.1
At 31 May 2022 24.1 7.1 55.3 36.6 123.1
Accumulated depreciation:
At 1 June 2020 17. 2 4.8 32.6 6.9 61.5
Charge for the year 1.4 0.6 6.1 6.9 15.0
Impact of movement in foreign exchange rates (0.1) (0.1) (0.4) (0.6) (1.2)
At 31 May 2021 18.5 5.3 38.3 13.2 75.3
Charge for the year 1.9 1.0 7. 8 7.6 18.3
Disposal – discontinued operations – – (2.5) (0.2) (2.7)
Other disposals – (0.1) (0.5) (3.3) (3.9)
Classified as assets held for sale (0.3) – – (0.7) (1.0)
Impact of movement in foreign exchange rates 0.3 – 0.1 0.1 0.5
At 31 May 2022 20.4 6.2 43.2 16.7 86.5
Net book value – 31 May 2021 5.1 1.4 10.8 21.3 38.6
Net book value – 31 May 2022 3.7 0.9 12.1 19.9 36.6
156
FINANCIAL STATEMENTS
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Notes to the Financial Statements continued
13. Intangible assets
Customer
relationships
£m
Trade
Names
£m
Non-compete
agreements
£m
Internally
developed
software
£m
Domain
names
£m
Software and
licences
£m
Total
£m
Cost:
At 1 June 2020 – – – 40.9 37.7 28.1 106.7
Additions – – – 3.3 – 3.6 6.9
Disposals – – – – – (0.2) (0.2)
Impact of movement in
foreign exchange rates – – – 0.1 (4.3) (0.3) (4.5)
At 31 May 2021 – – – 44.3 33.4 31.2 108.9
Additions – – – 6.1 – 2.9 9.0
Additions – business
acquisition 163.5 56.9 28.8 14.3 – – 263.5
Disposals – discontinued
operations – – – (0.6) – (0.7) (1.3)
Other disposals – – – (1.5) – – (1.5)
Impact of movement in
foreign exchange rates 15.9 5.5 2.8 1.5 3.6 0.2 29.5
At 31 May 2022 179.4 62.4 31.6 64.1 37.0 33.6 408.1
Accumulated amortisation:
At 1 June 2020 – – – 27.7 15.4 24.5 6 7. 6
Charge during the year – – – 4.7 3.5 2.5 10.7
Disposals – discontinued
operations – – – – – (0.2) (0.2)
Impact of movement in
foreign exchange rates – – – (0.1) (1.7) (0.1) (1.9)
At 31 May 2021 – – – 32.3 17. 2 26.7 76.2
Charge during the year 16.8 3.6 5.5 6.8 3.5 3.0 39.2
Disposal – discontinued
operations – – – (0.4) – (0.5) (0.9)
Other disposals – – – (1.5) – – (1.5)
Impact of movement in
foreign exchange rates 0.7 0.1 0.3 0.2 1.6 0.1 3.0
At 31 May 2022 17.5 3.7 5.8 37. 4 22.3 29.3 116.0
Net book value –
31 May 2021 – – – 12.0 16.2 4.5 32.7
Net book value –
31 May 2022 161.9 58.7 25.8 26.7 14.7 4.3 292.1
14. Financial investments and financial assets pledged as collateral
Year ended
31 May 2022
£m
Year ended
31 May 2021
£m
UK Government securities 351.1 3 42.1
Term deposits 45.0 –
396.1 342.1
Split as:
Non-current portion 160.1 188.7
Current portion 236.0 153.4
396.1 342.1
Of the UK Government securities, £289.9 million (31 May 2021: £256.0 million) is held at brokers to satisfy margin requirements.
The remaining balance is held to meet regulatory liquidity requirements.
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15. Goodwill
The movement in the goodwill for the year is as follows:
Cost or valuation
31 May 2022
£m
31 May 2021
£m
At the beginning of the year 107. 3 10 8.1
Additions – business acquisition 462.4 –
Disposals (13.4) –
Impact of foreign exchange movement 48.4 (0.8)
At the end of the year 604.7 107. 3
Goodwill has been allocated for impairment testing purposes to cash-generating units (CGUs) as follows:
31 May 2022
£m
31 May 2021
£m
US (tastytrade) 502.8 –
UK 100.9 100.9
US (Nadex) – 5.3
South Africa 0.9 1.0
Australia 0.1 0.1
604.7 107. 3
Goodwill arose as follows:
¼ US (tastytrade) – from the acquisition of tastytrade on 28 June 2021. As part of the transaction, the Group acquired an
investment in Small Exchange, which was considered an operation within the US (tastytrade) CGU. The Group sold its interest
in Small Exchange during the year and a portion of the US (tastytrade) goodwill was allocated to it and disposed of.
¼ UK – from the reorganisation of the UK business on 5 September 2003.
¼ US (Nadex) – from the acquisition of Nadex previously recognised was disposed of during the year. Refer to note 31 for
further details.
¼ South Africa – from the acquisition of Ideal CFDs on 1 September 2010.
¼ Australia – from the acquisition of the non-controlling interest in IG Australia Pty Limited in the year ended 31 May 2006
.
Impairment testing
The Group’s goodwill balance has been subject to a full impairment assessment and there has not been any impairment
recognised for the year ended 31 May 2022 (31 May 2021: £nil). For the purposes of the Group’s impairment testing of goodwill,
the carrying amount of each CGU is compared to the estimated recoverable amount of the relevant CGU and any deficits are
considered impairments requiring recognition in the year.
The carrying amount of a CGU includes only those assets that can be attributed directly to it, or allocated on a reasonable and
consistent basis.
The US (tastytrade) CGU carrying value includes the investment in associate held in relation to Zero Hash Holdings Limited.
There are no cash flows included within the future cash flow projections relating to this investment. As Zero Hash forms part of
the US (tastytrade) CGU, the Group disposed of £2.2 million goodwill following partial sale of its holding in Zero Hash. Refer to
note 32 for further details relating to the disposal.
The estimated recoverable amount for each CGU is based upon the value-in-use (VIU) of each CGU. For all CGUs, the estimate
of the recoverable amount was higher than the carrying value.
Key assumptions used in the calculation of the recoverable amount of the CGUs
The key assumptions for the VIU calculations are those regarding regional long-term growth rates, future cash flow projections,
and discount rates.
Regional long-term growth:
Regional long-term growth is used to extrapolate the cash flows to perpetuity for each CGU. After a management forecast
period of four years, a terminal growth rate of 2.0% (31 May 2021: 2.0%) has been applied to the cash flows to derive
aterminalvalue.
158
FINANCIAL STATEMENTS
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Notes to the Financial Statements continued
15. Goodwill continued
Future cash flow projections:
The future cash flow projections are based on the most recent financial forecasts considered for each CGU which cover a four
year period. These cash flow projections comprise of revenue, structural costs base and capital expenditure. Projected revenue
is based on assumptions relating to client acquisition and trading activity, and assumptions on interest earned on client funds.
The projected costs are based on assumptions relating to revenue-related costs, including trading and client transaction fees,
and structural costs. The projected profitability takes into account historical performance and the Group’s knowledge of the
current market, together with the Group’s views on the future achievable growth.
Discount rates:
The discount rates used to calculate the recoverable amount of each CGU are based on a post tax weighted average cost of
capital (WACC) which is specific to each geographical region. The discount rate depends on a number of inputs reflecting the
current market assessment of the time value of money, determined by external market information, and inputs relating to the
risks associated with the cash flow of each individual CGU which are subject to management’s judgement.
The post-tax WACC is grossed up to a pre-tax discount rate. The pre-tax discount rate applied to calculate the recoverable
amount of each CGU is as follows:
31 May 2022 31 May 2021
US (tastytrade) 17.5% –
UK 12.0% 10.0%
US (Nadex) – 12.0%
Australia 13.0% 12.0%
South Africa 18.0% 15.0%
Sensitivity to changes in key assumptions
The VIU calculations have been subject to a sensitivity analysis reflecting reasonable changes in individual key assumptions. The
most significant goodwill balance recognised by the Group relates to the US (tastytrade) CGU. The table below shows the
reduction in the recoverable amount and where relevant the associated potential impairment arising from reasonable changes
in key assumptions used in the US (tastytrade) impairment testing:
US (tastytrade)
Assumption Sensitivity applied
Reduction in recoverable amount
£m
Impairment
£m
Long-term growth rate 0.5% decrease 27.7 Nil
EBITDA 20% decrease 185.4 70.4
Discount rates 1% increase (post-tax) 72.6 Nil
The assumptions that would result in the recoverable amount equalling the carrying value of the US (tastytrade) CGU are:
Long-term growth rate (0.5)%
EBITDA margin 13% underperformance
Discount rates 19.8%
For all other goodwill balances, there is sufficient headroom in the recoverable amount of the CGU based on the assumptions
made, and there is not considered to be any reasonably likely scenario under which material impairment could be expected to
occur based on the testing performed.
159
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16. Trade receivables
31 May 2022
£m
31 May 2021
£m
Amounts due from brokers 381.0 424.3
Own funds in client money 85.5 63.3
Amounts due from clients 3.0 3.3
469.5 490.9
Amounts due from brokers represent balances with brokers and execution partners where the combination of cash held
onaccount and the valuation of financial derivative open positions, or unsettled trade receivables, results in an amount due
toGroup.
Own funds in client money represent the Group’s own cash held in segregated client funds, in accordance with the UK’s
Financial Conduct Authority (FCA) CASS rules and similar rules of other regulators in whose jurisdiction the Group operates
andincludes £7.6 million (31 May 2021: £9.2 million) to be transferred to the Group on the following business day.
Amounts due from clients arise when a client’s total funds held with the Group are insufficient to cover any trading losses
incurred by the client or when a client utilises a trading credit limit. Amounts due from clients are stated net of an allowance
forimpairment.
17. Other assets
Other assets are cryptocurrency assets and rights to cryptocurrency assets, which are owned and controlled by the Group for
the purpose of hedging the Group’s exposure to clients’ cryptocurrency trading positions. The Group holds rights to
cryptocurrency assets on exchange and in vaults as follows:
31 May 2022
£m
31 May 2021
£m
Exchange 1.8 13.8
Vaults 12.4 16.5
14.2 30.3
Other assets are measured at fair value less costs to sell. Other assets are level 2 assets in accordance with the fair value
hierarchy (note 27).
18. Borrowings and debt securities in issue
In June 2021, the Group drew down on a £150.0 million term loan to finance the tastytrade acquisition, taking the total
committed term loan facilities to £250.0 million.
The Group subsequently performed a debt refinancing exercise and implementation of a long term funding structure, which
was completed in November 2021. The refinancing involved the following:
¼ Issue of £299.2 million 3.125% senior unsecured bonds due in 2028
¼ A new £300.0 million committed revolving credit facility, with an initial maturity of three years
¼ Repayment and cancellation of the Group’s existing £125.0 million revolving credit facilities and £250.0 million term loan
facilities
The issued debt has been recognised at fair value less transaction fees. As at 31 May 2022, £2.0 million unamortised
arrangement fees are recognised on the Statement of Financial Position, with £1.0 million unamortised fees relating to the
repaid term loans expensed to the Income Statement in the year. Unamortised arrangements fees of £1.6 million in relation to
the new revolving credit facility have been recognised on the Statement of Financial Position.
The Group has the option to request an increase in the revolving credit facility size to £400.0 million and to request two maturity
extensions of one year each, all subject to bank approval. Following this refinancing exercise, total available credit facilities have
risen from £375.0 million as at 31 May 2021 to £600.0 million as at 31 May 2022, with the potential to increase to £700.0 million
if the new revolving credit facility is increased in size.
Under the terms of the new revolving credit facility agreement, the Group is required to comply with financial covenants
covering maximum levels of leverage and debt to equity. The Group has complied with all covenants throughout the
reportingperiod.
160
FINANCIAL STATEMENTS
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Notes to the Financial Statements continued
19. Lease liabilities
The liability represents the obligation to make payments relating to leasing of premises. The table below shows the maturity
analysis of these lease liabilities as at the balance sheet date.
31 May 2022
£m
31 May 2021
£m
Future minimum payments due:
Within one year 8.9 6.7
After one year but not more than five years 13.2 15.5
After more than five years 0.6 0.9
22.7 23.1
In addition to the £22.7 million lease liability (31 May 2021: £23.1 million), the Group has £0.3 million lease commitments under
non-cancellable operating leases which are not capitalised as right-of-use assets (31 May 2021: £0.1 million). Included within this
balance is a £0.8 million lease liability relating to lease assets classified as held for sale.
Please refer to note 28 below for the maturity analysis of the undiscounted cash flows for non-cancellable leases.
20. Trade payables
31 May 2022
£m
31 May 2021
£m
Client funds:
UK and Ireland 359.0 222.0
US 34.1 21.6
EU 71.6 46.6
EMEA Non-EU 48.8 58.7
Singapore 1.5 2.6
Japan 4.4 1.7
519.4 353.2
Issued turbo warrants 1.5 1.1
Amounts due to brokers 28.0 –
Amounts due to clients 22.3 3.2
571.2 3 57.5
Client funds reflects the Group’s liability for client monies which are recognised on balance sheet in cash and cash equivalents.
