## Empowering ambition, ## enabling freedom ### IG GROUP HOLDINGS PLC ### ANNUAL REPORT 2023 Shareholder and IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information ## Welcome to our ## Annual Report 2023 Who we are We are a purpose-led global fintech at the forefront of trading innovation since 1974. What we do We empower self-directed traders around the world by unlocking real-time trading opportunities, through our award-winning products, educational content and platforms. Why a landscape report this year? This report has been designed in a landscape format to optimise the online reading experience. Navigating this report The navigation buttons at the top of the page will guide you throughout the report. Click on the tabs for the start of key sections, or the buttons to view the next and previous pages. BACK TO CONTENTS NEXT PAGEPREVIOUS PAGE Vonetta Logan, On-Air Personality, tastylive Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 01IG GROUP HOLDINGS PLC Annual Report 2023 Company Information ### Inside this report Introduction 01 FY23 Highlights 02 At a Glance 03 Chair’s Statement 04 Chief Executive Officer’s Statement 06 Strategic Report 09 Our Purpose and Values 09 Business Model 10 Key Trends Likely to Affect Our Business 12 Key Performance Indicators (KPIs) 14 ## Powering the pursuit Strategic Update 15 Stakeholder Engagement 20 Section 172(1) Statement 22 ## offinancial freedom ESG Report 23 Task Force on Climate-related Financial Disclosures 29 Streamlined Energy and Carbon Report 31 ## for the ambitious.” Diversity Report 32 Non-Financial and Sustainability Information Statement 35 Trophy Cabinet 36 Chief Financial Officer’s Statement 37 Business Performance Review 39 Risk Management 48 Principal Risks and Risk Appetite 49 Going Concern and Viability Statement 54 Governance Report 56 Chair’s Introduction to Corporate Governance 56 The Board 58 Governance Framework 62 Board Governance 64 Board Activities During the Year 67 Engagement with employees 69 Understanding our Stakeholders 70 Board Evaluation 72 Nomination Committee Report 74 ESG Committee Report 76 Audit Committee Report 78 Board Risk Committee Report 85 Directors’ Remuneration Report and Policy 89 Remuneration at a glance 95 FY23 Directors’ Remuneration Policy 96 Annual Report on Remuneration 105 Directors’ Report 119 Statement of Directors’ Responsibilities 122 Independent Auditors’ Report 123 Financial Statements 131 Shareholder and Company Information 190 Shareholder and Company Information 190 Appendices 191 Group-wide Key Performance Indicator (KPI) Definitions 194 Shareholder and Annual Report 2023IG GROUP HOLDINGS PLC02 Introduction Strategic Repot Governance Repot Financial Statements Company Information ### FY23 Highlights ## Our year ## in summary 1 | A snapshot of our year | Financial | | | | | | --- | --- | --- | --- | --- | --- | | We are delighted to report a fourth | | 2 | | 4 | | | | Total revenue | | Basic earnings per share | | Total dividend per share | consecutive record year, with total revenue exceeding £1 billion for the first time, ## anexciting milestone which reflects the £1,022.6m 86.9p 45.2p success of our strategy. | | (FY22: £973.1m) | | (FY22: 92.9p) | (FY22: 44.2p) | | | --- | --- | --- | --- | --- | --- | | BUSINESS PERFORMANCE REVIEW | | 3 | | | 5 | | | Profit before tax | | Net own funds generated from | Share buyback announced | | PG. 39 operations ## £449.9m £250m ## £350.9m (FY22: £477.0m) (FY22: £437.3m) See appendices for reconciliation to statutory measures. 1 Numbers are presented on a continuing operations basis 2 On an adjusted basis, total revenue for FY22 was £967.3 million. Total revenue is calculated as net trading revenue plus net interest income. See appendices for reconciliation 3 On an adjusted basis, profit before tax was £490.5 million (FY22: £494.3 million) 4 On an adjusted basis, earnings per share was 94.7 pence (FY22: 96.3 pence) 5 Represents the value of share buyback announced at the full year results Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 03IG GROUP HOLDINGS PLC Annual Report 2023 Company Information ### At a Glance ## Empowering ambition, ## inspiring tomorrow About us Products Our market-leading brands We are a purpose-led global fintech at the Over-the-counter derivatives forefront of trading innovation since 1974. (OTC) Our clients are ambitious and are looking to take control of their financial future. Our Exchange-traded derivatives award-winning products, educational content (ETD) and platforms empower self-directed people the world over to unlock trading opportunities around the clock. Stock trading and investments We are an established member of the FTSE 250 and have an investment grade credit rating. Content and education Our client proposition  Market access – we provide access to around 19,000 markets globally  Superior trade execution – 99% of orders filled at desired price or better  Platform reliability – we pride ourselves on the reliability of our platform, whatever the market conditions  Content and education – we have a wide OTC revenue 79 % range of tools, content and education for ETD revenue 18% all levels of client experience  Client servicing – we take a personal approach to dealing with our clients  Reputation – client surveys show our reputation is one of the top reasons they chose us tastylive Bad Trader tour, Phoenix Stock trading 3% Shareholder and ### 04 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information ### Chair’s Statement As I look back over the year, one aspect of Experiencing this first-hand has really brought ## We delivered business I have been particularly struck by home the importance of interpersonal isthe tremendous impact of being able to connections in building a strong workplace reconnect again in person. culture, founded on confidence and ## another year of understanding. We are seeing the benefits There is no doubt the pandemic has created ofthe return to office in delivering inspiring arelationship deficit that we are still working ## record total experiences for our employees. At the same to fill. Hundreds of new employees have joined time, we are also applying the lessons learnt us in that time, many of whom have only just on effective remote working to leverage the ## revenue, started to work with colleagues regularly on best of both worlds. aface-to-face basis in the past year. ## surpassing As the Chair of the IG Board, being able Performance to sit down again in an actual room with On a performance front, we have my fellow Directors notably improves delivered good results in a year marked ## £1billion for our effectiveness. Being able to discuss by an extremely uncertain geopolitical matters and offer immediate reaction environment that continues to reverberate or challenge face-to-face across a table ## thefirst time.” across the world. We delivered another is empowering. It encourages lively and year of record total revenue, surpassing healthy debate and the opportunity to share £1 billion for the first time. This was our diverse thoughts and experiences. underpinned by the sustainability and And of course, it provides the chance to loyalty of our OTC client base, who continue connect at a more personal level as well. to find opportunity in volatility. We also benefited from our ability to take advantage Many of these elements were reflected of the higher interest rate environment. in the review on Board effectiveness we conducted this year and remain front Importantly, we have retained a steady of mind as we look at ongoing Board focus on the successful rollout of our composition, which I discuss further in diversification strategy across products the Governance section of the report. and geography. While the Board will periodically stress test our approach, as Mike McTighe Equally, the Directors and I have valued appropriate, the strategy continues to Chair the opportunity to visit offices in various 19 July 2023 deliver, with non-OTC revenue, including the locations around the world over the past associated interest income, now a meaningful year and meet with local teams. This contributor at 21% of total revenue. included a full Board meeting in the US in November, an important part of our growth | strategy, as well as visits to Bangalore and | Capital Allocation Framework | | --- | --- | | Krakow, two of our largest locations and | I am particularly proud that our disciplined | | critical engines of our business. We were | approach to capital allocation and the | | impressed at the energy and enthusiasm | framework we established in FY22 has | | demonstrated by our people in all locations | allowed us to balance a consistent and steady | | and the strong sense of accountability | return to shareholders with support for the | imbued throughout the business. Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 05IG GROUP HOLDINGS PLC Annual Report 2023 Company Information Chair’s Statementcontinued | | communities that we belong to around the | In FY22, we launched our Brighter Future | tomake sure our employees remain | | --- | --- | --- | --- | | We have taken | world. This is in addition to continued organic | Fund – a pledge to put 1% of our annual | supported, not just financially but also in their | | | investment in the business for growth. | profits after tax towards charitable | broader wellbeing through formal and | | | | initiatives. This year we allocated £4 million | informal support networks. As always, they | | steps again this | During FY23, we announced share | | | | | | to support programmes that align with | have also given back, with an incredible one in | buybacks of £200 million and the total our strategic theme of ‘empowerment three of our people engaging in ESG-related capital returned for the period was ## year to make through education’. Whether focusing on activities during the year. £363 million. We have since announced financial literacy, or increasing diversity in a new buyback programme of £250m I would like to take this opportunity to thank the technology sector, our donations will ## sure our alongside a dividend of 45.2p per share. my fellow Board members, the Executive contribute to UN Sustainable Development Committee and all our employees for their Here at IG Group, we are committed to Goal (SDG) 4 – ensuring an inclusive and ongoing dedication and work over the past raising the bar by empowering all our equitable education for all. Please take ## employees year. At the time of writing this report, our stakeholders and communities on their the time to read more about our global CEO June Felix is taking a short period of respective journeys – whether benefiting activities further on in the report. medical leave. We look forward to welcoming ## remain directly as an investor in the company or her back soon and I look forward to an accessing the enormous volume of content Our people exciting and fruitfulFY24. and tools we provide clients daily to hone ## supported.” In all of this we have not lost our focus at their skills and act with confidence. home. We have taken steps again this year ## £4m allocated to charities ## 1 in 3 employees engaged in ESG-related activities Total capital returned of ## £363m IG Group office, Bangalore Shareholder and ### 06 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information ### Chief Executive Officer’s Statement | | At IG, we are driven by one unrelenting | delighted that our employee engagement | | --- | --- | --- | | A passion to | focus: to offer our ambitious clients the | results for the Group were 87%. This is | | | opportunity to create the financial freedom | based on measures such as being proud | | | they strive for now and in the future. | to work for IG, understanding how their | ## create inspiring role contributes to IG’s success, and being This means offering a first-class trading committed to helping IG fulfil its purpose. experience that includes market-leading ## experiences for platforms and tools, access to around 19,000 markets, outstanding trade execution Client focus and unparalleled customer support. To support our self-directed and ambitious ## clients is at clients, we curate experiences that makes us This passion to surpass our clients’ a trusted partner, underpinned by our market- ## theheart of expectations and create inspiring experiences leading technology, wide product offering, is at the heart of our business. It has and differentiated education and content. enabled us to deliver sustainable, resilient ## ourbusiness.” In the US, for example, tastylive’s passion growth over decades by building and retaining a strong and loyal client base. for engaging self-directed traders has transformed the way our clients participate While we continue to demonstrate the in the options and futures markets and market-leading strengths of our OTC how digital financial media is imagined derivatives business, we are also making and produced. It provides original content, significant progress on the strategy we delivered by renowned and respected announced in May 2019 to expand and personalities, seven days a week. Content diversify by product and geography, which is distributed through live programming, gives us the opportunity to grow the client on-demand shows, blogs, podcasts, online base and give existing clients access to educational courses, live in-person events more products and asset classes. Our and webinars. tastylive understands retail success in balancing core growth with traders and their needs because they diversification over the last four years are traders themselves. This is also why positioned us extremely well for the leading financial institutions, such as CBOE market conditions we saw during FY23. and the CME have sought partnerships This year our total revenue exceeded £1 with us. Our engaging and accessible billion for the first time, more than double content, combined with our other content our revenue in FY19, while consistently channels across IG is watched globally achieving margins exceeding 40%. more than 100 million times each year. Our people have been a driving force behind We also continue to lead the way as this success. They have a relentless focus on June Felix champions of client welfare, and fair client delivering an outstanding client experience Chief Executive Officer outcomes remain a foundation of our through superior technology, education 19 July 2023 business. Understanding their needs and and content, and customer service. I want shaping our business model to align with their to extend my enormous thanks to everyone interests has contributed to the long-term for the role they have played in delivering sustainable performance of our