IG Group Withdraws From Binary Betting After Watchdog Clampdown

IG Group withdraws from binary betting after watchdog clampdown.
Britain’s biggest financial spread betting firm has rowed back on one of its binary options betting products in the wake of the financial watchdog’s clampdown on the industry.
IG Group has said it would no longer offer its ‘Sprints’ product to new clients, less than two months after more than £1bn was wiped off its value as the Financial Conduct Authority unveiled a raft of measures to tighten the rules governing spread betting.
The FTSE 250 company has insisted the decision to withdraw the binary options product is not a result of the FCA’s intervention, instead saying that it no longer fits with its approach, which is being geared more towards sophisticated trading and investing. It added that Sprints, which currently generates around £15m of annualised revenue, https://Genericialisio.com/ is not being withdrawn from the clients who currently use it.
"We felt at this stage that the Sprints product just does not fit with where the business is headed," said Kieran McKinney, director of corporate affairs. "In reality we are probably getting ahead of the regulation here.
"I think that product will come under regulatory pressure in the future. That does not influence our view - it’s simply a fact."
Binary options are one of a number of forms of betting under examination by the FCA. It lets punters place bets on whether the price of an index, for example, will be up or down at close of trading.
It has grown increasingly popular in recent years, although Mr McKinney added that it had been "tarnished" by unscrupulous operators.
"It’s never nice to see negative press on a product that you’re proud of," he said. "It’s frustrating to see poor operators tarnishing it as a product. It’s not just the binary option - we’ve seen this in so many financial products."
Analysts from Liberum said they believed the withdrawal of the product to be a "pre-emptive measure to mitigate further regulation".
It comes as IG Group reported that pre-tax profit for the six months to November 30 had increased by almost 7pc compared to the same period a year ago, while there had been a 59pc jump in new client numbers.
"This has been another good six months for the business, with record revenue, a new high in active client numbers, and ongoing success in attracting and developing the next generation of traders," said chief executive Peter Hetherington.
The company’s share price was down nearly 4pc following the announcement.