Amounts due to brokers represents balances where the value of unsettled positions, or the value of open derivatives positions
held in accounts which are not covered by an enforceable netting agreement, results in an amount payable by the Group.
Amounts due to clients represent balances that will be transferred from cash and cash equivalents into segregated client funds
on the following business day in accordance with the UK’s Financial Conduct Authority CASS rules and similar rules of other
regulators in whose jurisdiction the Group operates.
21. Other payables
31 May 2022
£m
31 May 2021
£m
Accruals 112 .6 97. 2
Payroll taxes, social security and other taxes 6.9 11. 0
119.5 108.2
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IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
22. Contingent liabilities and provisions
In the ordinary course of business, the Group is subject to legal and regulatory risks in a number of jurisdictions which may
result in legal claims or regulatory action against the Group. Through the Group’s ordinary course of business there are ongoing
legal proceedings and engagements with regulatory authorities. Where possible, an estimate of the potential financial impact of
these legal proceedings is made using management’s best estimate, but where the most likely outcome cannot be determined
no provision is recognised.
The largest group of related claims that the Group is subject to could have a financial impact of approximately £20.6 million as at
31 May 2022. This is in its early stages and it is not possible to determine whether any amounts will be payable to the clients. As a
result, no provision has been recognised. The Group was not subject to any significant claims at 31 May 2021.
Under the terms of the agreement with the Group’s clearing broker for its operations in the US, Apex Clearing Corporation, the
Group guarantees the performance of its customers in meeting contracted obligations. In conjunction with the clearing broker,
the Group seeks to control the risks associated with its customer activities by requiring customers to maintain collateral
incompliance with various regulatory and internal guidelines. Compliance with the various guidelines is monitored daily
and,pursuant to such guidelines, the customers may be required to deposit additional collateral, or reduce positions
wherenecessary.
The Group does not expect there to be other contingent liabilities that would have a material adverse impact on the Group
Financial Statements. The Group had no material provisions as at 31 May 2022 (31 May 2021: £nil).
23. Share capital and share premium
Number of
shares
Share
capital
£m
Share premium
account
£m
Allotted and fully paid:
(i) Ordinary shares (0.005p)
At 31 May 2020 369,439,455 – 125.8
Issued during the year 860,000 – –
At 31 May 2021 370,299,455 – 125.8
Issued during the year 61,275,000 – –
At 31 May 2022 431,574,455 – 125.8
(ii) Deferred redeemable shares (0.001p)
At 31 May 2021 65,000 – –
At 31 May 2022 65,000 – –
(iii) Redeemable preference shares (£1.00)
At 31 May 2021 40,000 – –
At 31 May 2022 40,000 – –
During the year ended 31 May 2022, 61,000,000 ordinary shares with an aggregate nominal value of £3,050.00 were issued as
part of the consideration for the acquisition of tastytrade. The issue of shares qualifies for merger relief under Section 612 of
the Companies Act 2006, and the amount in excess of the nominal value of ordinary shares, totalling £509.0 million, has been
recognised in the merger reserve instead of the share premium account.
IG Group Holdings plc also issued 275,000 ordinary shares (31 May 2021: 860,000 ordinary shares) with an aggregate nominal
value of £13.75. The 275,000 ordinary shares (31 May 2021: 860,000) were issued to the Employee Benefit Trust in order to
satisfy the exercise of sustained performance plan and long-term incentive plan awards, for consideration of £13.75 (31 May
2021: £43.00). Except as the ordinary shareholders have agreed or may otherwise agree, on a winding up of the Company, the
balance of assets available for distribution, after the payment of all of the Company’s creditors and subject to any special rights
attaching to other classes of shares, are distributed among the shareholders according to the amounts paid up on shares
bythem.
162
FINANCIAL STATEMENTS
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Notes to the Financial Statements continued
23. Share capital and share premium continued
Deferred redeemable shares
These shares carry no entitlement to dividends and no voting rights.
Redeemable preference shares
The preference shares are entitled to a fixed non-cumulative dividend of 8.0% paid in preference to any other dividend.
Redemption is only permissible in accordance with capital distribution rules or on the winding up of the Company where the
holders are entitled to £1 per share plus, if the Company has sufficient distributable reserves, any accrued or unpaid dividends.
The preference shares have no voting rights, except that they are entitled to vote should the Company fail to pay any amount
due on redemption of the shares. The effective interest rate on these shares is 8.0% (31 May 2021: 8.0%).
24. Other reserves
Share-based
payments reserve
£m
Own shares held
in Employee
Benefit Trusts
£m
FVOCI reserve
£m
Total other
reserves
£m
At 1 June 2020 16.7 (4.6) 1.2 13.3
Equity-settled employee share-based payments 7.4 – – 7.4
Exercise of employee share awards (3.2) 3.2 – –
Employee Benefit Trust purchase of shares – (0.2) – (0.2)
Transfer of vested awards from share-based payment reserve (6.4) – – (6.4)
Change in value of financial assets held at fair value through other
comprehensive income – – (1.3) (1.3)
At 31 May 2021 14.5 (1.6) (0.1) 12.8
At 1 June 2021 14.5 (1.6) (0.1) 12.8
Equity-settled employee share-based payments 13.6 – – 13.6
Exercise of employee share awards (2.3) 2.3 – –
Employee Benefit Trust purchase of shares – (6.7) – (6.7)
Transfer of vested awards from share-based payment reserve (7.3) – – (7.3)
Change in value of financial assets held at fair value through other
comprehensive income – – (4.0) (4.0)
At 31 May 2022 18.5 (6.0) (4.1) 8.4
The share-based payments reserve relates to the estimated cost of equity-settled employee share plans based on a straight-
line basis over the vesting period. The fair value through other comprehensive income reserve includes unrealised gains or
losses in respect of financial investments, net of tax.
Own shares held in Employee Benefit Trusts
The movements in own shares held in Employee Benefit Trusts in respect of employee share plans during the year were as follows:
Year ended
31 May 2022
Number
Year ended
31 May 2021
Number
At the beginning of the year 872,272 1,279,338
Subscribed for and purchased during the year 1,012 ,13 0 898,139
Exercise and sale of own shares held in trust (1,224,473) (1,305,205)
At the end of the year 659,929 872,272
The Group has a UK-resident Employee Benefit Trust which holds shares in the Company to satisfy awards under the Group’s
HMRC-approved share-incentive plan (SIP). At 31 May 2022, 161,918 ordinary shares (31 May 2021: 205,623) were held in the
trust. The market value of the shares at 31 May 2022 was £1.2 million (31 May 2021: £1.8 million).
The Group has a Jersey-resident Employee Benefit Trust which holds shares in the Company to satisfy awards under the
long-term incentive plan and sustained performance plan. At 31 May 2022 the Trust held 488,094 ordinary shares (31 May
2021: 651,444). The market value of the shares at 31 May 2022 was £3.5 million (31 May 2021: £5.6 million).
The Group has an Australian-resident Employee Equity Plan Trust which holds shares in the Company to satisfy awards under a
SIP. At 31 May 2022, 9,917 ordinary shares (31 May 2021: 15,205) were held in the Trust. The market value of the shares at
31 May 2022 was £0.1 million (31 May 2021: £0.1 million).
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Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
25. Employee share plans
The Company operates four employee share plans; a sustained performance plan (SPP), a long-term incentive plan (LTIP), a
share-incentive plan (SIP) and a medium-term incentive plan (MTIP). The LTIP, MTIP and SIP are equity-settled. The SPP awarded
prior to 31 May 2021 was fully equity-settled. The SPP awarded after 31 May 2021 has changed such that 30% of the award for
the Executive Directors is settled in cash, and does not meet the criteria to be recognised as either a cash-settled share-based
payment or an equity-settled share-based payment.
Sustained performance plan (SPP)
The SPP award was introduced in the year ended 31 May 2014 for the Group’s Executive Directors and other selected senior
employees. The Remuneration Committee approves any awards made under the plan and is responsible for setting the policy
for the operation of the SPP, agreeing performance targets and participation.
The legal grant of awards under the SPP occurs post the relevant performance period. At the outset of the financial year the
Remuneration Committee approves, and communicates to the participants, performance conditions and a pre-defined
maximum monetary award in terms of multiple of salary. The grant of awards, in the form of equity-settled par value options, is
based upon three performance conditions: relative Total Shareholder Return (TSR), earnings per share (EPS) and operational
non-financial performance (NFP). Awards subsequently vest periodically in tranches until three years after the expiry of the SPP
scheme in August 2023, unless a decision is made by the Remuneration Committee to extend the life of the SPP scheme. As at
31 May 2022, no decision had been made to extend the life of the SPP scheme.
The following table shows the movement of options in the SPP, and the additional awards issued for the year ended
31 May2022:
Award date
Performance
period
(year ended)
Share price
at award
Expected full
vesting date
At the beginning
of the year
Number
Awarded during
the year
Number
Lapsed
during
the year
Number
Exercised
during
the year
Number
Dividend
equivalent
awarded
during
the year
Number
At the end
of the year
Number
04 -Aug -14 31 May 2014 609.90p 1 Aug 2025 24,776 – – (13,547) 622 11, 8 51
06 -Aug-15 31 May 2015 742.55p 1 Aug 2025 26,849 – – (14,355) 693 13,187
02-Aug -16 31 May 2016 868.65p 1 Aug 2025 111, 0 4 4 – – (60,627) 2,798 53,215
01-Aug -17 31 May 2017 626.50p 1 Aug 2025 98,688 – – (49,795) 2,713 51,606
07-Aug-18 31 May 2018 893.00p 1 Aug 2025 336,128 – – (162,502) 9,634 183,260
06 -Aug-19 31 May 2019 559.20p 1 Aug 2025 245,860 – – (106,14 4) 7,753 147, 469
06-Aug-20 31 May 2020 734.00p 1 Aug 2025 1,334,825 – – (444,940) 49,368 939,253
06-Aug-20 – 734.00p 1 May 2022 17,814 – – (19,855) 2,041 –
06-Aug-20 31 May 2021 734.00p 30 Jun 2022 35,616 – – – – 35,616
06-Aug-20 – 734.00p 1 May 2023 4,357 – – (2,426) 248 2,179
05-Aug-21 31 May 2022 911.5 0 p 1 Aug 2025 – 1,322,774 (34,678) – 38,684 1,326,780
10-Jan-22 – 829.50p 30 Jun 2023 – 15,390 – – – 15,390
10-Jan-22 – 829.50p 30 Jun 2024 – 12,990 – – – 12,990
Total 2,235,957 1,351,154 (34,678) (874 ,191) 114 ,55 4 2,792,796
The average share price at exercise of options during the year was 905.87 pence. The exercise price of all SPP awards is
0.005pence and the weighted average remaining contractual life of share options as at 31 May 2022 was 3.11 years
(30 May2021: 4.17 years).
The SPP awards for the year ended 31 May 2022 will be granted in August 2022 following the approval of actual performance
against targets set by the Remuneration Committee. A ten-day share price averaging period, that commences after the
Company’s closed period, is utilised to convert the notional value awarded into a number of options.
The table below details the number of options expected to be awarded for the year ended 31 May 2022, based on the year-end
share price:
Expected award date
Closing share price at
31 May 2022 Expected full vesting date
Awards expected for
the year ending
31 May 2022
Number
4 Aug 2022 715.5p 1 Aug 2025 2,002,411
164
FINANCIAL STATEMENTS
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Notes to the Financial Statements continued
25. Employee share plans continued
Long-term incentive plan (LTIP)
The LTIP is made available to senior management who are not invited to participate in the SPP. Awards under the LTIP are
nominal cost options, which vest after three years, conditional upon continued employment at the vesting date. There are no
other performance targets.
The maximum number of LTIP awards that can vest under the awards made are:
Award date
Share price
at award
Expected
vesting date
At the beginning
of the year
Number
Awarded
during the year
Number
Lapsed
during the year
Number
Dividend
equivalent
awarded during
the year
Number
Exercised
during the year
Number
At the end
of the year
Number
7 Aug 2018 893.00p 7 Aug 2021 218,371 – (3,636) 47, 510 (259,810) 2,435
6 Aug 2019 559.20p 6 Aug 2022 438,844 – (61,125) – – 377,719
6 Aug 2020 734.00p 6 Aug 2023 386,697 2,210 (64,803) – – 324,104
5 Aug 2021 911. 5 0 p 5 Aug 2024 – 3 97,257 (41,962) – – 355,295
Total 1,043,912 399,467 (171,526) 47, 510 (259,810) 1,059,553
The exercise price of all options awarded under the LTIP is 0.005 pence and the weighted average remaining contractual life of
share options as at 31 May 2022 was 1.16 years (31 May 2021: 1.34 years).