business. This another year of strong results, and I am approach is part of our culture and makes us Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 07IG GROUP HOLDINGS PLC Annual Report 2023 Company Information Chief Executive Officer’s Statementcontinued the first choice and natural home for active strengths in trading and trading products, traders. It means we foster their long-term technology, and risk management. loyalty and trust, and brings to life the values Since then, we’ve made great progress we share to champion the client and do the and while total revenue has more than right thing. doubled, the proportion of revenue from non-OTC products increased from 5% | Our community commitments | to 21%, while the proportion of revenue | | --- | --- | | Making a positive impact in our communities | from the UK market reduced from 42% | | is important to everyone at IG. | to 34%, primarily driven by our organic | and inorganic growth in the US market. We have pledged to contribute the equivalent | of 1% of post-tax profits to charitable causes, | Given its position as the world’s largest | | --- | --- | | and we are proud to deliver on this promise | financial market, the growth in total US | | – supporting projects all around the world, | revenues this year, up 47% to £191.3 | | with a particular focus on the theme | million, is a particular highlight. The main | | ‘empowerment through education’. For | driver of this growth is tastytrade, where | | example, we continue to work in partnership | significantly higher levels of interest income | | with Teach For All and their network of | offset some softer net trading revenue. | | partner organisations in most of the countries | In the year we laid stronger foundations | | where we operate, including Teach First in the | for future growth, and some highlights | | UK, Teach For Poland and Teach For India. | of our progress at tastytrade include: | With a shared purpose to make the education  Improving client experience by overhauling system work for every child, these mobile applications, creating an open partnerships continue to make a real Application Programming Interface (API), difference. As part of this ongoing and launching an upgraded web-based commitment, by the end of FY26 we aim to trading platform, which is now the newest have positively impacted the lives of 1 million in the sector. This delivers a scalable, people around the world. powerful trading platform to our clients, I am inspired by the work we are enabling backed by outstanding customer service. through these partnerships and am humbled  Expanding our equity trading capabilities by the engagement of our people who have to capture a greater share of our clients’ passionately supported them through trading portfolios and attract larger client volunteering and charitable activities. We balances. This allowed us to capitalize on have exceeded our goal of a third of our the rising US interest rate cycle. employees engaging in voluntary and charitable activities each year.  Rebranding the brokerage firm from tastyworks to tastytrade earlier this year, | Our strategic progress | setting the stage for it to become | | --- | --- | | In FY19, we launched our strategy to expand | ahousehold name for trading the | | and diversify the Group by both product and | USmarkets. | geography, leveraging our well-established IG, official partner of England Cricket Shareholder and ### 08 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information Chief Executive Officer’s Statementcontinued  Leveraging Group marketing capabilities, Our brand campaign and our differentiated client-centric software development will be a Our success in including search engine optimization (SEO), advertising and product innovation have key driving force as we continue our journey and building a best-in-class marketing resulted in us achieving the status of number of innovation. function. one international broker in Japan. We ## balancing core continue to improve our client experience,  Launching the first-ever national brand A rich talent pool with a new risk analysis tool to support our campaign to raise the profile and We are privileged to have such a rich, diverse ## growth with clients’ trading, and the launch of one of our awareness of the business. talent pool across the Group, and one which content channels, DailyFX, in the region to is growing in capability all the time. The Combining Group resources, platforms and boost our coverage and attract prospects to continued engagement and commitment of ## diversification capability with decades of experience from our trading platform. Through our continued our people is critically important, and we the tasty management team has proved investment in Japan, we remain confident of recognise this year has been challenging for successful. This has been a key driver in our further growth and are excited by the ## over the last many as high inflation rates have persisted marketing efforts and significant delivery of significant opportunity the region offers as and negatively impacted their standard of feature-rich client-facing technology over the part of our strategy. living. To support them through this period, ## fouryears last year. It has been great to see how, In the markets where our core OTC business we have undertaken a remuneration review through a combination of these two initiatives, dominates, we remain in the leadership targeted at our most impacted colleagues. tastytrade has been able to grow its appeal ## positioned us position. FY23 provided some challenging This process has included external pay award from active options and futures traders to conditions, with high-inflation, global benchmarking, one-off cost of living booster include active equity traders. recessionary fears and lower levels of market payments, and pay rises. ## extremely well In Europe, Spectrum – our pan-European volatility than seen in recent years. Despite Finally, I am delighted to report that this year trading venue for securitised derivatives – this, the sophisticated nature of IG’s OTC we have again achieved a number of ## for the market is a standout example of our ability to innovate client base shone through, and our market- impressive accreditations that recognise our at scale. Conceived, incubated and built leading offering has supported their trading fantastic culture and working environment. in-house, Spectrum marked an important during the period. We are committed to These include the Great Place to Work ## conditions in milestone this year by welcoming two top-tier supporting these markets with brand-building certification in our India and Poland offices, banks, Societe Generale and UniCredit, as investment, resulting in localised campaigns and the Top Employer certification in the UK ## FY23.” new product issuers. This shows the strength and sponsorships during the last 12 months, and South Africa. In the UK, we were also of Spectrum’s reputation in the European despite challenging conditions, to ensure we named on The Sunday Times’ Best Places exchange market and means that IG’s maintain our leadership position. toWork list for 2023 and ranked among European retail clients (and other distributors We are well positioned to invest steadily and Newsweek’s 2023 Global Top 100 Most on Spectrum) will have access to many consistently for growth given the strength LovedWorkplaces. These are all brilliant thousands of new products. Spectrum has and stability of our cash flows, our strong achievements and a real testament to the significant potential to continue on this balance sheet and our focus on managing culture and environment we have built – one growth journey as new products and costs and profit margins. where we learn fast together, champion the distributors are onboarded, creating an client and continually raise the bar. I look engine for scalability and sustainable growth. More than a third of our people work in forward to further strengthening that culture technology-related roles or teams and it is a and enjoying continued success over the In Japan, our business has continued to linchpin in the success of our business. This years to come as we drive the business succeed. This has been achieved through year, my executive team and I have welcomed towards our strategic ambitions. sustained investment in our products and Adam Wheelwright as Chief Technology brand to meet the needs of the local market. Officer; his vast experience and passion for Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 09IG GROUP HOLDINGS PLC Annual Report 2023 Company Information ### Our Purpose and Values ## Powering the pursuit of financial ## freedom for the ambitious Purpose Strategic drivers Values Our purpose is simple: to power the pursuit of Our strategic drivers guide the decisions we make and keep us on track to achieve ourpurpose. Our values inform all the decisions that financial freedom for the ambitious. We are wemake, from day-to-day interactions passionate about providing the best withcolleagues or clients through to experience for our clients, putting them at the theboardroom. heart of everything we do to support them on their trading and investing journeys. Every ambitious person Inspiring experiences Champion the client Unrelenting in our drive to reach ambitious Creating personalised experiences that We want our clients to trade profitably, and people across the globe. Wherever they are, engage, educate and empower. We invest in our business model aligns our interests. they all share similar characteristics: they’re our award-winning platforms to provide driven and self-directed. We exist to help faster, clearer and smarter ways to trade. User Learn fast together them in their pursuit of financial freedom, and experience is the top reason clients trade with This is key to our culture of innovation. We we acknowledge that this means something us. We also encourage our colleagues to work know that not everything will work perfectly different for everyone. collaboratively to produce excellent results the first time, but we encourage our and get the most out of their roles. colleagues to be innovative, productive and collaborative to accelerate growth and drive personal development. Products that power Tuned for growth Raise the bar Evolving our product portfolio to provide Developing our capabilities and infrastructure As the market leader in our industry, with a greater choice and flexibility in the pursuit of for growth, balancing the need for agility with strong reputation for doing the right thing for financial freedom. Through innovation, we robust controls and risk management. all of our stakeholders, we encourage our can power every ambitious person with Successfully diversifying our business colleagues to constantly raise the bar. market-leading technology, platforms, geographically and by product has been products and exchanges. Our focus on possible due to our strong scalable education gives our clients the understanding foundations. As we continue to grow, this and confidence to harness that power to remains a key focus in our technology, our achieve their goals. operations and our financial strength. Shareholder and ### 10 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information ### Business Model ## A model for building momentum Our resources Our products Creating value for ourstakeholders Our resources and strengths as a business come together to provide four products Technology Investors for our clients: We continue to invest in product Delivering attractive returns across an development, technology resilience OTC ETD Stock Content increasingly diversified business from and platform quality, and provide our trading and and a strong financial position. clients with cutting-edge resources to investments education support their trading. Clients  Contracts For  On-exchange  Share trading  10hrs daily live Brand and reputation Difference leveraged programming Providing a high-quality global  IG Smart (CFDs) securities (EU) platform, excellent client service | | | | Portfolios |  News and | | | --- | --- | --- | --- | --- | --- | | We are a global leader in online | | | | | and a range of distinctive educational | | |  OTC FX |  Options and | (in association | original content | | | trading, with a strong reputation which | | | | | content to support our ambitious | | | | futures (US) | with BlackRock) | | | | has been built over nearly 50 years. We |  OTC options | | |  Webinars | clients. | | are known for our excellent platforms, | | |  ISA and SIPPs | and tutorials | | | risk management and client service. | | | (via share | | | Communities trading) People and culture Playing our part to support our communities, with a focus on Our values define a culture of support empowerment through education. and innovation. We have some of the best talent in the industry and foster Our market-leading brands Colleagues an environment which allows our people to excel, resulting in the best Exchange traded Stock trading OTC derivatives Content service for our clients. derivatives and investments Recruiting, engaging and inspiring our people through an inclusive environment that enables them to Financial capacity develop as professionals with best-in- class resources, training and support. Our business model is highly cash generative. This gives us the capacity to invest in the business to support future growth, return capital to shareholders and evaluate other uses of capital, including acquisitions. Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 11IG GROUP HOLDINGS PLC Annual Report 2023 Company Information Business Modelcontinued ## A stronger business, with broader options Spotlight on Spotlight on Spotlight on ### Interest income OTC business model Content and education Interest income has become more significant for the Our OTC business model sets us apart within our We know how valuable content and education is to our business over the past 12 months. Although this has industry and is fundamental to our long-term success. ambitious clients, and we continue to invest heavily to always been a revenue stream, it has been immaterial provide best-in-class resources to empower them in IG is the counterparty to every trade executed on our for many years due to persistently low interest rates. their pursuit of financial freedom. platform which creates market risk. Exposure from all Higher interest rates have restored this source of trades placed globally is brought together into a central Our content is available in a range of formats and income across the business. Exposure Monitor where offsetting positions are across different brands. tastylive’s popular daily live Interest income is not dependent on trading activity, netted. Due to our scale and the volume of trading, the show focuses on trading strategies, DailyFX is our and therefore has different drivers to our trading vast majority of trades are naturally offset as clients in-depth market news and analysis portal, and IG revenue, bringing a meaningful stream of take opposing positions. Any residual market exposure Academy hosts comprehensive learning resources diversification. Interest income is also more predictable above pre-agreed risk limits is hedged. across many markets and products. We believe in the in nature on a short-term basis. power of content and are excited to drive expansion This model aligns us with our clients. Our revenue is and innovation in our offering. We benefit from interest income in two areas: the driven by spread, commission and overnight funding balances that clients hold on account, and our own charges, it is not driven by client losses. We want our As well as empowering our clients, the quality of our corporate cash. Uninvested client balances are clients to trade profitably. content differentiates our business and creates typically held to cover margin requirements on open sustainable growth. Clients who interact with our As our revenue is independent of client trading trades, or for on-demand liquidity, so clients can place content tend to make better trading decisions and performance, it is less volatile than competitors with trades quickly as opportunities arise. weare more likely to retain them, and educational higher market risk appetite. resources are key in attracting new clients to ourplatforms. FY23 net interest income 4-year revenue CAGR Content reach in FY23 ## £80.8m 15% 20 million+ (FY22 £0.8m) Shareholder and ### 12 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information ### Key Trends Likely to Affect Our Business ### We continue to evaluate key trends in our industry and in the ## Seeing further, wider world, to understand the impact they may have on our ### business, either to spot opportunities, or to mitigate risk. ### We’ve highlighted below the main trends and what they mean ## thinking smarter ### for our business. Financial markets Structural shift to self-directed trading and investing What’s the trend? provided trading opportunities but may also What’s the trend? What does it mean for us? Changing market conditions generate a impact levels of disposable income and the With the evolution of technology and freely Our target market is ambitious, self-directed variety of opportunities to trade, which may propensity to trade of our clients. accessible educational content, the financial individuals. We serve hundreds of thousands be more or less attractive to existing and new markets have never been as accessible to of clients like this already, and the size of the clients and therefore impact levels of new such a vast potential audience. The online addressable market is growing. We have a What does it mean for us? client onboarding and trading activity. trading industry has seen a shift away from strong reputation as the market leader in OTC In general, our ambitious, active clients find | | | financial advisers and a move towards | derivatives, and are building out offerings in | | --- | --- | --- | --- | | Over the past few years we have seen | opportunities to trade in a wide range of | | | | | | self-directed trading and investing. Individuals | turbos, options and futures, and other areas | | increased market volatility from the Covid-19 | market conditions. However, lower volatility | | | | | | want more control over their finances, and | of the market. | | pandemic, the conflict in Ukraine, and | could have a negative effect on revenue | | | have the knowledge and confidence to be challenges facing several regional banks in growth, through lower active client numbers, We rely on our cutting-edge technology, able to do it. the US. We’ve experienced elevated levels of lower rates of client acquisition and reduced platform reliability, risk management account applications and trading activity activity per client This structural change has been playing out expertise and our strong financial foundations during these events. for some years and was accelerated by the to continue to grow and improve as a Conversely, events which cause higher levels | | | long period of high volatility from the | business, and to attract clients all over | | --- | --- | --- | --- | | More recently, we have experienced rising | of volatility across a range of financial markets | | | | | | Covid-19 pandemic. | theworld. | | interest rates and inflation which have also | are likely to increase our revenue. | | | 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 newcomers to the industry. QR CODE WATCH THE VIDEO MARKET CAMPAIGN IN JAPAN Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 13IG GROUP HOLDINGS PLC Annual Report 2023 Company Information Key Trends Likely to Affect Our Businesscontinued Sector developments Interest rate movements | What’s the trend? | We recognise that leveraged derivative | What’s the trend? | | --- | --- | --- | | We operate in a highly competitive and | products are not suitable for all individuals | During the financial year, we saw elevated | | evolving market environment, with new | and have rigorous onboarding criteria | inflation and significant increases in interest | | market entrants constantly challenging | to ensure that only appropriate clients | rates across the globe. Following 15 years of | | traditional players. | are able to access our products. Our | historically low interest rates, this has had | | | competitors’ actions, including new | significant implications for our revenue and | With heightened demand for investing and entrants to the market, may affect the for our clients. trading in recent years, we have seen elevated reputation of the industry as a whole. marketing spend from competitors, which has reduced our share of voice in certain markets. Our purpose compels us to add new products What does it mean for us? This spend has been primarily focused on the in addition to OTC derivatives for the wider Increasing interest rates have both a direct lower value end of the retail trader market. needs of ambitious, self-directed individuals. and indirect impact on our business. The direct impact is on the cash balances we hold We remain an undisputed market leader in We regularly monitor the financial results and on behalf of our clients and our corporate the breadth and depth of our product actions of our competitors at executive and cash. We have a strong net cash position, so offering, but we know we must continue to Board level. rising interest rates mean that we earn work hard to differentiate as competitors add additional income on these balances. Interest new products. on client balances is recognised within total revenue, driving the top line of the business, What does it mean for us? whereas interest on corporate balances is To date, elevated competitor marketing spend recognised within finance income. has not impacted our ability to attract and The indirect impact is seen in the trading onboard our targeted high-value clients nor opportunities that changing interest rate to retain our loyal and active existing clients. expectations can present, as well as the To respond to the threat of new entrants, change in inflation, which is correlated with we monitor changes in the competitive interest rates. Our clients are active traders landscape through local knowledge and who seek trading opportunities, which can market research. We are continually often be created by macroeconomic events. innovating to keep up with sector However, higher inflation reduces disposable developments and anticipate the needs income and can impair consumer confidence, of our clients. Our sophisticated Search which may lower trading activity and reduce Engine Optimisation techniques ensure new client acquisition. we are the first choice for active traders. We put client needs at the heart of everything we do so that we stay ahead. QR CODE WATCH THE VIDEO TASTYTRADE BRAND CAMPAIGN Shareholder and ### 14 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information ### Key Performance Indicators (KPIs) ### We continually review our KPIs Financial KPIs Non-financial KPIs ### to ensure they best reflect our Our financial metrics cover revenue, profitability, diversification and Our non-financial KPIs have been updated to reflect our strategic progress. This year we have cash flow. Profit before tax margin is presented on an adjusted basis, goals in relation to a wider range of stakeholders. The below KPIs and net own funds generated from operations is a management reflect our targets in relation to our clients, people and communities. ### updated some measures and metric for cash flow. Together with our financial KPIs, we can present a more holistic view ### added new metrics to provide ofour strategic direction. Within our financial metrics, we now present net operating income ### a more holistic representation asa metric for revenue growth, in place of total revenue. ### of the performance of the business. Our new metrics of Net operating income Adjusted profit before tax margin Total number of active clients Gender diversity ### employee engagement and ## 35% | gender diversity reflect our | £1,023.4m | | | 48.0% | | | 358,300 | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | strategy to empower all of | FY23 £1,023.4m | | | FY23 48.0% | | | FY23 358, 300 | | | FY23 35% | | | our stakeholders, and our | FY2 2 | | £979.2m | FY2 2 | 51.1% | | FY2 2 | | 381,500 | FY2 2 | 34% | | | FY21 | £843.7m | | FY21 | | 56.0% | FY21 | 291,200 | | FY21 | 33% | ### commitment to equality within the business. Net operating income is our revenue Our profitability measure indicates the This is a measure of overall client Our gender diversity metric metric and represents revenue from extent to which we’re able to convert activity. As the Group diversifies, total represents the percentage of females BUSINESS PERFORMANCE REVIEW products and services and interest on our revenue into profit, as we active clients is the most relevant employed across the Group. client money, other operating income maximise value for shareholders while metric for reaching our target PG. 39 less cost of hedging, and betting duty. investing in growth and resilience. It is audience of ambitious individuals. Our goal is to increase this number presented on an adjusted basis. Thismetric has been updated from over time, and we have a strategy in READ MORE ABOUT OUR STAKEHOLDERS It has been updated from total place to achieve this goal. OTC clients. | PG. 20 | revenue, to better align with our | Our recent margin reduction reflects | | | --- | --- | --- | --- | | | statutory income statement. The | areversion to a more sustainable | Active clients decreased due to | | | growth reflects the success of | profit margin. | challenging market conditions in | | | ourstrategy. | | theyear. | | | Net trading revenue from | Net own funds generated | Employee engagement score | | | non-OTC products | fromoperations | | | 17% | | | £350.9m | | 87% | | | | --- | --- | --- | --- | --- | --- | --- | --- | | FY23 17% | | | FY23 £350.9m | | FY23 87% | | | | FY2 2 | | 16% | FY2 2 | £437. 3m | FY2 2 | | 86% | | FY21 | 6% | | FY21 | £422.8m | FY21 | 74% | | | Our diversification metric shows the | | | Our balance sheet strength metric | | On an annual basis we run people | | | | changing revenue mix by product. OTC | | | measures the cash we generate. It | | surveys with all of our colleagues | | | | products remains our primary revenue | | | indicates our ability to keep meeting | | around the world. Our engagement | | | | source. As we continue to diversify, we | | | our financial obligations as they fall | | score is the average score of several | | | | expect the proportion of revenue from | | | due, including broker margin | | key questions. | | | | non-OTC products to increase. | | | requirements and dividend payments. | | | | | Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 15IG GROUP HOLDINGS PLC Annual Report 2023 Company Information ## Strategic Update: ## Diversify and grow Our strategy ## Investment case Our strategy is to diversify and grow our business by meeting the needs of more customers, launching new innovative products, and delivering inspiring Growth levers Diversification Market-leading Quality clients Strong balance sheet experiences. The business is perfectly technology and and disciplined capital positioned to deliver on the strategy, with a content management global presence, a culture of innovation, and astrong financial position. Over the next few  Multiple growth  Increasingly  Sophisticated  Significant proportion  Highly cash- pages we will take a look at some of our levers across the diversified business risk-management of revenue generated generative business businesses in more detail; what they have business through organic and technology from long-term model achieved this year, and how they will continue inorganic growth clients to deliver success.  