Medium-term incentive plan (MTIP)
The MTIP is made available to certain employees within the Group. Awards under the MTIP are nominal cost options, which vest
after 15 months, conditional upon continued employment at the vesting date. There are no other performance targets.
The maximum number of MTIP awards that can vest under the awards made are:
Award date
Share price
at award
Expected
vesting date
At the beginning
of the year
Number
Awarded
during the year
Number
Lapsed
during the year
Number
Dividend
equivalent
awarded during
the year
Number
Exercised
during the year
Number
At the end
of the year
Number
5 Aug 2021 911. 50 p 5 Nov 2022 – 205,487 (9,968) – – 195,519
Total – 205,487 (9,968) – – 195,519
The exercise price of all options awarded under the MTIP is 0.005 pence and the weighted average remaining contractual life of
share options as at 31 May 2022 was 0.43 years (31 May 2021: nil).
Share-incentive plan (SIP)
SIP awards are made available to all UK, Australian and US employees. The terms of the award are approved by the
Remuneration Committee.
The UK and Australian awards invite all employees to purchase up to £1,800/A$3,000 (31 May 2021: £1,800/A$3,000) of
partnership shares, with the Company matching on a one-for-one (31 May 2021: one-for-one) basis. All matching shares vest
after three years as long as the employee remains employed with the Group for the term of the award. Shares awarded under
the scheme are held in trust in accordance with local tax authority rules. Employees are entitled to receive dividends on the
partnership and matching shares held in trust for as long as they remain employees.
The US award invites employees to invest a maximum of 5% of their salary to the award. Employees are invited to purchase
shares in IG Group Holdings plc at a discount of 15% to the scheme price, being the lower of the opening share price and the
closing share price for the period.
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Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
25. Employee share plans continued
The maximum number of matching shares that can vest based on the SIP awards made are:
Country of award Award date
Share price
at award
Expected
vesting date
At the beginning
of the year
Number
Awarded
during the year
Number
Lapsed
during the year
Number
Exercised
during the year
Number
At the end
of the year
Number
UK 7 Aug 2018 893.00p 7 Aug 2021 85,158 – (2,634) (82,524) –
Australia 15 Jul 2018 935.84p 15 Jul 2021 7,178 – – (7,178) –
UK 6 Aug 2019 559.20p 6 Aug 2022 61,239 – (8,027) (88) 53,124
Australia 15 Jul 2019 597.00p 15 Jul 2022 2,075 – (283) – 1,792
UK 6 Aug 2020 734.00p 6 Aug 2023 55,003 – (5,400) (484) 4 9 ,119
Australia 15 Jul 2020 740.79p 15 Jul 2023 3,663 – (666) – 2,997
UK 5 Aug 2021 911.5 0 p 5 Aug 2024 – 50,302 (2,335) (198) 47,769
Australia 15 Jul 2021 851.50p 15 Jul 2024 – 4,179 (190) – 3,989
Total 214,316 54,481 (19,535) (90,472) 158,790
Of the above SIP awards exercised during the year ended 31 May 2022, the average weighted share price at exercise was:
Country of award Award date
Weighted average
share price at
exercise
UK 7 Aug 2018 871.26p
Australia 15 Jul 2018 859.50p
UK 6 Aug 2019 556.00p
Australia 15 Jul 2019 614.12p
UK 6 Aug 2020 751.60p
Australia 15 Jul 2020 825.70p
UK 5 Aug 2021 910.50p
Australia 15 Jul 2021 827. 8 9 p
The weighted average exercise price of the SIP awards exercised during the year ended 31 May 2021 is 903.89 pence.
Accounting for share schemes
The expense recognised in the Income Statement in respect of share-based payments was £13.7 million (31 May 2021: £7.4
million).
The fair value of the equity-settled share-based payments to employees is determined at the date at which a shared
understanding of the terms and conditions of the arrangement is reached between the Company and the participants. The
weighted average fair value of the equity-settled awards granted or deemed as such under IFRS 2 during the year was £15.3
million (31 May 2021: £12.7 million). For SIP awards the fair value is determined to be the share price at the grant date without
making an adjustment for expected future dividends, as award recipients are entitled to dividends over the vesting period. For
LTIP and MTIP awards the fair value is determined to be the share price at grant date without making an adjustment for the
expected future dividends as dividend equivalents are awarded on options granted under the LTIP.
For potential SPP awards made under the TSR criteria, fair value is calculated using an option pricing model prepared by
advisers. For the SPP awards made under the EPS and NFP operational measures, the fair value is determined by taking the
share price at deemed grant date less the present value of expected future dividends for the duration of the performance
period. Dividend equivalents accrue under the SPP on awarded but not yet vested options post the performance period.
Dividend equivalents cease to accrue on unexercised options after the vesting date.
The inputs below were used to determine the fair value of the TSR element of the SPP award:
Date of grant 16 August 2021
Share price at grant date (pence) £9.13
Expected life of awards (years) 0.79
Risk-free sterling interest rate (%) 0.05%
IG Group Holdings plc expected volatility (%) 24.09%
166
FINANCIAL STATEMENTS
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Notes to the Financial Statements continued
25. Employee share plans continued
IG Group Holdings plc’s expected volatility is based on historical TSR volatility of IG Group Holdings plc measured daily over a
period prior to the date of grant and commensurate with the remaining performance period. The weighted average fair values
for outstanding awards across all schemes are as follows:
At the beginning
of the year
Awarded during
the year
Lapsed during
the year
Exercised during
the year
At the end of the
year
Year ended 31 May 2022 618.63p 760.27p 807.52p 641.61p 683.09p
Year ended 31 May 2021 577.48p 695.98p 6 6 7. 22p 689.06p 618.63p
26. Related party transactions
The Directors and other members of management classified as persons discharging management responsibility in accordance
with the Market Abuse Regulation are considered to be the key management personnel of the Group in accordance with IAS 24
Related Party Disclosures. The Directors’ Remuneration Report discloses all benefits and share-based payments earned during
the year and the preceding year by the Executive Directors. The total compensation for key management personnel was as
follows:
Year ended
31 May 2022
£m
Year ended
31 May 2021
£m
Short-term employee benefits 6.8 6.4
Share-based payments 10.6 6.5
17. 4 12.9
The average number of key management personnel during the year was twelve (year ended 31 May 2021: nine). Included within
short-term employee benefits are pension charges of £nil million (year ended 31 May 2021: £0.1 million).
The Group incurred short-term office rental costs in relation to office space leased from key management personnel totalling
£0.3 million in 31 May 2022 (31 May 2021: £nil). During the year ended 31 May 2022, the Group incurred £0.4 million of
arrangement fees for the issue of debt securities with a financial advisory firm that a member of key management personnel
holds a directorship in.
In November 2021, the Group took part in a funding round of Small Exchange and invested an additional £1.9 million. Prior to the
disposal of the Group’s shareholding in Small Exchange, the Group recognised its share of losses in the year from Small
Exchange of £2.3 million. In addition, the Group paid various operating expenses on behalf of Small Exchange and is reimbursed
for these expenses. The total value of these expenses in the year ended 31 May 2022 was £2.0 million (31 May 2021: £nil).
On acquisition of tastytrade, the Group initially recognised a convertible loan note with Zero Hash at a fair value of £9.3 million
($12.0 million). This was subsequently converted into an equity shareholding of 17.4% at fair value of £17.9 ($24.2 million)
inSeptember 2021. On 22 December 2021, the Group sold shares in Zero Hash and reduced its shareholding to 9.86%.
Thegain on revaluation on conversion of loan note and the gain on disposal have been shown as a separate line item
intheIncome Statement.
Zero Hash facilitates cryptocurrency trading for clients of tastyworks. tastyworks recognised £0.6 million revenue, net of
integration fees, from Zero Hash (year ended 31 May 2021: £nil).
There were no other related party transactions which had a material impact on the Financial Statements. The Group had no
transactions with its Directors other than those disclosed in the Directors’ Remuneration Report.
167
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Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
27. Financial instruments
Accounting classifications and fair values
The table below sets out the classification of each class of financial assets and liabilities and their fair values.
As at 31 May 2022 Note
FVTPL
£m
Amortised cost
£m
FVOCI
£m
Total carrying
amount
£m
Fair value
£m
Financial assets:
Cash and cash equivalents – 1,246.4 – 1,246.4 1,246.4
Financial assets pledged as collateral – – 60.4 60.4 60.4
Financial investments 14 – 45.0 290.7 335.7 335.7
Trade receivables – amounts due from
brokers 16 (159.3) 540.3 – 381.0 381.0
Trade receivables – own funds in client
money 16 – 85.5 – 85.5 85.5
Trade receivables – amounts due from
clients 16 – 3.0 – 3.0 3.0
Other receivables – 9.8 – 9.8 9.8
(159.3) 1,930.0 351.1 2 ,121.8 2,121.8
Financial liabilities:
Trade payables – client funds 20 117. 4 (636.8) – (519.4) (519.4)
Trade payables – issued turbo warrants 20 (1.5) – – (1.5) (1.5)
Trade payables – amounts due to brokers 20 (1.0) (27.0) – (28.0) (28.0)
Trade payables – amounts due to clients 20 – (22.3) – (22.3) (22.3)
Debt securities in issue 18 – (297.2) – (297.2) (269.6)
Lease liabilities 19 – (22.7) – (22.7) (22.7)
Other payables – accruals 21 – (112 .6) – (112 .6 ) (112 .6)
114 .9 (1,118 . 6) – (1,003.7) (976.1)
As at 31 May 2021 Note
FVTPL
£m
Amortised cost
£m
FVOCI
£m
Total carrying
amount
£m
Fair value
£m
Financial assets:
Cash and cash equivalents – 655.2 – 655.2 655.2
Financial assets pledged as collateral – – 87.1 87.1 87.1
Financial investments 14 – – 255.0 255.0 255.0
Trade receivables – amounts due from
brokers 16 17.1 4 07. 2 – 424.3 424.3
Trade receivables – own funds in client
money 16 – 63.3 – 63.3 63.3
Trade receivables – amounts due from
clients 16 – 3.3 – 3.3 3.3
Other receivables – 5.5 – 5.5 5.5
17.1 1,134.5 342.1 1,493.7 1,493.7
Financial liabilities:
Trade payables – client funds 20 38.4 (392.7) – (354.3) (354.3)
Trade payables – issued turbo warrants 20 – – – – –
Trade payables – amounts due to brokers 20 – – – – –
Trade payables – amounts due to clients 20 – (3.2) – (3.2) (3.2)
Borrowings 18 – (98.8) – (98.8) (98.8)
Lease liabilities 19 – (23.1) – (23.1) (23 .1)
Other payables – accruals 21 – (97. 2) – (97. 2) ( 97.2)
38.4 (615.0) – (576.6) (576.6)
168
FINANCIAL STATEMENTS
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Notes to the Financial Statements continued
27. Financial instruments continued
Financial instrument valuation hierarchy
The hierarchy of the Group’s financial instruments carried at fair value is as follows:
As at 31 May 2022
Level 1
£m
Level 2
£m
Level 3
£m
Total fair value
£m
Financial assets:
Trade receivables – amounts due from brokers 9.2 (168.5) – (159.3)
Financial assets pledged as collateral 60.4 – – 60.4
Financial investments 290.7 – – 290.7
Financial liabilities:
Trade payables – amounts due to brokers – (1.0) – (1.0)
Trade payables – client funds 14.1 103.3 – 117. 4
Trade payables – issued turbo warrants – (1.5) – (1.5)
As at 31 May 2021
Level 1
£m
Level 2
£m
Level 3
£m
Total fair value
£m
Financial assets:
Trade receivables – due (to)/from brokers 0.6 16.5 – 17.1
Financial assets pledged as collateral 87.1 – – 87.1
Financial investments 255.0 – – 255.0
Financial liabilities:
Trade payables – amounts due to brokers – – – –
Trade payables – client funds – 38.4 – 38.4
Fair value hierarchy levels 1 to 3 are based on the degree to which the fair value is observable:
¼ Level 1 assets are valued using unadjusted quoted prices in active markets for identical financial instruments. This category
includes the Group’s open-exchange traded hedging positions. The quoted market price used for financial assets held by the
Group is the period end bid price.
¼ Level 2 assets are valued using techniques where a price is derived based significantly on observable market data. For
example, where an active market for an identical financial instrument to the product used by the Group to hedge its market
risk does not exist. This category includes the Group’s open non-exchange traded hedging positions. This comprises shares,
foreign currency and foreign currency options. The fair values used in the valuation of these products are sometimes
brokered values and may occur after the close of a market but before the measurement date. The effects of discounting are
generally insignificant for these Level 2 financial instruments.
¼ Level 3 assets are valued using techniques that incorporate information other than observable market data that is significant
to the overall valuation.
There have been no changes to the fair value hierarchy or the valuation techniques for any of the Group’s financial instruments
held at fair value in the year (31 May 2021: none). There were no transfers between Level 1 and Level 2 fair value measurements,
and no transfers into or out of Level 3 fair value measurements for years ended 31 May 2022 and 31 May 2021.
Fair value of financial assets and liabilities measured at amortised cost
The fair value of the Group’s financial assets and liabilities measured at amortised cost approximates their carrying amount, with
the exception of debt securities in issue.
Items of income, expense, gains or losses
All of the Group’s gains and losses arising from financial assets and liabilities classified as fair value through the profit and loss
are included in net trading revenue for the years ended 31 May 2022 and 31 May 2021.
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IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
27. Financial instruments continued
Offsetting financial assets and liabilities
The following financial assets and liabilities have been offset and are subject to enforceable netting agreements.
As at 31 May 2022 Note
Gross amounts
of recognised
financial assets
£m
Gross amounts
of recognised
financial liabilities
set off
£m
Net amounts of
financial assets
and liabilities
£m
Financial assets:
Trade receivables – amount due from/(to) brokers 16 1,119.3 (738.3) 381.0
Financial liabilities:
Trade payables – amount due from/(to) brokers 20 68.0 (96.0) (28.0)
Trade payables – client funds 20 121.3 (640.7) (519.4)
1,308.6 (1,475.0) (166.4)
As at 31 May 2021 Note
Gross amounts
of recognised
financial assets
£m
Gross amounts
of recognised
financial liabilities
set off
£m
Net amounts of
financial assets
and liabilities
£m
Financial assets:
Trade receivables – amount due from/(to) brokers 16 954.6 (530.3) 424.3
Financial liabilities:
Trade payables – client funds 20 42.1 (396.4) (354.3)
996.7 (926.7) 70.0
Amounts due from brokers and client funds have been presented net to reflect the impact of offsetting. The Group is entitled to
offset amounts due from brokers on a broker account level by currency. Collateral at brokers represent UK Government
securities listed with brokers to meet the broker’s requirements. Client funds represents balances with clients where the cash
held on balance sheet and the valuation of open derivative positions result in an amount due to clients.
28. Financial risk management
Financial risks arising from financial instruments are analysed into market, credit, concentration and liquidity risks. Details of
how risks are managed are discussed in the risk management section on page 46.
Market risk
Market risk disclosures are analysed into the following categories:
¼ Non-trading interest rate risk.
¼ Price and foreign currency risk, which is further analysed between the impact on financial investments held at fair value
through other comprehensive income and the impact on the Group’s year-end net trading book position. The Group’s
foreign currency exposure on its financial assets and liabilities denominated in currencies other than the reporting currency
is included in the trading book.
170
FINANCIAL STATEMENTS
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Notes to the Financial Statements continued
28. Financial risk management continued
Non-trading interest rate risk
The interest rate risk profile of the Group’s financial assets and liabilities at each year end was as follows:
Within 1 year Between 2 and 5 years More than 5 years Total
31 May 2022
£m
31 May 2021
£m
31 May 2022
£m
31 May 2021
£m
31 May 2022
£m
31 May 2021
£m
31 May 2022
£m
31 May 2021
£m
Fixed rate:
Financial assets pledged as collateral 35.1 26.0 25.3 61.1 – – 60.4 87.1
Financial investments 200.9 127. 4 134.8 127.6 – – 335.7 255.0
Debt securities in issue – – – – (297. 2) – (297. 2) –
Floating rate:
Cash and cash equivalents 1246.4 655.2 – – – – 1246.4 655.2
Trade receivables – due from brokers 381.0 424.3 – – – – 381.0 424.3
Trade receivables – own funds in
client money 85.5 63.3 – – – – 85.5 63.3
Trade payables – due to brokers (28.0) – – – – – (28.0) –
Borrowings – – – (98.8) – – – (98.8)
1,920.9 1,296.2 160.1 89.9 (297.2) – 1,783.8 1,386.1
Non-trading interest rate risk sensitivity analysis – fixed rate
Interest on financial instruments classified as fixed rate is fixed until the maturity of the instrument. The level of future fixed
interest receivable would be similar to that received in the year and is considered immaterial to the Group’s profit for the year.
Non-trading interest rate risk sensitivity analysis – floating rate
Interest on financial instruments classified as floating rate is re-priced at intervals of less than one year. Trade receivables and
payables include client and broker balances upon which interest is paid or received based upon market rates.
Interest rate sensitivity has been performed on floating rate financial instruments by considering the impact of a 1% decrease in
interest rates on financial assets and financial liabilities. The impact of such a movement on the Group’s profit before tax for the
year is shown below.
Year ended
31 May 2022
£m
Year ended
31 May 2021
£m
(Decrease)/increase in profit before tax:
Cash and cash equivalents (12.5) (6.6)
Trade receivables – amounts due from brokers (0.9) (1.2)
Trade receivables – own funds in client money 0.9 0.6
Trade payables – amounts due to brokers (0.3) –
Borrowings – 0.1
Price risk
The Group is exposed to investment securities price risk because financial investments and financial assets pledged as collateral
held by the Group are priced based on closing market prices published by the UK Debt Management Office.
The table below summarises the impact of decreases in the value of financial investments on the Group’s other comprehensive
income. The analysis is based on the assumption that the yield curve of financial investments moved upwards by 1% with all
other variables held constant:
Impact:
Year ended
31 May 2022
£m
Year ended
31 May 2021
£m
Decrease in FVOCI reserve (equity) (2.9) (3.1)
The Group is also exposed to price and foreign currency risk in relation to its net trading book position. The Group accepts
some residual market risk to facilitate instant execution of client trades but does not take proprietary positions for the purposes
of speculative gain. The Group manages the market risk it faces in providing its services to clients by internalising client flow
(allowing individual client trades to offset one another) and hedging when the residual exposures reach pre-defined limits. The
Group’s Risk Management Framework is set out on page 46 of the Annual Report.
171
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Shareholder and
Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
28. Financial risk management continued
The Group’s market risk policy includes Board-approved notional market risk limits (KRIs) which set out the Group’s appetite and
the extent to which the Group is willing to be exposed to this residual market risk. Product market risk limits control the
maximum (long or short) residual exposure the Group can hold before hedging externally. Predefined limits are set and regularly
reviewed in accordance with a limits framework which references client trading volumes, market liquidity, volatility and
expected shortfall results for each underlying market.
Alongside these notional limits the Group employs a range of risk measurement techniques including Value at Risk (VaR),
Expected Shortfall and Stress-Testing models which are used to quantify potential market risk and client credit risk losses
against all products. These measures cover all products offered to clients and are monitored on an hourly basis, with breaches
investigated and reported to the Chief Risk Officer and senior stakeholders in each line of defence on a daily basis.
These measures quantify the potential uncertainty in relation to the Group’s current exposure by estimating the potential
impact of a negative change in the value of each underlying financial market the Group is exposed to. The VaR model uses a
99% confidence interval over one day and one year’s historical price data for all markets as inputs to determine the risk factors
to apply to the portfolio exposures. VaR has limitations as it is reliant on historical data only and estimates potential future losses
on this basis. Additionally, VaR does not quantify the potential losses outside of the 99% confidence level – the tail risk. To
overcome these limitations the Group also measures and monitors Expected Shortfall and Stress Testing results alongside VaR
results as part of its overall risk management strategy. Expected Shortfall measures the Group’s expected losses outside of the
99% confidence level (average losses in the 1% tail), while Stress Testing models potential losses in extreme but plausible events.
Stress Testing covers a range of scenarios including future known economic and political events, market or region-specific
scenarios and potential macro systemic shocks, which references the 20-year price returns for all markets at the 99.9th
percentile confidence interval. The Group’s end of day market risk VaR for the year is shown in the table below:
Year ended
31 May 2022
£m
Year ended
31 May 2021
£m
Market risk as at 31 May 5.0 5.3
Average market risk (daily) 3.6 9.6
Maximum market risk (daily) 13.1 25.5
Minimum market risk (daily) 1.3 2.8
Foreign currency risk
The Group faces foreign currency exposures on financial assets and liabilities denominated in currencies other than the
functional currency of its subsidiaries. In the normal course of business, the Group hedges these exposures along with its
trading book positions.
Associated with the tastytrade, acquisition, the Group entered into a foreign exchange contract to hedge the $300 million
exposure arising from the cash consideration due upon completion of the transaction. In the year ended 31 May 2022, the
Group recognised a £5.8 million realised foreign exchange gain (31 May 2021: £7.9 million unrealised foreign exchange loss) in
net trading revenue as a result of this hedge.
Credit risk
The principal sources of credit risk to the Group’s business are from financial institutions and individual clients.
Amounts due from financial institutions, which are stated net of an expected credit loss of £nil (31 May 2021: £nil), are all less
than 30 days past due. Amounts due from clients, which are stated net of an expected credit loss of £18.0 million at 31 May
2022 (31 May 2021: expected credit loss of £17.0 million), include both amounts less than and greater than 30 days past due.
The analysis in the following table shows credit exposures by credit rating.
Cash and cash equivalents
Trade receivables – amounts
due from brokers
Trade receivables – amounts
due from clients
Trade receivables – own funds
in client money
31 May 2022
£m
31 May 2021
£m
31 May 2022
£m
31 May 2021
£m
31 May 2022
£m
31 May 2021
£m
31 May 2022
£m
31 May 2021
£m
Credit rating:
AA+ and above 24.1 27.3 – – – – – –
AA to AA- 437.8 158.1 – 8.2 – – 5.3 0.6
A+ to A- 730.9 426.2 320.0 402.1 – – 80.0 61.8
BBB+ to BBB- 25.5 30.0 32.8 – – – 0.2 0.8
BB+ to B 17.6 13.6 1.5 1.1 – – – –
Unrated 10.5 – 26.7 12.9 3.0 3.3 – 0.1
Total carrying amount 1,246.4 655.2 381.0 424.3 3.0 3.3 85.5 63.3
172
FINANCIAL STATEMENTS
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Notes to the Financial Statements continued
28. Financial risk management continued
Loss allowance
Below is a reconciliation of the total loss allowance:
Year ended
31 May 2022
£m
Year ended
31 May 2021
£m
At the beginning of the year 17.0 15.8
Loss allowance for the year:
– gross charge for the year 6.5 8.0
– recoveries (3.6) (5.1)
– debts written off (1.7) (1.3)
Foreign exchange 0.4 (0.4)
At the end of the year 18.6 17.0
The loss allowance has been calculated in accordance with the Group’s expected credit loss model. The following table provides
an overview of the Group’s credit risk and the associated loss allowance for assets held at amortised cost and fair value through
other comprehensive income.
31 May 2022
Stage 1
12-month
£m
Stage 2
Lifetime
£m
Stage 3
Lifetime
£m
Total
£m
Credit grade:
Investment grade 2,213.9 – – 2,213.9
Non-investment grade 70.2 1.0 17.6 88.8
Gross carrying amount 2,284 .1 1.0 17.6 2,302.7
Loss allowance – (1.0) (17.6) (18.6)
Total carrying amount 2,284 .1 – – 2,284.1
31 May 2021
Stage 1
12-month
£m
Stage 2
Lifetime
£m
Stage 3
Lifetime
£m
Total
£m
Credit grade:
Investment grade 1,439.6 – – 1,439.6
Non-investment grade 37.0 – 17. 0 54.0
Gross carrying amount 1,476.6 – 17. 0 1,493.6
Loss allowance – – (17.0) (17. 0 )
Total carrying amount 1,476.6 – – 1,476.6
The Group’s trade receivables in stage 3 include amounts arising from IFRS 15 Revenue from Contracts with Customers which
are assessed in accordance with the simplified approach. The comparatives for 31 May 2021 have been re-presented to split
out amount previously presented as being classified within the simplified approach column into the relevant staging.
Concentration risk
The Group’s largest credit exposure to any one individual broker at 31 May 2022 was £55.7 million (A+ rated) (31 May 2021:
£69.9 million (A+ rated)). Included in cash and cash equivalents, the Group’s largest credit exposure to any bank at 31 May 2022
was £320.9 million (AA- rated) (31 May 2021: £117.3 million (A+ rated)). The Group has no significant credit exposure to any one
particular client or group of connected clients.
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28. Financial risk management continued
Liquidity risk
Maturities of financial liabilities
The table below outlines the Group’s financial liabilities into relevant maturity categories based on their contractual maturities.
The amounts disclosed below are the contractual undiscounted cash flows.