Positioned in some  Engaging live content  Strong regulatory of the world’s largest  Wide geographic and educational  Strict onboarding capital and liquidity Our investment case provides a clear picture markets footprint across five resources criteria ensure we positions of how our strategy has been successful in continents welcome only the past, and why we believe it will continue  Well placed to  Ongoing investment  Clear Capital appropriate clients tobe successful in the future. benefit from the  Continued progress in our platforms Allocation structural shift in product  Our clients typically Framework towards self- diversification have years of trading directed trading and investment and investing experience Shareholder and ### 16 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Financial StatementsGovernance Repot Company Information Strategic Updatecontinued | Sustainability of our over-the-counter (OTC) business | | Spotlight on IG US | | --- | --- | --- | | Our over-the-counter derivatives business is | profitably. Our hedging model means that | IG US has grown 17% over the last 12 | | the flagship business of the Group and has | ourresults do not fluctuate based on client | months. Since launch in 2019, we have | | been operating for nearly 50 years. Over that | outcomes, increasing predictability of | steadily grown to become the third largest | | time it has expanded geographically, and we | ourresults. | Retail Foreign Exchange Dealer in the US, | | now have offices in five continents. | | with over 10% market share. | The reason that the OTC business has | Over the past few years we have seen strong | retained significantly higher levels of revenue | We have achieved this growth by targeting | | --- | --- | --- | | growth, particularly during the pandemic | since the pandemic is the quality of our client | high-value experienced traders and have | | when volatile markets created frequent and | base. Our marketing strategy, onboarding | implemented content initiatives to engage | | more publicised trading opportunities. What | criteria, high level of client servicing and | our clients. We continue to develop our | | really separates our OTC business from the | superior trade execution continue to attract a | strategy to attract high-quality clients and | | rest of the market is the remarkable | high calibre of traders and investors. They are | drive the expansion of the IG US business | | consistency we continue to deliver, which is | wealthy, knowledgeable and ambitious, and | to become one of the top players in | | down to two factors: the OTC business model | recognise trading opportunities across our | themarket. | | and the high quality of our clients. | offering of 19,000 markets. They trade daily, | | in all market conditions, and this creates a Our business model, which hedges market consistent, organic revenue stream. exposure, puts us on the same side as our clients – we want our clients to trade Net trading revenue Spotlight on our OTC clients We often refer to the quality of our clients being a differentiator for our business, butwhat does that mean, and are our clients really of a higher quality than k ourcompetitors? 100k  Our average client balance and revenue k per client are typically higher than 80 ourpeers.  Our top segment of clients are very k active, trading 15+ times per day 60  Our clients are loyal; around 50% of k revenue is generated by clients who 40 have been with us for over three years k  We maintain strict onboarding criteria 20 for access to our platforms Pete Mulmat, IG US CEO 0 FY20 FY22FY19 FY21 FY23 Shareholder and ### IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements 17 Company Information Strategic Updatecontinued Spotlight on SpectrumOur exchange-traded derivatives (ETD) business | Our exchange-traded businesses have | Diversification of regulatory risk is another | Spectrum had a fantastic year, with | | --- | --- | --- | | become a vital part of our Group. The | benefit we see. Although our OTC business is | revenue growth of 67% to £15.7 million. | | exchange-traded market presented an | geographically diverse, this product line has | The vast majority of this was generated | | attractive opportunity where we believed our | accounted for almost 100% of our revenue | through IG as the broker, and Brightpool as | | core competencies – risk management, | for many years, so by adding new product | the market maker. The unique features of | | trading products and technology – would | lines we have a more diverse risk profile and | the exchange being pan-European and | | provide a strategic advantage. We have used | have opened up different markets for growth. | 24/5 have attracted customers quickly. | these key strengths to grow our exchange- Another key benefit of the exchange-traded A significant opportunity for the business traded product range into a meaningful business is the relatively lower regulatory isthe ability to plug in third-party brokers revenue stream. capital requirements in comparison to our and product issuers, which can quickly Cultural preferences have played a core OTC business. This gives the potential multiply the products available, the number significant role in our approach to different fora rapidly scalable business, which can of clients, and therefore the liquidity on the markets. For example, in Europe, Turbos generate significant return on investment. platform. The announcement of UniCredit are more commonly traded than CFDs, and Société Générale as product issuers so building the Spectrum exchange on Spectrum brings additional opportunity gave us access to a larger market ETD total revenue and credibility. than with our traditional products. ## £186.5m European ETD revenue per client (↑ 51%) ## £2,300 (↑ 67%) ## Our SPX exchange provides unparalleled access ## to innovative products and longer trading hours, ## with a sole focus on the retail investor.” Matt Brief Regional CEO, Europe Shareholder and ### 18 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information Strategic Updatecontinued Spotlight on tastytrade Since the acquisition in June 2021, revenue number of potential clients for tastytrade. tastytrade total revenue ### As we reach the two-year has grown rapidly aided by rising interest We are continually analysing the impact of the ### anniversary of our acquisition rates. A common phrase around the campaign, including our conversion funnel, ### of tastytrade, our US tastytrade office in Chicago is that tastytrade and amending client journeys to provide the is ‘the best brokerage platform that no one best possible client experience. This gets ### exchange-traded options and | | has heard of’. Therefore, marketing has been | usthe most value out of the investment in | | --- | --- | --- | | futures business, it is a great | a key focus over the past 12 months. | ourbrand. | | time to reflect on what we | With the re-establishment of a significant | Another major achievement during the year, | Commission interest income revenue stream, tastytrade isthe launch of our open API. This launch ### have achieved since we added Payment for has modified its strategy accordingly to take provides significant opportunity for marketing order flow ### it to the Group. advantage of higher interest rates, by partners to be able to plug into tastytrade, attracting clients with higher cash balances to and quickly increase our reach to a We are happy with the strong performance join the platform. We expect this to be an largeraudience. over this period, and excited about the enduring revenue stream for many years to potential that it still has to deliver. And we are excited by the opportunity to come, as well as being a growth driver in the accelerate growth outside the US. There The tastytrade brokerage and the content short term. issignificant interest in our product arm of the business, now branded tastylive, A significant event this year was the launch of internationally, where tasty already has continue to work together seamlessly. ## the first-ever national brand campaign. Still in a large and growing client base. tastytrade is now tastylive remains a key differentiator for the its early stages, we’re already seeing many ## business, providing engaging content and perfectly positioned to exciting green shoots of progress. In the first actionable trading strategies six days ## few months, we have increased our brand disrupt the US market.” a week to both existing and potential clients, awareness and brand consideration, as well as free of charge. A prime example tastytrade total revenue the volume of Google searches and website JJ Kinahan of our client-focused approach. traffic flow. All of these things increase the Regional CEO, IG North America ## $205m (↑ 26% on a pro forma basis) QR CODE WATCH THE VIDEO TWOYEAR ANNIVERSARY VIDEO 42% tastytrade brand campaign 26% Interest income 32% Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 19IG GROUP HOLDINGS PLC Annual Report 2023 Company Information Strategic Updatecontinued Stock trading and investments Our stock trading and investments business different levels of risk. Clients who use both complements our OTC business and aligns products tend to be more valuable and more well with our diversification strategy. active and tend to stay with us for longer. Through it, we can reach a wider group of The performance of the stock trading and ambitious clients. Our share-dealing clients investments business over the past few years tend to be less active than our OTC clients, has been very strong, gaining a significant but they are self-directed, value our leading number of clients during the pandemic. technology and client service, and have Trading volumes peaked during this period potential to cross over to other products. and have now returned to pre-pandemic levels, though the number of clients on the We have many clients who use our platforms platform has rebased at a higher level. The for both leveraged and non-leveraged business has more than doubled since FY19. trading. This enables us to access a large part of a client’s wallet, by providing products with Stock trading performance Content and education | | Content and education have always been part | Our content offering not only benefits our | | --- | --- | --- | | | of our foundations. We have a client-first | clients, but also our business. It can be a | | 100k | approach to everything we do, so producing | powerful acquisition tool, reaching hundreds | | | content and educational materials as a part of | of millions of people who may go on to use | 90k our offering goes without saying. We want all our platforms. We know that clients who 80k our clients to fully understand our products, consume our content tend to be more active Active clients Total assets to better manage their risk, and to develop and are less likely to stop trading altogether. 70k 5.0 trading strategies so they can harness market They value the total service package we offer 60k opportunities. Across the Group, we have them and have a longer average tenure than 4.5 many content-focused brands: IG Academy, those who don’t engage with content. Whilst 50k 4.0 DailyFX and tastylive, each one distinct and these factors are not the primary reason we 40k | | 3.5 | | with its unique value proposition, but all of | provide content, they do support our | | --- | --- | --- | --- | --- | | | | | which enhance our client’s experience and | performance, and remain an integral part of | | 30k | | 1.5 | | | 3.0 | | | | allow them to trade with more confidence, | our business ethos of putting our clients at | | --- | --- | --- | --- | --- | | 20k | | 1.0 | | | | | 2.5 | | and more understanding. | the centre of everything we do. | 10k 2.0 0k 0.5 0 FY19 FY21FY20 FY22 FY23 Shareholder and ### 20 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information ### Stakeholder Engagement ### We work closely and Our clients Our people Our investors ### proactively with our Why we engage Why we engage Why we engage stakeholders to make sure Our clients want a seamless experience across Our people are at the centre of all we do. Creating value and delivering for our investors our products, service and content, and we put Anengaged, motivated, talented team means is critical. Staying informed of their views gives ### wemeet their needs, today them at the heart of everything we do. We’re we can stand out and deliver excellence for us insight into their priorities and drives our ### and in the long term. We proud of our customer loyalty and want them our clients. business to be successful. to be completely satisfied. ### valuetrust, transparency How we engage How we engage ### andcollaboration, just like How we engage We recognise that our people are all In a post-pandemic world, a hybrid model of theydo. Our customer experts are based all around the individuals, and we engage with them in as both in-person and virtual meetings is the world, so we can speak to customers round the many different ways as possible, from social norm. This offers the best of both worlds Discover our key stakeholders clock, in their language where possible. channels to surveys, townhalls to smaller between relationship-building and flexibility workshops, and everything in between. Our for our investors. ### and how and why we engage We invest in high-quality communication home-grown employee networks promote technology because we know how important it Our open dialogue with investors can range ### with them. inclusion and help us better understand all is for our clients to connect to us. from one-to-one or group meetings, employee experiences. webcasts and roadshows, conferences, and Our platforms offer many tools and features for Our more formal People Forum encourages questions submitted on an ad hoc basis. Our clients to interact with a wide range of content feedback and connects employee voices with Board stays on top of investor feedback, and and education for all experience levels. Board decision making. Chaired by our Chief any investor changes, and incorporates these What’s more, we value client feedback and take People Officer (CPO) and attended by into their decision making. any opportunity to hear it so we can continually Non-Executive Director Sally-Ann Hibberd, improve our service. employee representatives are democratically What matters most elected by our people and participate for Our experienced and well-informed Investor two-year terms. What matters most Relations team are always available, and any Products: We diversify and evolve our award- topic can be on the table: financial winning products in response to clients’ needs. What matters most performance, strategy, capital allocation, A continuous two-way dialogue means we get client characteristics, cost control, regulation, Knowledge: We understand how important the best from our people, which in turn means and competitive position. We know that high-quality, relevant content is, and ours cuts the best for our clients. investor trust is key, and we are always through the noise to guide and support our receptive to both existing and prospective clients. Our demo accounts bring our products We’re also passionate about being recognised shareholders and bondholders. to life in a low-risk environment. as a top workplace and employer. Technology reliability: A stable, secure, reliable platform is non-negotiable. Our teams work ## 87% hard to deliver flawless trade execution everytime. employee engagement score (2022: 86%) Support: Round-the-clock trading coverage ESG REPORT means our clients can rely on us whenever they PG. 23 need assistance. Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 21IG GROUP HOLDINGS PLC Annual Report 2023 Company Information Stakeholder Engagementcontinued Our communities Our regulators Our suppliers Why we engage Why we engage Why we engage Our unwavering commitment to being a Regulations influence how we can operate in We recognise that suppliers are crucial to the responsible member of the communities the marketplace. We work proactively with quality of our service and products, and we in which we operate is a driving force our regulators to help them understand our enjoy mutually beneficial and lasting for our business, purpose and culture. products and our business model, so we can relationships with our vendors. Our supply It informs our approach to issues of continue our existing activity and grow into chain is key in delivering our ESG strategy, sustainability and social responsibility. new markets. We value our relationships andwe expect our suppliers to embody our withthem and the insight they bring into commitments to responsible business, upcoming changes and how we can education and the communities in which How we engage bestrespond. weoperate. Every one of our people is entitled to two days’ paid volunteering leave per | year, and up to £1,000 of matched | How we engage | How we engage | | --- | --- | --- | | funding for any charitable fundraising | We understand the importance of | We prioritise selecting partners that have | | activities they participate in. We also | transparency, and know our regulators value | effective controls and high-quality standards. | | encourage attendance at talks and events | this. Our regular two-way dialogue ensures | Our robust screening process ensures we | | delivered by our charitable partners. | that our actions and business model are | meet the high standards our clients expect. | | | consistent with regulatory expectations. From | Frequent dialogue with our suppliers, whether | We are very proud of our Brighter Future new business proposals to assisting with informal discussions or more official Fund. We continue to pledge 1% of annual regulatory requests and investigations, we exchanges, means both sides get value from post-tax profits to charitable initiatives, and engage proactively and openly every time. the relationship. are building partnerships with regional and global charities focused on the theme of empowerment through education. What matters most What matters most Regulators aim to safeguard individuals’ best Like them, we want long-term partnerships. Our dedicated ESG and Community teams, interests and ensure that all clients are This means providing clarity on our overseen by our ESG Board Committee, drive treated fairly. They also focus on protecting expectations of the relationship and the us forward every step of the way. the integrity of financial markets and capital services they provide, along with timely and and liquidity issues. We work to respect and reliable payment. Our suppliers also What matters most follow both the letter and spirit of the appreciate fair, open and honest two-way We’re in this for the long run. Our aim is to regulations set out by local regulators to communication and value the feedback we have the biggest impact and sustain the demonstrate that we share their vision. can give them. biggest benefits for our communities. ## 95,876 RISK MANAGEMENT PG. 48 people benefited from our charitable initiatives in FY23 ESG REPORT PG. 23 Nick Ryan, Finance Integration Specialist, Trees for Cities, UK Shareholder and ### 22 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information Stakeholder Engagementcontinued ## Section 172(1) Statement We believe that our business will continue Our key stakeholders Long-term decision making ### We are committed to to grow and prosper if we understand We value all of our stakeholders and make Our strategy is to sustainably generate and ### upholding the very highest and respect the views and needs of our continual efforts to consider their needs and preserve value for stakeholders and wider standards of conduct and all stakeholders. Typically for a global company the impact decisions have on them. Below, society over the long term by facilitating a like ours, we have a robust governance we’ve highlighted sections of this report wider range of trading and investment ### decisions we make are for | | framework which includes delegation of day- | which particularly illustrate how our Directors | opportunities for ambitious people around | | --- | --- | --- | --- | | the long-term success of | to-day decision-making to our employees. | drive the long-term success of our business at | the world. This long-term view drives both the | | | | the same time as balancing the best | strategy and the setting of objectives for | | the business. | Under Section 172 of the Companies Act | | | | | | outcomes for all. | employees. Our risk-management procedures | 2006 (CA2006), a Director of a Company identify the potential consequences of short, must act in a way that they consider, in good  Stakeholder Engagement (pages 20–21): medium and long term decisions, identifying faith, would be most likely to promote the we identify our key stakeholders, and why appropriate levels of identification, mitigation, success of the Company for the benefit of its and how we engage with them reduction, management or elimination in the members as a whole. In doing this, the  Our ESG Report (pages 23–36), which best interests of the Group and stakeholders. Directors must have regard (amongst other describes the progress we have made with matters) to: A continued understanding of the key issues our ESG strategy, including diversity and affecting stakeholders is an integral part of  The likely consequences of any decision in inclusion, our community outreach how our Board operates. The insights that our the long term activities and our Task Force on Climate- Board gains through its engagement related Financial Disclosures (TCFD) report  The interests of the Company’s employees mechanisms form an important part of the  Board Activities (pages 67–68), we give context for all its discussions and decision-  The need to foster our business examples of how our Board interacts with, making processes. To find out more about relationships with suppliers, customers and makes decisions based on, our how the Board has considered the interests of and others employees, investors and other various stakeholders, and which matters the  The impact of our operations on the stakeholders Directors considered when trying to align and community and the environment mitigate opposing views, please see our Board  Understanding our Stakeholders (pages Activities on pages 67–68. |  The desirability of the Company | 70–71), we outline how Directors engage | | --- | --- | | maintaining a reputation for high standards | with investors, employees and the | | of business conduct | community and consider their interests |  The need to act fairly between shareholders of the Company Matt Macklin, Regional CEO, UK, APAC+ & EM Shareholder and ### IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements 23 Company Information ### ESG Report ## A responsible and ## sustainable member ## of the community Our goals ## 1 million people we aim to benefit from community outreach byFY26 ## 1% post-tax profits pledged to community outreach initiatives ## 100% Scope 1, 2 and upstream Scope 3 emissions offset Georgina Kerr, Executive Assistant, Big Sleep Out, London Shareholder and ### 24 Annual Report 2023IG GROUP HOLDINGS PLC Introduction Strategic Repot Governance Repot Financial Statements Company Information ESG Report continued ## Our ESG ## framework Powering the pursuit of financial freedom for the ambitious is about making a positive and Reduce emissions Offset emissions inclusive contribution to society. We are purpose-led, meaning that the principles of Diversity & Inclusion Business ethics responsible business and sustainability feed into Talent development Accountable leadership everything that we do. The Brighter Future Wellbeing Open and transparent framework is our ESG strategy. Launched in Data security FY21, it identifies the key risks posed by our P l a n e t business and the key benefits that we offer to B e s t our clients and our communities, and sets out l e P p r a o c our commitment to managing these in a e t P i c e responsible and sustainable manner. Read on for some highlights. Client protections Brighter Future Fund Client empowerment C grant giving o We’ve made a lot of progress over the last 12 Impact of our products s m Volunteerism and t c m months and, as a result, have made the decision u employee paticipation u d n to make some small changes to our Brighter o i r t P y Future framework. We regard these as natural evolution – and they demonstrate how we’re becoming more mature and confident in our ### Empowering our stakeholders to unlock a Brighter Future approach. We now have 14 priority areas and these are spread across five different pillars. Recognition Our ESG KPIs We are proud to have our progress recognised KPI Unit FY22 FY23 Targets with a number of ESG awards and ratings, and to be active members of several important ESG Educational content # views of IG Academy and New for FY24 New for FY24 735,000 by end of FY24 communities. We are particularly pleased to Financial Freedom Hub have maintained our position on the Employee engagement score % employees 86% 87% Maintain or improve score FTSE4Good Index. in FY24 Gender diversity % women in leadership roles New for FY24 New for FY24 35% by end of FY25, 40% by end of FY28 Total emissions tCO 2 e per employee 9.78 9.45 Net zero pathway to be set out by the end of FY24 Community impact # beneficiaries impacted 94,751 95,876 1 million by the end of FY26 Shareholder and ### IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements 25 Company Information ESG Reportcontinued Case study: Brighter Future Fund ## Leading together with Teach First Head of School, Claire Gilbert shared this ### In FY21, we pledged 1% of our withus: ### post-tax profits to charitable “Thank you to everyone at IG Group who ### causes. This was a hugely provided such an amazing opportunity for ### important milestone, and it ourstudents and staff. They were all buzzing about the opportunities they had, many ### ishelping us secure a legacy saying they would never be able to do ### ofpositive impact in our something like that again. They gained so much. One student commented that the trip ### communities – particularly had blown his mind and was better than he ### inthe field of education. could have expected, so thank you all. One big beneficiary of our Brighter Future Participating in the ‘Leading Together’ Fund has been the UK charity Teach First. programme has consistently enhanced our Through a combination of employee daily leadership of Coppice and our vision to skills, time, and cash donations, we’ve be the best for our wonderful children. I can helped Teach First deliver their mission honestly say that the Outstanding judgement to ensure that children with the fewest for our Leadership in Ofsted has a direct opportunities have access to a great impact from the programme. education to fulfil their potential. Please continue to fund Teach First so that We’ve been working with them for nearly five future schools can benefit through Leading years, and the partnership has become truly Together and their other excellent strategic and operates on a number of levels. programmes.” For example, our funding enabled Coppice Coppice Performing Arts is just one of Performing Arts School in Wolverhampton to 30schools which we funded through the enrol on Teach First’s well-regarded Leading Leading Together programme, and the group Together programme. This helps build and of students that we welcomed to our London develop strong leadership teams in schools HQ are just one of many groups that we’ve serving the poorest communities. But we hosted at IG offices around the globe. We are didn’t stop there. Last year, one of our IG so proud of this work and it has given us the leadership teams went to visit Coppice School confidence to aim even higher – we are now to deliver a series of employment insight looking to have a positive impact on 1 million sessions, and we went on to host a group of people globally by the end of FY26. their students at our offices in London. Akinola Akinyemi, Head of Data Science, Run the River, London Shareholder and ### 26 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information ESG Reportcontinued Priority area Comment UN SDGs Priority area Comment UN SDGs Products People Client We take the principles of product governance very seriously and do what Diversity & A full report on diversity is set out on pages 32–34. We have a number of protections we can to ensure that the risks clients take when using our products are Inclusion influential and active employee networks, including our women’s network, at an appropriate level. Not only do all of our systems meet the our LGBT+ network and our black network. In FY23, we were proud to requirements set by the Financial Conduct Authority (FCA) and other launch a new global employee network IGU (‘I get you’). This network is international regulators, but we think beyond these obligations and are looking out for the interests of colleagues who are directly and indirectly proud to do what we believe is best for our clients. We apply a two-part impacted by disabilities, and is also a champion for neurodiversity across appropriateness test for new clients and for those looking to start using the business. more sophisticated products. Most elements of our new predictive Talent We strive to attract people with the right skills, experience and behaviours vulnerable client model have been rolled out globally. Also, a vulnerability development to deliver our strategy, and to retain these people and help them thrive. webpage has been launched in the UK and Australia, hosting useful Highlights this year include the relaunch of our Early Careers programme, information and resources. This will be rolled out to other regions in FY24. the delivery of an exciting Leadership Development Framework to Client Empowering our clients to pursue their financial freedom is the core of develop leadership at all levels of the business, and a campaign to empowerment our business. We recognise the social value that this presents and regard empower ‘squiggly’ career development. We were also really delighted it as a key component of our ESG offering. As part of our ESG strategy, we with the success of our ‘LEAD’ training for new managers – and look step back from our day-to-day business and consider what it means to forward to offering this to a second cohort in FY24. truly exist for ‘every’ ambitious person, and the principles of inclusivity Wellbeing We recognise that a healthy and happy workforce is an essential upon which this is founded. This prompted a number of exciting new foundation for the delivery of our priorities. We are proud to offer all projects and features, such as this year’s launch of our Financial Freedom colleagues access to an employee assistance programme. This is free Hub. Take a look at the case study