31 May 2022
Within
1 year
£m
Between
2 and 5 years
£m
Over
5 years
£m
Total
£m
Carrying amount
of liability
£m
Debt securities in issue 9.4 37.6 304.7 351.7 299.2
Lease liabilities 8.9 14.6 0.6 24 .1 22.7
Trade payables – client funds 519.4 – – 519.4 519.4
Trade payables – amounts due to clients 22.3 – – 22.3 22.3
Trade payables – amounts due to brokers 28.0 – – 28.0 28.0
Trade payables – issued turbo warrants 1.5 – – 1.5 1.5
Other payables – accruals 112 .6 – – 112 .6 112 .6
Total 702.1 52.2 305.3 1,059.6 1,005.7
31 May 2021
Within
1 year
£m
Between
2 and 5 years
£m
Over
5 years
£m
Total
£m
Carrying amount
of liability
£m
Borrowings 2.0 102.4 – 104.4 98.8
Lease liabilities 6.7 16.5 0.9 24.1 23.1
Trade payables – client funds 353.2 – – 353.2 353.2
Trade payables – amounts due to clients 3.2 – – 3.2 3.2
Trade payables – issued turbo warrants 1.1 – – 1.1 1.1
Other payables – accruals 97. 2 – – 97. 2 97. 2
Total 463.4 118 . 9 0.9 583.2 576.6
Capital management
The Group manages its capital resources in line with its capital allocation framework.
The regulatory capital resources of the Group is a measure of equity, adjusted for goodwill and intangible assets, deferred tax
assets, declared dividends and prudent valuation, which at 31 May 2022 totalled £1,025.6 million (31 May 2021: £860.7 million).
The Group operates a monitoring framework over the capital resources and minimum capital requirements daily, calculating the
market and credit risk requirements arising from exposure at the end of each day and this includes internal warning indicators
as part of the Group’s Board Risk Dashboard.
Until 31 December 2021, the Group was subject to CRD IV regulations. The Group was required to undertake a Pillar 2 Internal
Capital Adequacy Assessment Process (ICAAP) at least annually, which involved an assessment of capital requirements through
a series of stress-testing scenarios against the financial projections. From 1 January 2022, the Group is subject to the
Investment Firm Prudential Regime (IFPR), which changes the basis of calculation of the Group’s regulatory capital, and replaces
the ICAAP with an Internal Capital and Risk Assessment (ICARA) prepared under the requirements of the MiFIDPRU.
The Group met all externally imposed capital requirements throughout the years ended 31 May 2022 and 31 May 2021. In
addition to regulatory capital requirements, the Group is required to comply with financial covenants covering a maximum
leverage ratio and net debt to equity. Further details can be found in note 18.
174
FINANCIAL STATEMENTS
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Notes to the Financial Statements continued
29. Cash flow information
Cash generated from operations
Year ended
31 May 2022
£m
Year ended
31 May 2021
£m
Operating activities
Operating profit 477. 3 454.5
From continuing operations 477.3 450.2
From discontinued operations – 4.3
Depreciation and amortisation 57.5 25.7
Profit on disposal of assets (0.3) –
Equity-settled share-based payments charge 13.6 7. 4
Decrease/(increase) in trade receivables, other receivables and other assets 53.9 (161.9)
Increase in trade and other payables 209.4 247. 8
Cash generated from operations 811. 4 573.5
Liabilities arising from financing activities
Debt Securities
in Issue
£m
Borrowings
£m
Leases
£m
Total
£m
Liabilities as at 1 June 2020 – 99.7 29.3 129.0
Changes to existing lease agreements – – 0.4 0.4
Lease payments made in the year – – (5.8) (5.8)
Unwinding of discount – – 0.6 0.6
Financing arrangement fees – (1.3) – (1.3)
Amortisation of fees – 0.4 – 0.4
Impact of movement in foreign exchange rates – – (1.4) (1.4)
Liabilities as at 31 May 2021 – 98.8 23 .1 121.9
Liabilities as at 1 June 2021 – 98.8 23.1 121.9
Changes to existing lease agreements – – 5.6 5.6
Lease agreements through acquisition – – 0.9 0.9
Unwinding of discount – – 0.6 0.6
Lease payments made in the year – – (8.1) (8.1)
Issuance of debt securities 299.2 – – 299.2
Draw down of term loan – 150.0 – 150.0
Repayment of term loan – (250.0) – (250.0)
Financing arrangement fees (2 .1) – – (2.1)
Amortisation of fees 0.1 1.2 – 1.3
Impact of movement in foreign exchange rates – – 0.6 0.6
Liabilities as at 31 May 2022 297. 2 – 22.7 319.9
30. Business acquisition
On 28 June 2021, the Group completed the acquisition of tastytrade, Inc. (tastytrade), a company incorporated in the US and
headquartered in Chicago. tastytrade is a US online brokerage and trading education platform operating within the US listed
options and futures market.
The acquisition of tastytrade has strategic benefits for the Group and provides immediate scale in the US listed options and
futures market. It transforms the scale and breadth of the Group’s existing US presence through IG US LLC and DailyFX and its
relevance to US retail clients. The acquisition also extends the Group’s global product capabilities into exchange traded options
and futures, diversifying IG’s regulatory risk profile beyond its historical focus on OTC derivatives, and increases the contribution
from capital efficient agency-only activities.
A fair value exercise has been prepared in accordance with IFRS 3 Business Combinations. The results of this exercise are set
out below, along with the fair value of the purchase consideration.
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30. Business acquisition continued
Purchase consideration
Under the terms of the purchase agreement, IG Group Holdings plc (directly and through certain wholly owned subsidiaries)
acquired the entire voting share capital of tastytrade and in exchange, $296.9 million cash consideration was paid and IG Group
Holdings plc issued 61,000,000 ordinary shares. The shares were issued on 28 June 2021 and upon issue the total value of the
shares was £509.4 million, based upon the closing share price on 28 June 2021 of £8.35. The issue of shares is determined to
qualify for merger relief under Section 612 of the Companies Act 2006, and the amount in excess of the nominal value of
ordinary shares has been recognised in the merger reserve, along with issue costs of £0.4 million which were directly
attributable to the issue of the shares. The Group part-financed the transaction by drawing down on a £150.0 million term loan
which was arranged during the year ended 31 May 2021.
The fair value of the purchase consideration is as follows:
$m £m
Cash consideration 296.9 213.8
Issued ordinary shares 707. 2 509.4
Total consideration 1,0 04.1 723.2
Identified assets and liabilities
The Group has a 12 month measurement period from date of acquisition to estimate the fair value of acquired assets and
liabilities. The fair value exercise is complete as at the reporting date. The fair values recognised at acquisition is set out below:
$m £m
Cash and cash equivalents 31.2 22.6
Trade receivables 21.6 15.6
Prepayments and other receivables 4.6 3.3
Convertible loan notes 4.0 2.9
Total current assets 61.4 44.4
Investments in associates 12.5 9.0
Property, plant and equipment 4.0 2.9
Internally developed software 19.8 14.3
Trade name 78.7 56.9
Customer relationships 226.1 163.5
Non-compete agreements 39.8 28.8
Convertible loan notes 8.0 5.8
Deferred tax asset 10.3 7. 4
Total non-current assets 399.2 288.6
Accruals and other payables (7. 8) (5.6)
Total current liabilities (7.8) (5.6)
Deferred tax liability (91.4) (66 .1)
Lease liabilities (0.7) (0.5)
Total non-current liabilities (92.1) (66.6)
Total identifiable net assets acquired 360.7 260.8
The gross contractual amount of trade receivables is £15.6 million ($21.6 million) and it is expected that the full contractual
amounts, less the amounts already provided for, is recoverable.
The fair value of assets and liabilities acquired was determined based on the assumptions that reasonable market participants
would use in the principal or most advantageous market. The assumptions used included a discount rate of 17.3% and
unobservable inputs within the valuation methodologies, which are outlined in the section below alongside sensitivity analysis
for certain key inputs.
176
FINANCIAL STATEMENTS
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Notes to the Financial Statements continued
30. Business acquisition continued
Customer relationships: Income approach (excess earnings method)
This approach estimates the projected cash flows of the asset, adjusted for capital charges from other contributory assets. In
addition to the assumptions applied in the cash flow forecasts, key inputs include the customer attrition rate, the discount rate
and the long-term growth rate.
¼ A 5 percentage point increase in the attrition rate would reduce the fair value of the asset by £34.9 million.
¼ A 2 percentage point increase in the discount rate would reduce the fair value of the asset by £12.2 million.
¼ A 0.5 percentage point decrease in the long-term growth rate would reduce the fair value of the asset by £4.2 million.
The value of customer relationships has increased from £156.3 million ($216.2 million) to £163.5 million ($226.1 million) since the
values reported at 30 November 2021 as a result of a change in assumptions related to attrition rates.
Trade names: Income approach (relief from royalty method)
This approach estimates the future cost savings that arise as a result of not having to pay a royalty or licence fee on the future
revenues earned through using the asset. In addition to the assumptions applied in the revenue forecasts, key inputs include the
royalty rate and the discount rate.
¼ A 0.5 percentage point decrease in the royalty rate would reduce the fair value of the asset by £5.7 million.
¼ A 2 percentage point increase in the discount rate would reduce the fair value of the asset by £5.4 million.
¼ A 5-year reduction in the useful life of the asset would reduce the fair value by £10.3 million.
Non-compete agreement: Income approach (with or without method)
This approach estimates the fair value of the cash flows both with the non-compete agreement and without the non-compete
agreement. The non-compete arrangements in place apply for a period of five years for the founders. The key inputs are the
assumptions relating to likelihood and value of lost revenue over the five year period. There are no inputs where a reasonable
change in the assumptions results in a significant change in the fair value.
Internally developed software: Cost approach
This approach applies the concept of replacement cost as an indicator of fair value, where an investor would pay no more for an
asset than the amount the asset could be replaced for. In addition to the estimate of cost, the key inputs are the estimated
mark-up generated by a developer and obsolescence factors. There are no inputs where a reasonable change in the
assumptions results in a significant change in the fair value.
Goodwill arising from the acquisition has been recognised as follows:
$m £m
Purchase consideration 1,004.1 723.2
Less: fair value of identified net assets (360.7) (260.8)
Goodwill 643.4 462.4
Goodwill is attributable to the workforce, future technology and future growth of tastytrade. Goodwill is not deductible for
taxpurposes.
From the date of acquisition, tastytrade contributed £110.1 million of net trading revenue in the year ended 31 May 2022 and
operating profit of £17.8 million, which includes the amortisation of acquisition related intangible assets. If the acquisition had
occurred on 1 June 2021, the contribution to trading revenue is estimated to be £118.7 million and operating profit of £19.3
million. Operating profit includes the additional amortisation that would have been charged assuming that the fair value of
intangible assets had been applied from 1 June 2021.
Purchase consideration outflow
$m £m
Outflow of cash to acquire subsidiary, net of cash acquired
Cash consideration 296.9 213.8
Less: cash balance acquired (31.2) (22.6)
Net outflow of cash 265.7 191.2
The Group incurred acquisition costs not directly attributable to the issuance of shares of £20.7 million for legal, insurance,
bank and broker services. Of this, £1.1 million was recognised in the year ended 31 May 2022 and the remaining £19.6 million
was recognised in the year ended 31 May 2021. These costs have been recognised as part of operating expenses and operating
cash flows.
Included within the cash consideration above is a working capital adjustment of £2.3 million ($3.1 million), due back to theGroup.
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31. Discontinued operations
On 1 March 2022, the Group completed the sale of its operations in Nadex to Foris DAX Markets, Inc for cash consideration of
$213.7 million (£162.7 million). The financial performance and cash flow information of Nadex for the nine month period up until
the date of disposal are reported in discontinued operations as set out below.
Financial performance and cash flow information
Year ended
31 May 2022
£m
Year ended
31 May 2021
£m
Net trading revenue 9.4 16.1
Other operating income 0.6 0.8
Operating income 10.0 16.9
Operating costs (9.9) (12.5)
Net credit losses (0.1) (0.1)
Operating profit – 4.3
Profit before tax – 4.3
Tax expense – (1.0)
Profit after tax – 3.3
Gain on sale of subsidiary after tax expense 107.8 –
Profit from discontinued operations 107. 8 3.3
Year ended
31 May 2022
£m
Year ended
31 May 2021
£m
Net cash inflow from ordinary activities 1.0 7. 2
Net cash inflow/(outflow) from investing activities 121.6 (1.4)
Net cash (outflow) from financing activities (0.1) (4.5)
Impact of movement in foreign exchange rates 1.0 (2.3)
Net cash increase/(decrease) generated by the subsidiary 123.5 (1.0)
1 Includes sales proceeds net of cash retained of £143.3 million.
Details of disposal of operations in Nadex
£m
Consideration received 162.7
Carrying amount of net assets sold (24.7)
Costs associated with disposal (4.1)
Reclassification of foreign currency translation reserve 3.0
Tax expense on gain on sale (29.1)
Gain on sale after income tax 107.8
The carrying amounts of assets and liabilities as at the date of disposal were: £m
Property, plant and equipment 1.5
Intangible assets (including goodwill) 6.2
Net current assets 0.2
Non-current lease liabilities (0.6)
Cash and cash equivalents 17. 4
Net assets 24.7
Year ended
31 May 2022
Year ended
31 May 2021
Basic earnings per ordinary share from discontinued operations 25.3p 0.9p
Diluted earnings per ordinary share from discontinued operations 25.1p 0.9p
178
FINANCIAL STATEMENTS
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Notes to the Financial Statements continued
32. Investment in associates
31 May 2022
£m
31 May 2021
£m
At the beginning of the period: – –
Additions – business acquisition 26.9 –
Additions – increase in investment in associate 1.9 –
Disposals (13.1) –
Share of loss after tax (2.3) –
Foreign exchange movement 1.4 –
At the end of the year 14.8 –
As a part of the acquisition of tastytrade, the Group acquired a 37.18% investment in Small Exchange. During the year, the Group
increased its investment in Small Exchange by £1.9 million and subsequently sold its entire shareholding in Small Exchange for
consideration of £18.9 million recognising a gain of £4.0 million.
As part of the acquisition of tastytrade, the Group acquired a convertible loan instrument with a fair value of £9.3 million. On
24 September 2021, the convertible loan instrument was wholly converted into equity providing the Group with a 17.4% equity
shareholding in Zero Hash with a fair value of £17.9 million. The Group also held 25% voting rights in Zero Hash and it was
therefore recognised as an associate. Zero Hash has a reporting date of 31 December. The Group disposed of 7.54% of its
equity interest in Zero Hash on 22 December 2021 for consideration of £5.6 million.
Name of entity Principal place of business
Registered office and
country of incorporation Class of shares
% equity
owned by
the Group Nature of business
Zero Hash Holdings
Limited
Chicago, Illinois 1013 Centre Rd.
Suite 403-A, City of
Wilmington, County
of New Castle,
19805.US
Series C-preferred
shares
9.86% Digital asset trading
Interactive Broker Group (IBG) LLC holds 33.3% interest in Zero Hash. The Group has an account with IBG for hedging purposes.
However, IBG is not the Group’s primary or secondary broker and no trades have been placed with IBG during the year ended
31 May 2022.
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33. Investments in subsidiaries
The following companies are all owned directly or indirectly by IG Group Holdings plc:
Name of Company
Registered office and
country of incorporation Holding Voting rights Nature of business
Subsidiary undertakings held directly:
IG Group Limited Cannon Bridge House,
25 Dowgate Hill,
London EC4R 2YA
United Kingdom
Ordinary shares 100% Holding company
Subsidiary undertakings held indirectly:
IG Index Limited Cannon Bridge House,
25 Dowgate Hill,
London EC4R 2YA
United Kingdom
Ordinary shares 100% Spread betting
IG Markets Limited Ordinary shares 100% CFD trading, foreign
exchange and
market risk
management
IG Markets South Africa Limited Ordinary shares 100% CFD trading
Market Data Limited Ordinary shares 100% Data distribution
IG Nominees Limited
1
Ordinary shares – Nominee company
IG Knowhow Limited Ordinary shares 100% Software
development
Extrabet Limited
1
Ordinary shares – Non-Trading
IG Finance
1
Ordinary shares – Financing
IG Finance Two
1
Ordinary shares – Financing
IG Finance Three
1
Ordinary shares – Financing
IG Finance Four
1
Ordinary shares – Financing
IG Finance 5 Limited
1
Ordinary shares – Financing
IG Forex Limited
1
Ordinary shares – Financing
IG Spread Betting Limited
1
Ordinary shares – Financing
IG Finance 8 Limited
1
Ordinary shares – Financing
IG Finance 9 Limited Ordinary shares 100% Financing
Financial Domaigns Limited
1
Ordinary shares – Holding company
Financial Domaigns Registry
HoldingsLimited
Ordinary shares 100% Holding company
Financial Domaigns Registrar Limited
1
Ordinary shares – Domains registrar
Financial Domaigns (Services) Limited
1
Ordinary shares – Domains registry
Deal City Limited Ordinary shares 100% ETF trading
InvestYourWay Limited
1
Ordinary shares – Non-trading
IG Trading and Investments Limited Ordinary shares 100% Non-trading
IG Australia Pty Limited Level 15, 55 Collins Street,
Melbourne VIC 3000
Australia
Ordinary shares 100% Sales and marketing
office
IG Share Trading Australia Pty Limited Ordinary shares 100% Non-trading
IG Asia Pte Limited 9 Battery Road,
01-02 MYP Centre,
049910 Singapore
Ordinary shares 100% CFD trading and
foreign exchange
Kunxin Translation (Shenzhen)
Co.Limited
19-B16, Shenzhen Dinghe Tower,
No.100 of Fuhua 3rd Road,
Fuan Community,
Futian District,
Shenzhen
Ordinary shares 100% Translation services
180
FINANCIAL STATEMENTS
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Notes to the Financial Statements continued
Name of Company
Registered office and
country of incorporation Holding Voting rights Nature of business
IG Securities Limited Izumi Garden Tower 26F,
1-6-1 Roppongi,
Minato-ku,
106- 6026 Tokyo
Ordinary shares 100% CFD trading and
foreign exchange
IG Europe GmbH Westhafenplatz 1,
Frankfurt am Main,
60327 Germany
Ordinary shares 100% CFD trading and
foreign exchange
IG Bank S.A. 42 Rue du Rhone,
Geneva,
1204 Switzerland
Ordinary shares 100% CFD trading and
foreign exchange
IG Infotech (India) Private Limited Infinity, 2nd Floor, Katha No 436,
Survey No 13/1B, 12/2B,
Challagatta Village,
Bangalore,
560071 India
Ordinary shares 100% Software
development and
support services
IG US Holdings Inc. 251 Little Falls Drive,
Wilmington,
Delaware,
19808 US
Ordinary shares 100% Holding company
Market Risk Management Inc. Ordinary shares 100% Market maker
FX Publications Inc Ordinary shares 100% Publications
IG US LLC Ordinary shares 100% Foreign exchange
trading
Fox Sub Limited
1
57/63 Line Wall Road,
Gibraltar
Ordinary shares 100% Financing
Fox Sub 2 Limited Ordinary shares 100% Financing
Fox Japan Holdings Ordinary shares 100% Holding company
IG Limited Office 2&3, Level 27,
Currency House – Tower 2,
Dubai International
FinancialCentre,
P O Box – 506968 Dubai,
United Arab Emirates
Ordinary shares 100% CFD trading and
foreign exchange
Brightpool Limited Christodoulou Chatzipavlou,
221 Helios Court,
3rd floor 3036,
Limassol
Cyprus
Ordinary shares 100% Market maker
IG Markets Kenya Limited William House,
4th Ngong Avenue,
Nairobi,
Nairobi West District,
P O B ox 4 0111,
00100 Kenya
Ordinary shares 100% Non-trading
Spectrum MTF Operator GmbH
Raydius GmbH
Westhafenplatz 1,
Frankfurt am Main,
60327
Germany
Ordinary shares 100% Multilateral Trading
Facility
Issuer of turbo
warrants
IG International Limited Canon’s Court,
22 Victoria Street,
Hamilton,
HM 12 Bermuda
Ordinary shares 100% CFD trading and
foreign exchange
IG Securities Hong Kong Limited 19/F, Lee Garden One,
33 Hysan Avenue Causeway Bay
Hong Kong
Ordinary shares 100% Financial services
tastytrade, Inc.
3
1000 W Fulton Market St,
Suite 220
Ordinary shares 100% Holding company
33. Investments in subsidiaries continued
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Name of Company
Registered office and
country of incorporation Holding Voting rights Nature of business
tastyworks, Inc
2
327 N Aberdeen,
Chicago,
IL 60607
Ordinary shares 100% Brokerage firm
tastyworks Australia, Pty Ltd.
2
Unit 13, 5 Gladstone Rd,
Castle Hill
NSW 2154
Ordinary shares 100% Australian brokerage
firm
tastyworks Canada, Inc
2
800 – 885 West Georgia Street,
Vancouver BC,
V6C 3H1 Canada
Ordinary shares 100% Canadian brokerage
firm
Quiet Foundation, Inc.
2
327 N Aberdeen,
Chicago,
IL 60607
Ordinary shares 100% Investment advisory
Dough LLC
2
19 N Sangamon St,
Chicago,
IL 60607
Ordinary shares 100% Inactive
Tastyworks Singapore Pte #28-00,
One Marina Boulevard,
Singapore (018989)
Ordinary shares 100% Singaporean
brokerage firm
1 The subsidiary entered into Members’ Voluntary Liquidation (solvent liquidation) and was handed over to liquidators on 28 May 2021.
2 The subsidiary was acquired on 28 June 2021.
3 As part of the acquisition of tastytrade, Inc., a series of merger transactions took place between Spring Merger Sub I, Inc., Spring Merger Sub II, Inc. and the acquired tastytrade, Inc.
Thesurviving entity resulting from the series of merger was Spring Merger Sub II, Inc. which was subsequently renamed as tastytrade, Inc.
The following UK entities, all of which are 100% owned by the Group, are not subject to an audit by virtue of s479A of the
Companies Act 2006 relating to subsidiary companies: IG Finance 9 Limited (07306407) and Deal City Limited (09635230).
Financial Domaigns Registry Holdings Limited (09235699) is a UK entity, which is 100% owned by the Group and is exempt from
the requirement to prepare individual financial statements by virtue of s394A of the Companies Act 2006 relating to the
individual financial statements of dormant subsidiaries.
Employee Benefit Trusts:
IG Group Holdings plc Inland Revenue Approved Share Incentive Plan (UK Trust)
IG Group Limited Employee Benefit Trust (Jersey Trust)
IG Group Employee Equity Plan Trust (Australian Trust)
34. Subsequent events
On 1 July 2022, the Group signed an Accordion Increase Request increasing the revolving credit facility by £25.0 million. This
increase is effective from 1 August 2022.
On 20 July 2022, the Board approved a share buyback programme of up to £150.0 million, commencing 21 July 2022. The share
buyback programme is expected to be substantially completed during the FY23 period.
There have been no other subsequent events that have material impact on the Group’s Financials Statements.
33. Investments in subsidiaries continued
182
FINANCIAL STATEMENTS
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Company Financial Statements
A year of change;
accelerating growth
PG. 182–191
Primary Statements
Company Statement of Financial Position 183
Company Statement of Changes in Equity 184
Company Statement of Cash Flows 185
Notes to the Company Financial Statements
1. Authorisation of Financial Statements and
statement of compliance 186
2. Accounting policies 186
3. Auditors’ remuneration 186
4. Directors’ remuneration 186
5. Staff costs 186
6. Investment in subsidiaries 187
7. Leases liabilities 187
8. Cash flow information 188
9. Other receivables 189
10. Debt securities in issue 189
11. Other payables 189
12. Share capital and share premium 189
13. Related party transactions 190
14. Other reserves 190
15. Directors’ shareholdings 190
16. Contingent liabilities and provisions 190
17. Financial risk management 191
18. Subsequent events 191
19. Dividends paid and proposed 191
183
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Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Note
31 May 2022
£m
31 May 2021
£m
Assets
Non-current assets
Investment in subsidiaries 6 1,076.3 553.3
Right-of-use asset 7 5.0 6.1
Other receivables 9 298.3 –
1,379.6 559.4
Current assets
Prepayments 2.2 0.5
Other receivables 9 383.1 209.2
Cash and cash equivalents 1.8 0.4
387.1 210.1
TOTAL ASSETS 1,766.7 769.5
Liabilities
Non-current liabilities
Debt securities in issue 10 297.2 –
Lease liabilities 7 4.3 6.0
301.5 6.0
Current liabilities
Other payables 11 13.9 18.1
Lease liabilities 7 2.1 1.8
16.0 19.9
TOTAL LIABILITIES 317.5 25.9
Equity
Share capital and share premium 12 125.8 125.8
Merger reserve 590.0 81.0
Other reserves 14 7.5 7. 9
Retained earnings 725.9 528.9
Total equity 1,449.2 743 .6
TOTAL EQUITY AND LIABILITIES 1,766.7 769.5
The Company’s profit for the year was £375.9 million (2021: profit of £223.8 million).