on page 28 to find out more details. toour people and an entirely confidential service that can provide This year we have also taken significant strides towards better aligning our immediate advice and support on a range of personal topics. This year products with the principles set out in the Web Content Accessibility wekicked off a new Mental Health First Aiders programme, the result Guidelines. Last year we partnered with external experts Nomensa to ofwhich will be a cohort of trained mental-health first aiders across all conduct audits of our key platforms, and this year we’ve been ouroffices. implementing their recommendations and training our design teams. This project will continue in FY24. Planet Impact of our Managing the risks and opportunities that our products offer to clients is products a key feature of our ESG strategy. We also recognise the need to consider the wider social and environmental impact of our products. This year, Reduce A top priority for us is to find ways to reduce our carbon emissions. analysts from our trading team conducted a review of our products, emissions In2022, we made a formal commitment to the Science Based Target applying an ESG lens to assess their social and environmental impacts. initiative and have until 2024 to define and publish a science-based The key recommendation was to discontinue Sprint markets, and we pathway to net zero. See pages 29–31 to learn more about the progress subsequently removed these from our portfolio in November. The same we have made over the last 12 months. exercise will be repeated again during FY24. Offset We have maintained our carbon-neutral status, offsetting all Scope 1, 2 emissions and upstream Scope 3 emissions. More details on our offsetting strategy are set out on pages 29–31. IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and Company Information < > 27 # ESG Report continued | Priority area | Comment | UN 50Gs | Priority area | Comment | UN 50Gs | | --- | --- | --- | --- | --- | --- | | **Best Practice** | | | | | | | **Business ethics** | We conduct our business in an ethical manner, protecting the principles of human rights in all of our operations. As a UK-incorporated company, we abide by the UK Bribery Act 2010 and we have a Dealing Policy, a Disclosure Committee and associated policies to ensure that we meet the requirements of market abuse regulations. We also have global policies to comply with anti-bribery and anti-corruption laws, including those covering employee gifts and 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 do not make contributions to political parties. | | | | | | **Accountable leadership** | In FY23 we focused on three elements of accountable leadership. Firstly, we worked hard to ensure our leadership teams are diverse and inclusive. More details can be found in our Diversity Report on pages 32–34. Secondly, we've ensured that our leadership team have the skills they need to thrive in their role. More information about this can be found under the 'talent development' section on page 23, and in the Nomination Committee Report on pages 74–75. Finally, 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 98. | | | | | | **Open and transparent** | We are committed to being open and transparent – with our clients, with our people, with our regulators, our investors and our communities. One way we achieve this is to publish our ESG Policy and an ESG reporting map on our website. Here you can also find more information about our tax strategy. This year we paid £161.3 million (2022: £131.3 million) to tax authorities globally. We paid £116.6 million in corporate income taxes (2022: £97.4 million). More details on our taxes paid and on our effective tax rate for FY23 can be found in the Financial Statements. | | | | | | **Data security** | Our clients trust us with their data and with their funds. This is a huge responsibility and one we take seriously. It means that we maintain state-of-the-art systems and strategies to keep our client data and funds secure. As we operate within various global geographical jurisdictions, we also seek to maintain the highest levels of information security compliance with applicable regulations. | | | | | ![img-0.jpeg](img-0.jpeg) Shareholder and ### 28 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information ESG Reportcontinued Case study: Every ambitious person ## Providing educational content ## for all stages of the financial ## freedom journey |  In May 2023, we launched our |  This project is an excellent example | | --- | --- | | Financial Freedom Hub – a learning | of our purpose in action, | | environment designed to help every | demonstrating our commitment to | | ambitious person take control of | exist for every ambitious person. It | | their financial future. We believe | forms part of the Group’s wider ESG | | that access to markets is an | strategy, sitting alongside other | | attainable way for ambitious people | projects such as making our | | to accumulate income-generating | platforms more accessible to people | | assets over time, but also recognise | with disabilities and developing | | that people are at very different | best-in-class mechanisms to spot | | stages on their journey towards | and support vulnerable clients. The | | financial freedom. The Financial | Financial Freedom Hub will also play | | Freedom Hub is designed for those | a vital role in helping us achieve our | | in the earlier stages of this journey | strategic goal of delivering financial | content to hundreds of millions of  Phase one saw the hub launch in the people, and we are excited to watch UK with 40 educational articles. it grow Topics covered include: financial planning, principles of investing, and budgeting. Over time, we will add more content, including videos and interactive modules, and we will also roll this out across other regions Spectrum, Sightsaver’s ‘Bright for Sight’, Frankfurt Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 29IG GROUP HOLDINGS PLC Annual Report 2023 Company Information ### Task Force on Climate-related Financial Disclosures ESG Governance Structure ### This section provides our full ### TCFD disclosure consistent ### with all 11 of the TCFD Once a year the Board receive a repot on Board ### recommendations and in climate-related risks and oppotunities ### accordance with Listing Rule ### 9.8.6R. We still do not measure Board Risk ESG Board Committee Committee ### or report downstream Scope 3 ### emissions and note that ExCo Risk ### derivative instruments – our Executive Committee Committee Biannual updates of ### core business – are still not climate-related risks and oppotunities ### covered by the GHG Protocol. register Group Head of ESG & Community Key developments for FY23 and notes on compliance with TCFD recommendations ESG &  Oversight of climate-related risks and Community Officer opportunities was moved from our Social Impact Environmental Impact Risk ESG Committee to our Board Risk working group working group Committee Committee, with this being incorporated into the Board Risk Community Grant Making Panel Champions Committee’s Terms of Reference  We have deepened our understanding of our impact on the environment by incorporating supplier-specific factors into our reporting  We worked with our environmental consultants to refresh our climate- Products People Planet Best Community Climate- related risks and opportunities Practice Related Risks register twice during the year. It remains the case that, for now, we do not consider any of the risks identified to be material in the shortterm Shareholder and ### 30 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information Task Force on Climate-related Financial Disclosurescontinued | Governance | we purchased in our Poland office and | Risk management | OurtCO | 2 e per employee for FY23 was 9.45; a | | --- | --- | --- | --- | --- | | The Board approves environmental strategy | 90% of the electricity that we purchased | We continue to work with Energise, our | 3.37% reduction from FY22. More information | | | and targets and has responsibility for budgets | in our India office are from renewable | environmental consultant, to assess the | about this can be found in our Streamlined | | | and funding. Climate-related risks and | sources. These two offices join our UK | climate-related risks and opportunities | Energy and Carbon Report on page 31. | | | opportunities are integrated into the Group’s | locations which have been operating on | applicable to our business. Energise help us | | | We have been reporting Scope 1 and 2 Risk Management Framework which means renewable-only tariffs for several years, maintain a risk register, which is updated emissions since FY13 and first reported that the Board has overall accountability for and this means that approximately 67% biannually. They also advised on appropriate Scope 3 emissions in FY20. This year we have the management of these climate-related of our total workforce operated using governance of these risks. We group climate- carefully reviewed the Corporate Value Chain risks. For the third year running we delivered electricity from renewable sources. related risks into two categories: physical risks, (Scope 3) Accounting and Reporting Standard | carbon literacy training to our entire Board | | which relate to the physical impacts of climate | | | --- | --- | --- | --- | | | Secondly, in relation to Scope 3 emissions, | | and, in particular, downstream Scope 3 | | and Executive Committee, ensuring that the | | change, and transition risks, which relate to | | | | we began productive dialogue with eight key | | emissions category 15. This sets out reporting | | climate agenda and our approach to | | the transition to a low-carbon economy. They | | | | suppliers. These were selected because they | | obligations in relation to emissions associated | | managing environmental impacts remains | | are analysed in relation to three possible | | | | are amongst our most significant spends, and | | with investment activity and with the provision | | afocus. | | climate-related scenarios: (i) a smooth | | | | also because they represent a good cross | | of financial services. | transition to <2°C, (ii) a disruptive transition to | The Board delegates to the ESG Committee | section of our key services – such as business | | | | --- | --- | --- | --- | | | | <2°C, and (iii) no acceleration of action (>3°C). | We have concluded that for now we do not | | the oversight of our environmental strategy | travel, cloud services and client relationship | | | | | | These scenarios were considered in the short, | have any downstream Scope 3 emissions that | | and elements of the ‘Planet’ pillar. Oversight | management services. We sent these eight | | | | | | term (<5 years), the medium term (5–15 years) | fall into sub-categories that require reporting. | | of climate-related risks and opportunities was | companies a supply chain questionnaire and | | | | | | and the long term (15+ years). | The financial instruments at the core of our | | formally delegated to the Board Risk | assessed them across six different categories: | | | business are derivatives and there is not yet Committee and this responsibility was added management, human rights, safety and The impact of rising energy costs along with any established approach of guidance on how to that Committee’s Terms of Reference in diversity, net zero, natural resources, risks of damage to our servers and IT to attribute Scope 3 emissions to these FY23. To help them fulfil this responsibility, environmental transparency, and product infrastructure from extreme weather events products. We will monitor this situation each year the Board Risk Committee will stewardship. Their responses have helped are currently considered to be the highest closely and include such emissions if and receive a report prepared in collaboration us advance our thinking in relation to our climate risks. Although currently deemed to when they are incorporated into the protocol. between our Risk Committee, the ESG & pathway to net zero. Furthermore, this be immaterial in relation to the wider business As regards other downstream emissions, we Community function and our external exercise has enabled us for the first time to risks in the short term, we are monitoring do have some general corporate debt environmental consultants. apply supplier-specific factors in our Scope 3 these closely to determine the appropriate holdings where the use of proceeds is not emissions reporting. controls with regards to any future impacts on identified – this applies to both our £300 our business strategy in the medium and long Strategy Reduce: Our pathway to net zero will be a million bond and our £350 million revolving term. More information about these risks and In FY22, we committed to the Science Based comprehensive plan to reduce our emissions. credit facility. However, reporting of this opportunities can be found on the Targets initiative, and it remains a strategic In the meantime, year-on-year emissions per sub-category is optional and our credit facility sustainability pages of our Group website. | priority to have a pathway to net zero | employee have reduced for the third year | | | remains undrawn. As regards our share- | | --- | --- | --- | --- | --- | | approved in 2024. As we work towards this | running – with more detail provided on | | | dealing products, this is an execution-only | | milestone, we are focused on three key areas: | page31. | Metrics and targets | | brokerage service, and as regards our Smart | | | | We assess climate-related risks and | | Portfolios, these are managed by a third party. | | Learn: A top priority is to better understand | Offset: We have maintained our carbon | | | | | | | opportunities by looking at absolute and | | We do not, therefore, manage any | | our impact on the environment. In FY23, we | neutral status, off-setting our entire Scope 1, | | | | | | | intensity-based energy and greenhouse gas | | investments on behalf of our clients, provide | | talked to our landlords in key locations to | 2 and upstream Scope 3 emissions in line with | | | | | | | (GHG) emission metrics, using ‘tCO | 2 e per | investment or asset management services, | | learn about the sources of the electricity we | PAS 2060. Alloffsets are verified by either the | | | | | | | employee’ as our intensity metric. This is one | | provide corporate underwriting and issuance | | purchase through our lease agreements, | Gold Standard or UN Clean Development | | | | | | | of our key ESG metrics, and this is how we | | services, nor do we provide any financial | | and about options to move to renewable | Mechanism. | | | | | | | monitor our impact on the environment. | | advisory services. | tariffs. In FY23, 100% of the electricity that Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 31IG GROUP HOLDINGS PLC Annual Report 2023 Company Information ### Streamlined Energy and Carbon Report | Our carbon footprint for FY23 has been | significant suppliers, rather than applying | | 31 May 2023 31 May 2022 | | | | --- | --- | --- | --- | --- | --- | | prepared by an external consultant, Energise, | industry standard factors. This improvement | GHG Protocol scope Sub-category tCO | | 2 e (market based) tCO | 2 e (market based) | | and includes our Scope 1, 2 and upstream | has made our footprint more accurate and | | | | | Scope 1 Operation of facilities 521.90 0.00 Scope 3 emissions across all our businesses also it has reduced our Scope 3 emissions by in all locations. The data was quantified 1,10 6.4 tC O e compared to the total had we Scope 1 Combustion 201.00 287. 