The Financial Statements of IG Group Holdings plc (registered number 04677092) were approved by the Board of Directors on
20 July 2022 and signed on its behalf by:
Charles Rozes
Chief Financial Officer
Company Statement of Financial Position
as at 31 May 2022
184
FINANCIAL STATEMENTS
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Share capital
£m
Share premium
£m
Merger reserve
£m
Other reserves
£m
Retained earnings
£m
Total equity
£m
At 1 June 2020 – 125.8 81.0 7.1 458.4 672.3
Profit and total comprehensive income
forthe year – – – – 223.8 223.8
Equity-settled employee share-based
payments – – – 7. 4 – 7.4
Employee Benefit Trust purchase of own
shares – – – (0.2) – (0.2)
Equity dividends paid – – – – (159.7) (159.7)
Transfer of vested awards from the
share-based payment reserve – – – (6.4) 6.4 –
At 31 May 2021 – 125.8 81.0 7.9 528.9 743.6
At 1 June 2021 - 125.8 81.0 7. 9 528.9 743.6
Profit and total comprehensive income
forthe year – – – – 375.9 375.9
Equity-settled employee share-based
payments – – – 13.6 – 13.6
Employee Benefit Trust purchase of own
shares – – – (6.7) – (6.7)
Transfer of vested awards from the
share-based payment reserve – – – (7. 3) 7.3 –
Equity dividends paid – – – – (186.2) (186.2)
Issue of ordinary share capital for the
acquisition of tastytrade – – 509.0 – – 509.0
At 31 May 2022 - 125.8 590.0 7.5 725.9 1,449.2
Company Statement of Changes in Equity
for the year ended 31 May 2022
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IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Note
Year ended
31 May 2022
£m
Year ended
31 May 2021
£m
Operating activities
Cash generated from operations 8 203.9 164.7
Net cash flow generated from operating activities 203.9 164.7
Investing activities
Investment in subsidiary – (4.0)
Loan issued to Group companies (298.3) –
Net cash flow used in investing activities (298.3) (4.0)
Financing activities
Interest paid on lease liabilities (0.2) (0.2)
Interest and other financing costs paid (8.4) –
Repayment of principal element of lease liabilities (1.9) (0.3)
Net proceeds from issue of debt securities 299.2 –
Equity dividends paid to owners of the parent (186.2) (159.7)
Employee Benefit Trust purchase of own shares (6.7) (0.3)
Net cash flow from/(used in) financing activities 95.8 (160.5)
Net increase in cash and cash equivalents 1.4 0.2
Cash and cash equivalents at the beginning of the year 0.4 0.2
Cash and cash equivalents at the end of the year 1.8 0.4
Company Statement of Cash Flows
for the year ended 31 May 2022
186
FINANCIAL STATEMENTS
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
1. Authorisation of Financial Statements and statement of compliance
The Financial Statements of IG Group Holdings plc (the Company) for the year ended 31 May 2022 were authorised for issue by
the Board of Directors on 20 July 2022 and Statement of Financial Position was signed on the Board’s behalf by Charles Rozes.
IG Group Holdings plc is a public company limited by shares, which is listed on the London Stock Exchange and incorporated
inthe United Kingdom and domiciled in England and Wales. The address of the registered office is Cannon Bridge House,
25Dowgate Hill, London, EC4R 2YA.
On 31 December 2020, IFRS as adopted by the European Union was brought into UK law and became UK-adopted International
Accounting Standards, with future changes being subject to endorsement by the UK Endorsement Board. The Company
transitioned to UK-adopted International Accounting Standards in the Company Financial Statements on 1 June 2021. This
change constitutes a change in accounting framework. However, there is no impact on recognition, measurement or disclosure
in the period reported as a result of the change in framework.
The Financial Statements of the Company have been prepared in accordance with UK-adopted International Accounting
Standards and with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards.
There were no unendorsed standards effective for the year ended 31 May 2022 affecting these consolidated and separate
Financial Statements.
The Financial Statements have been prepared under the historical cost convention and in conformity with UK-adopted
International Accounting Standards requires the use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Company’s accounting policies. There are no significant areas of
judgement or complexity, or areas where assumptions and estimates are significant to the Company’s Financial Statements.
As permitted by Section 408(1)(b), (4) of the Companies Act 2006, the individual Income Statement of IG Group Holdings plc
(the Company) has not been presented in these Financial Statements. The amount of profit for the year included within the
Financial Statements of IG Group Holdings plc is £375.9 million (year ended 31 May 2021: £223.8 million). A Statement of
Comprehensive Income for IG Group Holdings plc has also not been presented in these Financial Statements. No items of other
comprehensive income arose in the year (31 May 2021: £nil).
2. Accounting policies
The accounting policies applied are the same as those set out in note 2 of the Group Financial Statements except for
thefollowing:
Investment in subsidiaries
Subsidiaries are entities on which the Company has control. Control is achieved where the Company has existing rights that give
it the ability to direct the activities that affect the Company’s returns and exposure or rights to variable returns from the entity.
Investments in subsidiaries are stated at cost less accumulated impairment losses.
Impairment of investment in subsidiaries
The Directors of the Company carry out an annual assessment to determine if any indication of impairment exits. If such
indicators are identified, then the amount of impairment is ascertained by comparing the carrying amount of the investment in
each subsidiary to its recoverable amount. The recoverable amount of a subsidiary is determined based on value-in-use
calculations (VIU) which requires the use of assumptions. The calculation of VIU incorporates cash flow projections based on
financial budgets approved by management.
Dividends
Dividends receivable are recognised when the shareholders’ right to receive the payment is established.
3. Auditors’ remuneration
Auditors’ remuneration is disclosed within note 5 of the Group Financial Statements.
4. Directors’ remuneration
Directors’ remuneration is disclosed within the Director’s Remuneration Report section of the Annual Report.
5. Staff costs
The Company has no employees (31 May 2021: nil).
Notes to the Company Financial Statements
187
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IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
6. Investment in subsidiaries
At cost
31 May 2022
£m
31 May 2021
£m
At the beginning of the year 553.3 541.9
Additions 1,027.1 11. 4
Disposals (504 .1) –
At the end of the year 1,076.3 553.3
Additions during the year include the acquisition of tastytrade, Inc. As part of the acquisition of tastytrade, a series of merger
transactions took place between Spring Merger Sub I, Inc., Spring Merger Sub II, Inc. and the acquired tastytrade, Inc.
Thesurviving entity resulting from the series of mergers was Spring Merger Sub II, Inc. which was subsequently renamed as
tastytrade, Inc. Refer to note 30 and note 33 for further information. Immediately following the acquisition of tastytrade, Inc.,
the Company contributed its investment in tastytrade, Inc, to its wholly owned subsidiary, IG Group Limited and in return
received 100 ordinary shares in IG Group Limited.
The Company’s direct and indirectly owned subsidiaries are disclosed in note 33 of the Group Financial Statements.
The investments in subsidiaries are assessed annually by the Directors of the Company, to determine if there is any indication
that any of the investments might be impaired. Based on an assessment carried out, the carrying amount of the Company’s
investments in subsidiary is supported by the net present value of future cash flows. Therefore, no impairment was recognised
during the current year.
Additions in the year include also equity-settled share-based awards for employees of subsidiaries of £13.6 million (year ended
31 May 2021: £7.4 million).
7. Leases
(i) Right-of-use asset
31 May 2022
£m
31 May 2021
£m
Cost:
At the beginning of the year 9.2 9.0
Additions 0.5 –
Dilapidation adjustment – 0.2
At the end of the year 9.7 9.2
Accumulated depreciation:
At the beginning of the year 3.1 1.5
Provided during the year 1.6 1.6
At the end of the year 4.7 3 .1
Net book value 5.0 6.1
The Company’s right-of-use asset represents the commercial lease for office space. The table below shows the discounted
rental commitments under non-cancellable operating leases.
Future minimum payments due:
31 May 2022
£m
31 May 2021
£m
Not later than one year 2.1 1.8
After one year but not more than five years 4.3 6.0
6.4 7. 8
The following table shows the maturity analysis of the undiscounted cash flows for non-cancellable leases. Balances due within
12months equal their carrying balances as the impact of discounting is not significant.
188
FINANCIAL STATEMENTS
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Notes to the Company Financial Statements continued
7. Leases continued
(ii) Lease liability
Future minimum payments due:
Year ended
31 May 2022
£m
Year ended
31 May 2021
£m
Within one year 2.1 1.8
After one year but not more than five years 4.5 6.2
6.6 8.0
8. Cash flow information
31 May 2022
£m
31 May 2021
£m
Operating activities
Operating loss (9.0) (24.2)
Dividends received 385.0 248.2
Lease asset depreciation 1.6 1.6
Increase in trade and other receivables (169.0) (75.2)
Increase/(decrease) in trade and other payables (4.7) 14.3
Cash generated from operations 203.9 164.7
Included within operating loss are legal and professional fees incurred in relation to the acquisition of tastytrade. For further
details refer to note 30 of the Group Financial Statements.
Liabilities arising from financing activities
Debt securities
in issue
£m
Leases
£m
Total
£m
Liabilities as at 1 June 2020 – 7.7 7.7
Lease payments made in the period – (0.5) (0.5)
Unwinding of discount – 0.2 0.2
Changes to existing lease agreements – 0.4 0.4
Liabilities as at 31 May 2021 – 7. 8 7. 8
Liabilities as at 1 June 2021 – 7.8 7.8
Issued Debt 299.2 – 299.2
Financing arrangement fees (2 .1) – (2.1)
Unwind of capitalised financing fees 0.1 – 0.1
Lease payments made in the period – (2.1) (2.1)
Unwinding of discount – 0.2 0.2
Changes to existing lease agreements – 0.5 0.5
Liabilities as at 31 May 2022 297. 2 6.4 303.6
189
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Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
9. Other receivables
31 May 2022
£m
31 May 2021
£m
Amounts due from Group companies:
– IG Markets Limited 370.3 205.5
– IG Index Limited 11.1 3.3
– Other Group companies 0.8 0.3
Other debtors 0.9 0.1
383.1 209.2
All amounts above are repayable on demand and are non-interest bearing.
Under the Group’s cash management framework, entities holding cash that is surplus to short term requirements generally lend
the money to IG Markets Limited. In addition to the £370.3 million due from IG Markets Limited outlined above, the Company
has entered into an agreement with IG Markets Limited to provide a £298.3 million loan with an interest rate of 3.125% per
annum to be repaid as one final payment in November 2028. This is classified within non-current other receivables in the
Statement of Financial Position.
10. Debt securities in issue
The Company undertook a debt financing exercise and implementation of a long-term funding structure, which was completed
in November 2021. The financing involved the following:
¼ Issue of £299.2 million 3.125% senior unsecured bonds due 2028.
¼ A £300.0 million committed revolving credit facility, with an initial maturity of three years.
The issued debt has been recognised at fair value less transaction fees. As at 31 May 2022, £2.0 million unamortised
arrangement fees are recognised on the Statement of Financial Position. Unamortised arrangements fees of £1.6 million in
relation to the revolving credit facility have been recognised on the Statement of Financial Position.
The Company has the option to request an increase in the revolving credit facility size to £400.0 million and to request two
maturity extensions of one year each, all subject to bank approval. Total available credit facilities as at 31 May 2022 were £600.0
million (31 May 2021: £nil), with the potential to rise to £700.0 million if the revolving credit facility is increased in size.
Under the terms of the revolving credit facility agreement, the Company is required to comply with financial covenants covering
maximum levels of leverage and debt to equity for Group at a consolidated level. The Company has complied with all covenants
throughout the reporting period.
11. Other payables
31 May 2022
£m
31 May 2021
£m
Accruals 13.9 17. 3
Amounts due to Group companies – 0.8
13.9 18.1
12. Share capital and share premium
Share capital and share premium is disclosed within note 23 of the Group Financial Statements.
190
FINANCIAL STATEMENTS
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Notes to the Company Financial Statements continued
13. Related party transactions
Transactions with related parties are as follows:
31 May 2022
£m
31 May 2021
£m
Revenue:
Subsidiary – dividends 385.0 248.2
385.0 248.2
Finance income:
Subsidiary 5.1 –
5.1 –
Refer to note 9 for balances outstanding in respect of related parties.
14. Other reserves
Share-based
payments
£m
Own shares held
in Employee
Benefit Trusts
£m
Total other
reserves
£m
At 1 June 2020 11. 7 (4.6) 7.1
Equity-settled employee share-based payments 7. 4 – 7.4
Exercise of employee share awards (3.2) 3.2 –
Employee Benefit Trust purchase of shares – (0.2) (0.2)
Transfer of vested awards from the share-based payments reserve (6.4) – (6.4)
At 31 May 2021 9.5 (1.6) 7. 9
As at June 2021 9.5 (1.6) 7.9
Equity-settled employee share-based payments 13.6 – 13.6
Exercise of employee share awards (2.3) 2.3 –
Employee Benefit Trust purchase of shares – (6.7) (6.7)
Transfer of vested awards from the share-based payments reserve (7.3) – (7. 3)
At 31 May 2022 13.5 (6.0) 7.5
15. Directors’ shareholdings
The Directors of the Company hold shares as disclosed in the Remuneration Report in the Group Annual Report.
16. Contingent liabilities and provisions
In the ordinary course of business, the Company is required to issue guarantees on behalf of its subsidiaries. These primarily
relate to guarantees provided to third-party banks and hedging counterparties. Under the terms of the agreements the
Company acts as guarantor for unsettled liabilities that may arise under other agreements between Group companies and
financial institutions. The amounts guaranteed by the Company as at 31 May 2022 was £0.2 million (31 May 2021: £0.4 million).
191
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Shareholder and
Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
17. Financial risk management
Financial risks arising from financial instruments are managed at a Group-wide level and details are in the Risk Management
section of the Group Annual Report.
Credit risk
Held within other receivables are amounts receivable by the Company from related parties that are unrated. The Directors
consider the Company’s receivables to be recoverable as they are with Group companies and the companies have adequate
resource to ensure repayment in full. Therefore, credit risk is minimal.
Liquidity risk
The tables below analyse the Company’s financial liabilities into relevant maturity categories based on their contractual
maturities. The amounts disclosed in the table are the contractual undiscounted cash flows. The Company is able to obtain
financial support from other Group companies if this is needed. Therefore, liquidity risk is minimal.
31 May 2022
Within
1 year
£m
Between
2 and 5 years
£m
Over
5 years
£m
Total
£m
Carrying amount
£m
Issued debt securities 9.4 37.6 304.7 351.7 299.2
Lease liabilities 2.1 4.5 – 6.6 6.6
Total 11. 5 42.1 304.7 358.3 305.8
31 May 2021
Within
1 year
£m
Between
2 and 5 years
£m
Over
5 years
£m
Total
£m
Carrying amount
£m
Lease liabilities 1.8 6.2 – 8.0 8.0
Total 1.8 6.2 – 8.0 8.0
Capital management
The capital of the Company is managed as part of the capital of the Group. Full details, including details of dividends paid during
the year, are contained in the Group Financial Statements in note 28.
18. Subsequent events
The subsequent events of the entity are the same as those disclosed in the notes to the Group Financial Statements in note 34.
19. Dividends paid and proposed
The dividends paid and proposed by the entity are the same as those disclosed in the notes to the Group Financial Statements
in note 11.
192
SHAREHOLDER AND COMPANY INFORMATION
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Shareholder information
Shareholder communications
You can opt to receive communications from us by email
rather than by post and we will email you whenever we add
shareholder communications to the Company website. To set
this up, please visit www.investorcentre.co.uk/ecomms and
register for electronic communications.
If you wish to change this instruction you can do so by
contacting our Registrar at the address shown overleaf.
Youcan also make this request online via your Investor
Centreaccount.
The Registrar can also be contacted by telephone on +44
(0)371 495 2032. Calls to this number cost no more than a
national rate call from any type of phone or provider. These
prices are for indication purposes only; if in doubt, please
check the cost of calling this number with your phone line
provider. Lines are open 8.30am to 5.30pm, Monday to Friday
excluding bank holidays.
Shareholder enquiries
If you have any queries relating to your shareholding, dividend
payments, lost share certificates, or change of personal
details, please contact Computershare by visiting
www.investorcentre.co.uk or by using the contact
detailsabove.
American Depositary Receipts (ADRs)
IG’s ADR programme trades in the US OTC market, under the
symbol IGGHY. Each ADR currently represents one ordinary
share.
Dividend dates
Ex-dividend date 22 September 2022
Record date 23 September 2022
Last day to elect for dividend
reinvestment plan 29 September 2022
Final dividend payment date 20 October 2022
Annual shareholder calendar
Company reporting
Final results announced 21 July 2022
Annual Report published 15 August 2022
Annual General Meeting 21 September 2022
Interim report
As part of our e-comms programme, we have decided not to
produce a printed copy of our Interim Report. We will instead
publish the report on our website, where it will be available
around mid-January each year.
Company information
Directors (as at 20 July 2022)
Executive Directors
J Y Felix (Chief Executive Officer)
C A Rozes (Chief Financial Officer)
J M Noble (Chief Operating Officer)
Non-Executive Directors
R M McTighe (Chair)
J P Moulds
R Bhasin
A Didham
Wu Gang
S-A Hibberd
M Le May
S Skerritt
H C Stevenson
Company Secretary
J S Nayler
Registered number
04677092
Registered office
Cannon Bridge House
25 Dowgate Hill
London
EC4R 2YA
Bankers
Barclays Bank plc
1 Churchill Place
London
E14 5HP
HSBC Holdings plc
8 Canada Square
London
E14 5HQ
Lloyds Banking Group plc
25 Gresham Street
London
EC2V 7HN
Royal Bank of Scotland plc
36 St Andrew Square
Edinburgh
EH2 2YB
Shareholder and Company Information
193
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Brokers
Barclays Bank plc
5 The North Colonnade
Canary Wharf
London
E14 4BB
Numis Securities Limited
45 Gresham Street
London
EC2V 7BF
Independent Auditors
PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
7 More London Riverside
London
SE1 2RT
Solicitors
Linklaters LLP
1 Silk Street
London
EC2Y 8HQ
Registrar
Computershare Investor Services PLC
The Pavilions
Bridgewater Road
Bristol
BS99 6ZZ
Cautionary statement
Certain statements included in our 2022 Annual Report,
orincorporated by reference to it, may constitute ‘forward-
looking statements’ in respect of the Group’s operations,
performance, prospects and/or financial condition.
Forward-looking statements involve known and unknown
risksand uncertainties because they are beyond the Group’s
control and are based on current beliefs and expectations
about future events about the Group and the industry in which
the Group operates.
No assurance can be given that such future results will be
achieved; actual events or results may differ materially as a
result of risks and uncertainties facing the Group. If the
assumptions on which the Group bases its forward-looking
statements change, actual results may differ from those
expressed in such statements. The forward-looking
statements contained herein reflect knowledge and
information available at the date of this Annual Report and the
Group undertakes no obligation to update these forward-
looking statements except as required by law.
This report does not constitute or form part of any offer or
invitation to sell, or any solicitation of any offer to purchase,
any shares or other securities in the Company, and nothing in
this report should be construed as a profit forecast.
Market share
Market share data has been provided by Investment Trends
PtyLimited (website: www.investmenttrends.com/).
Contact:Brian Chong (email: b.chong@investmenttrends.com).
Unless stated, market share data is sourced from the following
current reports:
¼ Investment Trends France Leverage Trading Report,
released August 2021
¼ Investment Trends US Leverage Trading Report,
releasedSeptember 2021
¼ Investment Trends Singapore Leverage Trading Report,
released October 2021
¼ Investment Trends Australia Leveraged Trading Report,
released December 2021
¼ Investment Trends Hong Kong Warrants & FX Report,
released February 2022
¼ Investment Trends Germany Leverage Trading Report,
released March 2022
¼ Investment Trends Spain Leverage Trading Report,
releasedApril 2022
¼ Investment Trends UK Leverage Trading Report,
releasedJune 2022
194
SHAREHOLDER AND COMPANY INFORMATION
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Adjusted net trading revenue
£ million FY22 FY21 Change %
Net trading revenue 972.3 837. 3 16%
Hedging (gain)/loss on
tastytrade acquisition (5.8) 7. 9 nm
Adjusted net trading
revenue 966.5 845.2 14%
Core Markets+ 828.7 825.2 –
High Potential Markets 137. 8 20.0 589%
Adjusted operating costs
£ million FY22 FY21
Operating costs 499.2 390.5
¼ Net credit losses on financial assets 2.7 2.9
Adjusted operating costs inc.
netcredit losses 501.9 393.4
¼ Operating costs relating to the
tastytrade acquisition and
integration (2.0) (19.6)
¼ Amortisation on tastytrade
acquisition intangibles and recurring
non-cash costs (31.7) –
¼ Operating costs relating to the
Nadex sale (3.3) –
Adjusted operating costs 464.9 373.8
Adjusted profit before tax and earnings per share
£m (unless stated) FY22 FY21
Earnings per share (pence) 92.9 99.8
Weighted average number of
sharesfor the calculation of EPS
(millions) 426.3 369.2
Profit after tax 396.1 368.6
Tax expense 80.9 77.4
Profit before tax 477. 0 446.0
¼ Hedging (gain)/loss on tastytrade
acquisition (5.8) 7. 9
¼ Operating income relating to
Nadex sale (1.5) –
¼ Operating costs relating to the
tastytrade acquisition and
integration 2.0 19.6
¼ Amortisation on tastytrade
acquisition intangibles and
recurring non-cash costs 31.7 –
¼ Operating costs relating to the
Nadex sale 3.3 –
¼ Financing costs relating to the
debt issuance 1.0 –
¼ Gains on sale of Small Exchange
and disposal of Zero Hash (4.1) –
¼ Movement in the FV of
convertible debt associated with
Zero Hash (9.3) –
Adjusted profit before tax (A) 494.3 473.6
Adjusted tax expense (83.8) (77.4)
Adjusted profit after tax 410.5 396.2
Adjusted earnings per share
(pence) 96.3 107.3
Adjusted total revenue (B) 967. 3 845.5
Adjusted profit before tax margin
(A/B) % 51% 56%
High Potential Markets total revenue – pro forma
£ million FY22 FY21 Change %
US options and futures
(tastytrade) 112 . 0 96.1 16%
US FX 16.6 11. 6 43%
European ETDs 9.3 4.9 90%
US market making 1.8 3.5 (49%)
Pro forma High Potential
Markets¹ 139.7 116 .1 20%
1 Pro forma basis reflects revenue from tastytrade in the period post-acquisition, from
28 June 2021 to 31 May 2022, and for the equivalent prior period in FY21
Appendices
195
Introduction Strategic Report Governance Report Financial Statements
Shareholder and
Company Information
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Own cash
£ million Note 31 May 2022 31 May 2021
Cash and Cash equivalents 1,246.4 655.2
Financial investments –
termed cash 14 45.0 –
Less: Cash held to meet
regulatory liquidity
requirements (45.5) –
Own cash 1,245.9 655.2
Amounts due from brokers
£ million Note 31 May 2022 31 May 2021
Financial investments – UK
Government securities held
at brokers 14 289.9 256.0
Trade receivables –
amounts due from broker 16 381.0 424.3
Trade payables – amounts
due to broker 20 (28.0) –
Other assets 17 14.2 30.3
Amounts due from broker 657.1 710.6
Liquid assets threshold requirement
£ million Note 31 May 2022 31 May 2021
Financial investments –
regulatory liquidity
requirements 14 61.2 86.1
Cash held to meet
regulatory liquidity
requirements 45.5 –
Liquid assets threshold
requirement 106.7 86.1
Own funds in client money
£ million Note 31 May 2022 31 May 2021
Trade receivables – own
funds in client money 16 85.5 63.3
Trade payables – amounts
due to clients
1
20 (21.3) (2.4)
Own funds in client money 64.2 60.9
1 Amounts considered part of ‘own funds’.
Net own funds movement from acquisitions and
disposals of investments in subsidiaries and associates
£ million FY22
Net cash flow to investment in associates (1.9)
Net proceeds from disposal of subsidiaries 143.3
Proceeds from disposal of investments in
associates, net of cash disposed 24.5
Net cash flow to acquire subsidiaries (193.5)
Net own funds derecognised upon disposal of
subsidiary (2.7)
Net own funds recognised upon acquisition of
subsidiary 15.6
Net own funds movement from acquisitions
and disposals of investments in subsidiaries
andassociates (14.7)
Net own funds generated from operations
£ million FY22 FY21
Cash generated from operations 811. 4 573.5
¼ decrease in other assets (19.7) (0.4)
¼ Increase in trade payables (209.4) (222.2)
¼ (decrease)/increase in trade
receivables (37.7 ) 160.7
¼ Repayment of lease liabilities ( 7. 5 ) (5.2)
¼ Interest paid on lease liabilities (0.6) (0.6)
Own funds generated
from operations (A) 536.5 505.8
Profit before taxation (B) 477.0 446.0
Conversion rate from profit
to cash (A/B) % 112% 113%
196
SHAREHOLDER AND COMPANY INFORMATION
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022
Adjusted total revenue (£m)
Adjusted total revenue represents revenue from products and
services and interest on client money less cost of hedging,
excluding certain costs relating to the tastytrade acquisition.
Adjusted net trading revenue (£m)
Represents the transaction fees paid by clients (client income),
net of introducing partner commissions, our external hedging
costs, client trading profit and losses, and corresponding
hedging profits and losses, on an adjusted basis.
Adjusted net trading revenue generated from non-
OTC products (%)
Represents net trading revenue generated from exchange
traded derivatives and stock trading and investments, on an
adjusted basis.
Adjusted profit before tax margin (%)
Measures the profit that we generate as a percentage of total
revenue, prior to tax charges, on an adjusted basis.
Net own funds generated from operations (£m)
Measures the level of net own funds (cash) that we generate
from our operations after deductions for taxes.
Total number of active OTC derivative clients (000)
The total number of clients who have generated
revenue in the relevant financial year by trading
ourOTCderivative products.
Platform uptime (%)
This measures the percentage of time that IG’s online trading
platforms were online during the financial year. Partial outages
or degradation of service are included as uptime.
ESG KPI: scope 1–3 greenhouse gas emissions per
employee (TCO
2
e)
Total scope 1–3 greenhouse gas emissions in the financial
year, divided by average headcount during the year ended
31 May 2022.
ESG KPI: young people benefiting from our Brighter
Future initiatives globally
Total benefiting from collaboration between IG Group and
charity partners such as Teach First. This includes both direct
and indirect impact.
Group-wide Key Performance Indicator (KPI) Definitions
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IG Group Holdings plc
Cannon Bridge House
25 Dowgate Hill
London EC4R 2YA
T: +44 (0)20 7896 0011
F: +44 (0)20 7896 0010
W: iggroup.com
IG GROUP HOLDINGS PLC ANNUAL REPORT 2022