8 6 2 in line with the GHG Protocol standard only used industry standard factors. Scope 1 722.90 287. 86 and applying the most relevant emissions It demonstrates to us the value of a robust, factors sourced from the Department for Scope 2 Purchased energy 401.10 832.70 environmentally conscious vendor Environment, Food and Rural Affairs’ 2020 Scope 2 401.10 832.70 management processes and of working with UK Greenhouse Gas Conversion Factors for suppliers that have a progressive approach to Company Reporting, and other equivalent Scope 1 and 2 1,124 .0 0 1,120.56 managing their impact on the environment. data sources for our emissions outside emissions We intend to increase our use of supplier- of the UK. Where data is not available, Employees 2,665 2,424 specific factors in the future and, therefore, standard estimation methods have been to continue improving the accuracy of our Intensity ratio 0.422 0.462 applied to account for these emissions. report. Finally, it is worth noting that there has Relevant change -8.66% | In relation to Scope 1 and 2 emissions, our | | | been a change to the presentation of our | | | --- | --- | --- | --- | --- | | total carbon footprint for the year was | | | data. We have switched to reporting on a | Global energy use 10,206,432 kWh 10, 272,137 kW h | | 1,124 .0 0 tCO | 2 e or 0.422 tCO | 2 e per employee. | market-based methodology rather than | | UK energy use 9,027,165 k Wh 7,888,644 kWh | In relation to all three scopes, our total carbon | | | location-based. The market-based figure is | | | | --- | --- | --- | --- | --- | --- | | footprint for the year was 25,186.20 tCO | | 2 e or | 1,837.3 tCO | 2 e less than the equivalent | Overseas energy use 1,179,267 kWh 2,383,493 kWh | | 9.45tCO | 2 e per employee – a relative | | location-based figure. This is a more accurate | | | Scope 3 Business travel 552.00 83.51 | reduction of 3.37% from last year. This relative | calculation because it accounts for the | | | | --- | --- | --- | --- | | reduction has been achieved because our | renewable energy we source in our UK, | Employee commuting | | | headcount has increased more than our | Poland and India offices. Note that, for the | (including | 547.50 1,229.17 | | emissions. Also, we made improvements to | purposes of comparison, this means that the | homeworking) | | | our Scope 3 data collection process and now | figures in our table for FY22 are market-based | | | Fuel and energy- benefit from adopting supplier-specific figures as opposed to the location-based 779.60 860.33 related activities factors in relation to some of our most figures that we reported last year. Purchased goods and 22,124 .50 20,297.48 services Waste generated in 88.40 116 . 5 0 operations Scope 3 24,062.10 22,586.98 Grand total All three scopes 25,186. 20 23,707.5 4 Employees 2,665 2,424 Performance indicator All three scopes 9.45 9.78 Relevant change -3.37% Shareholder and ### 32 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information ### Diversity Report ## Our approach ## to Diversity | At IG Group, we are committed to creating | Achievements in FY23 | | --- | --- | | a culture where all our people can achieve | Last year we conducted an end-to-end review | | their potential, and where our leadership at | of our D&I agenda, and in October 2022, our | | every level reflects the diversity of our people | Executive Committee approved the refreshed | | as well as the markets in which we operate. | strategy, goals and approach. Our | | Diversity & Inclusion (D&I) is one of our | behavioural-change approach focuses on: | priorities because we’ve promised our people  Equipping our leaders at all levels to lead that they will be given the opportunities to inclusively every day achieve their ambitions. We also recognise that the Investment Association (IA)  Integrating inclusion goals and capability Shareholder Priorities for 2023 , Feb 2023 in everything that we do report ‘set(s) out four Shareholder Priorities,  Holding leadership accountable for D&I which the IA members had identified goals linked to reward as critical drivers of long-term value for | companies’. One of these four priorities is | We’ve gone further and identified ‘stretch’ | | --- | --- | | Diversity. The IG D&I strategy focuses on | targets for our senior leadership population – | | inclusive behaviour and decision-making, | our goal is to have 35% female senior | | more than the development of groups | leadership by the end of FY25, and 40% by | | under-represented in our senior leadership. | the end of FY28. We are now laying the | | This approach represents a significant | foundations to expand beyond gender and | | shift where our leaders are accountable | introduce a comparable target for race | | for D&I goals, which are linked to reward. | andethnicity. | We are driving this approach because it is So we can support leaders at all levels to our leaders who own the power to create understand the impact of their everyday a truly diverse and inclusive company decisions, and what they can do if their good where ambitious people want to work and intent is not reflected in their impact, we have ambitious clients want to do business. designed the bespoke IG Powering Inclusion Programme. To date, IG senior leaders, the majority of line managers and all of the People Supporting Supper Foundation (NGO), Johannesburg function have attended. We plan to continue rolling out this programme in the next financial year, and later, integrate it into mandatory learning for all IG leaders. Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 33IG GROUP HOLDINGS PLC Annual Report 2023 Company Information Diversity Reportcontinued Key deliverables for our refreshed strategy include: Statement on listing rule compliance We plan to achieve the 40% target for  Updating the Non-Financial Metrics to enable us to link inclusion performance to reward The Nomination Committee and the Board female representation on the Board by carefully considered the diversity-related the end of the calendar year 2024.  Designing and delivering the bespoke IG-wide Powering Inclusion Programme to equip reporting requirements set out in the leaders at all levels to lead more inclusively We have met the target that at least Listing Rules and recommended by the one senior position on the Board is  Integrating inclusion goals and capabilities in key business as usual areas: FTSE Women Leaders Review. As at 31 May held by a woman, and that at least one 2023, we have not met the Listing Rules — End-to-end review of Talent Acquisition with clear reporting KPIs: individual on the Board is from a minority target set out under LR 9.8.6R (9) that at ethnic background – in fact we have – Robust, diverse shortlists on a ‘comply or explain’ basis, and structured and diverse least 40% of our Board should be women. three ethnic-minority Directors. interview panels While the Directors are committed to a diverse organisation including the Board, We insist on search firms presenting – Contractual terms for search firms to provide robust diverse candidate pools we will continue to appoint on merit, based a diverse pool of candidates – Open and transparent posting of all roles on the skills and experience required for throughout the search process. membership, while considering all forms – Proactive external pipelining of diversity, as well as independence. – Regular progress report to track how different groups fare through our processes — Embedding inclusion best practice in the Talent Process: – Tracking proportionate outcomes for different groups/regions – Equipping leaders to deliver inclusive processes and outcomes, with detailed planning for the coming year — Integrating inclusion narrative and principles in the refreshed Employee Value Proposition — Resetting the IG Employee Networks, and establishing a new network focused on disability and neurodiversity. We are shifting away from a programmatic approach to one focused on engagement and impact to help us bind all our people to IG — Designing and implementing an approach to make us more inclusive around religion – forexample, helping managers understand what they can do to support our people duringRamadan  Partnering with the 30% Club Moving Ahead programme for mentoring for our mid-level women to improve their visibility and connections with senior leaders, and for our senior leaders to mentor women in other organisations  Delivered, through the Inspire Network, International Women’s Day (IWD) activities, which included hearing from our own global leaders and external speakers, as well as inviting students from local schools as part of our efforts to inspire future talent Shareholder and ### 34 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information Diversity Reportcontinued 3 Diversity data Board and Executive Management gender representation The tables below analyse the gender and ethnic balances of Directors and employees within Number of Number of senior Number in Percentage the IG Group as at 31 May 2023. We continue to aspire to increase diversity across and at every | | | Board | Percentage | positions on | | | Executive | of Executive | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | level of our organisation, and our Diversity Commitment is available on our website. | | | | | 4 | | | | | | members | | of the Board | the Board | | Management | | Management | 31 May 2023 31 May 2022 Men 8 67% 3 8 67% Numbers % Numbers % % change Women 4 33% 1 4 33% 1 Senior leadership Female 20 19% 23 24% (5%) Other categories 0 0% 0 0 0% Male 84 81% 74 76% 5% Not specified/prefer not to say 0 0% 0 0 0% Total 104 2 Senior management Female 16 17% 17 20% (3%) 5 Board and Executive Management ethnic representation Male 76 83% 66 80% 3% Number of Number of senior Number in Percentage Total 92 Board Percentage positions on Executive of Executive Total employees Female 881 35% 811 34% 1% members of the Board the Board Management Management Male 1,654 65% 1,608 66% (1%) White British or Other White Total 2,535 (including minority-White groups) 9 75% 3 11 92% Mixed/multiple ethnic groups 0 0% 0 0 0% Asian/Asian British 3 25% 1 1 8% Black/African/Caribbean/Black British 0 0% 0 0 0% Other Ethnic Groups, including Arab 0 0% 0 0 0% Not specified/prefer not to say 0 0% 0 0 0% 1 Senior leadership relates to the two layers of management below and including the Executive Committee (as per our internal targets) 2 Senior management relates to the two layers of management below the Executive Committee (excluding the Executive Committee) 3 Executive management relates to the Executive Committee, including CEO, CFO and COO 4 Senior Board positions are Chief Executive Officer, Chief Financial Officer, Senior Independent Director and Chair IG People Summit 5 Ethnicity data for Board and the Executive Committee is self-reported (using local census data categories and collected where legallypossible) Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 35IG GROUP HOLDINGS PLC Annual Report 2023 Company Information ### Non-Financial and Sustainability Information Statement Section 414CA of the CA2006 requires the Reporting requirement Policies governing our approach Find out more Company to include within its Strategic Environmental matters ESG Policy ESG Report, page 26 Report a non-financial and sustainability SECR Report page 31 information statement setting out such Climate related matters Climate related risks and opportunities register TCFD Report pages 29 and 30 information as is required by Section 414CB of the CA2006. The table to the right and the Employees Diversity and Inclusion Policy ESG Report, pages 24, 26 and information it refers to are intended to help (includes Anti-Discrimination and Harassment Policy, Recruitment Policy, 32–34 stakeholders understand IG’s position on key Absence Management Policy, Annual Leave Policy, Parental Leave Policy, non-financial and sustainability matters. Group Whistleblowing Policy, Transitioning at Work Policy, IG Health and Safety Policy) | Social, community matters Diversity and Inclusion Policy | | ESG Report, pages 24–28 and | | --- | --- | --- | | | ESG Policy | 32–34 | | Human rights issues Statement on Slavery and Human Trafficking (Modern Slavery) | | ESG Report, pages 26 and 27 | Vendor Management Policy Anti-bribery and corruption IG Group Anti-Bribery Policy ESG Report, page 27 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) Description of principal risks and impact on business activity Key Trends Likely to Affect Our Business, pages 12–13, Risk Management, pages 48–53 Description of business model Business Model, page 10 Non-financial key performance indicators KPIs, page 14 Shareholder and ### 36 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information ### Trophy Cabinet ## Don’t just take it from us UK | 2023 | Top Employer 2023 | Best for Share Traders | Best share dealing platform | | --- | --- | --- | --- | | Best Places to Work | –TopEmployer Institute | –Boring Money Best Buy | –YourMoney.com | | Awards 2023 | | Awards | Investment Awards | Best Prime Broker – Start- ### Last year saw IG Group being –SundayTimes Up & Emerging Managers Best Finance App, Best Best Client Relationship recognised around the world for Best Trading Execution –Hedgeweek European Multi-Platform Provider and Manager Service – –Professional Trader Awards Best Platform for the Active Professional Trader Awards ### its performance – from product | | Awards | | Trader –ADVFN International | | | --- | --- | --- | --- | --- | | | | Best Prime Broker – start up | | UK’s Most Loved | | excellence to a great place to work. | | | Financial Awards | | | | Top100 Global Most Loved | and emerging funds –HFM | | Workplaces 2022 | | It fills us with pride to receive such accolades, but | Workplaces 2023 | European Services Awards | Best spread betting | –Newsweek | | most importantly it makes us feel confident that | –Newsweek | | provider | | | | | 2022 | | Living Wage Employer | | we’re creating experiences for all our stakeholders | | | –Online Money Awards | | | | Great Place to Work | Best for Low-Cost ISA – | | –Living Wage Foundation | that are truly valuable. Some of these awards include: 2023–GreatPlace to More than £50K –Boring Best customer service Work Institute Money Best Buy Awards –Online Money Awards France 2022 | | Winner for Customer | | Australia | | --- | --- | --- | --- | | USA | | Germany | | | | service, Customer | | 2023 | India 2023 2022 Service Awards 5-Star Rated Best Value 2023 Best Options Trading The Fairest –Investment Trend Online Share Trading Great Place to Work Platform Company Award – Platform – Canstar 2023 –GreatPlace to –US News and World Winner for Education Focus Monday Awards Work Institute Report Awards materials/Programmes Best of the Best Awards, Poland –Investment Trend Best Feature Packed Best Broker for Options 2023 Non-Bank Online Broker –Investopedia’s Best Top CSR Initiative –Money Magazine Online Brokers Awards – CEE Business Service Centres Awards 2022 2022 Outstanding Value – Best options trading Great Place to Work International Share platform 2023 – GreatPlace to Trading Award – Canstar –BrokerChooser Awards Work Institute Italy 2022 Best online broker –Italian Certificate Awards Best Innovative Certificate of the Year –IT Forum Awards Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 37IG GROUP HOLDINGS PLC Annual Report 2023 Company Information ### Chief Financial Officer’s Statement Performance for the year developing new ideas. We have an effective ## A fourth consecutive year I am delighted to report another successful incubator process which helps develop some year for the Group. We have recorded of these projects and has produced a fourth consecutive year of record businesses such as our OTC business in the ## of record total revenue.” total revenue, and good cost control US and our EU ETD business in recent years. has ensured that we continue to deliver Itis important that we continue to allocate a high profit margin. A key strength of sufficient capital to foster innovation and our business is that the amount of cash organic growth. that we generate allows us to both invest This year, we have had the challenge of high for growth and deliver attractive and levels of inflation across many of our regions. sustainable distributions for shareholders. This impacts some of our supplier costs, but | Total revenue of £1,022.6 million is 6% | also impacts our people, and we have taken | | --- | --- | | up on prior year and represents the first | steps to ensure that we are financially | | time that the Group has reported a total | supporting our people globally. | revenue of over £1 billion, which is a Looking at the bigger picture, we always aim significant milestone for the business and to balance the correct level of investment for our strategy. Our performance this year the future with our profit margin. Our reflects two important factors. First, we have adjusted profit margin for the year was 48%, broadly maintained our trading revenue down slightly on our prior year margin of 51% and avoided a significant decline following but well within our guided range. We have the pandemic, something that has been managed to grow the business at an seen by many others in the industry, and impressive rate over the past 20 years, at second, we are well positioned to generate consistently high margins, something that significant growth in interest income. wewill continue to do in the future. Charles A. Rozes As we projected last year, interest income was Our effective tax rate was higher than prior Chief Financial Officer the principal revenue growth driver in FY23 year at 19% versus 17% in FY22. This is due 19 July 2023 due to the significant client balances we hold. tosome one-off adjustments in the prior This generated £80.8 million in FY23, in year,and the impact of the increased UK comparison to just £0.8 million in FY22. The corporation tax rate which moved from increase in interest rates has also meant that 19%to 25% in April 2023. our net finance income line is now a positive, | as the return from our corporate cash | Earnings per share were down slightly year on | | --- | --- | | outweighed the cost of the small level of | year, which includes a few moving parts. Profit | | issued debt and our revolving credit facility, | before tax was down marginally, and the | | which remained undrawn as at 31 May 2023. | Group effective tax rate was higher. This was | partially offset by a reduction in the number Cost management remains of high of shares in issue, which is a result of the importance on my agenda. We are an ongoing share buyback programme. We innovative business, and one of the key would expect the share count to continue decisions we make during the year is deciding tofall, as we continue to execute the how much capital we should allocate to buybackprogramme. Shareholder and ### 38 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information Chief Financial Officer’s Statementcontinued Capital and liquidity our shareholders, in the form of a share We anticipate that interest income will ## What I find the most | | Our FY23 results announcement marks the | buyback for an amount of £250 million. | continue to be a material stream of revenue | | --- | --- | --- | --- | | remarkable thing about | one-year anniversary of the publication of our | We would expect this to be substantially | within our total revenue line. In the US, we | | | Capital Allocation Framework. The framework | completed within FY24. The Board has | reiterate our guidance that for every 25 | ## our business is that the has been well received by all our stakeholders, concluded that a share buyback is the basis points rise in the Fed funds rate, we and our Board has been embedding it most value-accretive form of additional would expect an additional $4 million of ## amount of cash that we internally as we continue to evaluate the most distribution at this point in time. revenue on an annual basis. For interest ## generate allows us to both effective uses of capital. income outside of the US, and net finance The announcement of our new share buyback income, we expect higher income in FY24 ## invest for growth and Our first priority of course is ensuring that we programme is further evidence that the than in FY23, reflecting the annualisation | | meet our regulatory capital requirements. In | Group is able to invest in the continued | | | --- | --- | --- | --- | | create attractive returns | | | effect of rate increases last year and | | | January 2022, the Group transitioned to the | growth of the business and provide attractive | | projected interest rate increases in FY24. ## for shareholders.” Investment Firms Prudential Regime (IFPR), returns to shareholders. and has since been on a static, transitory On profit before tax margin, we are reiterating Liquidity management has also been a strong capital requirement. our guidance that we would expect to achieve point during the period. The peak broker a margin of mid-40s over the medium term. | Our commitment to supporting charitable | margin requirement during the year was | | | --- | --- | --- | | causes, with a focus on empowerment | £757.5 million (FY22 peak margin: £774.7 | On effective tax rate, as the majority of the | | through education, remains unwavering. In | million). With such a robust organic liquidity | Group profits are taxed in the UK, the UK | | FY22, we pledged to allocate 1% of post-tax | position, we have significant capacity for | corporate tax rate change will cause further | | profits to these causes, and we intend to fulfil | further business growth, supporting client | upwards pressure going forward, though we | | this commitment again this year with an | trading across a variety of market conditions. | anticipate the Group effective tax rate to run | | additional pledge of £4 million. | The broker margin requirement at the period | at around 24%, due to tax incentives we | | | end was £678.2 million, leaving an available | receive for technology development spend. | Our proposed final dividend of 31.94 pence liquidity balance of £792.9 million. Adjusting represents a total dividend for the year of In summary, another consecutive record year for the working capital set aside for the 45.2 pence, an increase of 1 pence on the of total revenue, good cost management and broker margin movements, our liquidity prior year, reflecting a progressive, a strong balance sheet puts us in an excellent surplus at the period end was £792.9 million. | | sustainable dividend. During the year, we | | position to be able to invest in the business, | | --- | --- | --- | --- | | | considered inorganic growth opportunities to | | execute on our strategy, and provide | | | accelerate progress on our strategy but did | Guidance | attractive returns to our shareholders. | | | not identify anything which met our range of | The medium-term guidance that we set out in | | | | criteria. We will continue a disciplined | July 2021 was that we would anticipate total | | | | approach towards all of our capital allocation. | revenue growth of 25–30% in our High | | | Total revenue | | Potential Markets from FY21, and total | | Due to the amount of profit accrued in the revenue growth of 5–7% in our Core Markets+ year, and having considered all other uses portfolio from FY22. We are reiterating this ## £1,023m of capital, we are in the position to be able guidance, and we are confident that we will to announce an additional distribution for be able to deliver against this guidance. (FY22: £967m) Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 39IG GROUP HOLDINGS PLC Annual Report 2023 Company Information ### Business Performance Review Summary Group Income Statement FY23 FY22 Change Adjusted change £ million (continuing operations) FY23 Adjusted FY22 Adjusted % % 1 Net trading revenue 941.8 941.8 972.3 966.5 (3%) (3%) Net interest income 80.8 80.8 0.8 0.8 Nm Nm Total revenue 1,022.6 1,022.6 973.1 967.3 5% 6% 2 Betting duty and other operating income 0.8 (2.5) 6.1 4.6 Net operating income 1,023.4 1,020.1 979.2 971.9 5% 5% 3, 4 Total operating costs (584.9) (541.0) (501.9) (464.9) 17% 16% Operating profit 438.5 479.1 477.3 507.0 (8%) (5%) 5 Other net gains/(losses) (2.6) (2.6) 11.1 (2.3) 6 Net finance income/(cost) 14.0 14.0 (11.4) (10.4) Profit before tax from continuing operations 449.9 490.5 477.0 494.3 (6%) (1%) 1 FY22 adjusted excludes £5.8 million foreign exchange hedging gain associated with the financing of the tastytrade acquisition 2 FY23 adjusted betting duty and other operating income excludes £3.3 million income for the reimbursement of costs relating to the sale of Nadex (FY22: £1.5 million) 3 Operating costs include net credit losses on financial assets 4 FY23 adjusted operating costs excludes £39.7 million of costs and recurring non-cash costs associated with the tastytrade acquisition and integration (FY22: £33.7 million) and £4.2 million relating to the sale of Nadex (FY22: £3.3 million) 5 FY22 excludes £9.3 million fair value (FV) gain on revaluation of Zero Hash, £4.1 million of gains on sale of Small Exchange and disposal of Zero Hash, and £2.3 million loss from associate 6 FY22 adjusted net finance cost excludes £1.0 million of one-time financing expense associated with the debt issuance | Statutory results | Statutory operating costs, including net | Adjusted results | | --- | --- | --- | | On a statutory basis, net trading revenue from | credit loss on financial assets, were £584.9 | The following analysis reflects a continuing | | continuing operations was £941.8 million, | million, 17% higher than FY22. The Group’s | operations and adjusted basis, which excludes | | down 3% on FY22, reflecting a reduction in | statutory profit before tax for FY23 was | certain one-off items and recurring non-cash | | client activity. The Group’s total revenue of | £449.9 million, down 6% on FY22. | items in order to present a more accurate | | £1,022.6 million, increased by 5%, driven by | | view of underlying performance. A | The results are presented on a continuing significantly higher levels of interest income. reconciliation of non-GAAP (Generally operations basis which excludes items Net operating income increased by 5% to Accepted Accounting Principles) measures related to the sale of Nadex operations £1,023.4 million (FY22: £979.2 million). used in this report is contained in appendix 1. which completed in FY22 and classified as a discontinued operation. In FY23, the Group subsequently disposed of assets related to Nadex. 40 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and Company Information # Business Performance Review continued # Adjusted total revenue by product | | Adjusted total revenue (£m) | | | | --- | --- | --- | --- | | | FY23 | FY22 | Change % | | OTC derivatives | 806.3 | 810.2 | – | | ETD | 186.5 | 123.1 | 51% | | Stock trading and investments | 29.8 | 34.0 | (12%) | | **Group** | **1,022.6** | **967.3** | **6%** | Adjusted total revenue consists of adjusted net trading revenue and net interest income. Adjusted total revenue was £1,022.6 million in FY23, up 6% on FY22. OTC derivatives total revenue was £806.3 million, slightly below that of the FY22 record year for OTC. ETD total revenue was £186.5 million, up 51% on the prior period. Within ETD, tastytrade total revenue was £170.3 million (£120.9 million trading revenue and £49.4 million interest income), up 52% on FY22 and 41% on a pro forma basis which includes a full 12 months of tastytrade revenue in the comparative period, benefitting from both increasing Fed Funds rates and favourable transitional foreign exchange, offset by a reduction in net trading revenues. Stock trading and investments total revenue was £29.8 million, down 12% due to a reduction in client trading activity. Non-OTC revenue made up 21% of total revenue in FY23, considerably up from 16% in FY22 reflecting the continued diversification of our revenue. # Adjusted net trading revenue Adjusted net trading revenue was £941.8 million, 3% lower than FY22 as the challenging macroeconomic environment impacted trading activity. # Net trading revenue performance by product | | Adjusted net trading revenue (£m) | | | | --- | --- | --- | --- | | | FY23 | FY22 | Change % | | OTC derivatives | 782.0 | 811.5 | (4%) | | ETD | 137.1 | 121.2 | 13% | | Stock trading and investments | 22.7 | 33.8 | (33%) | | **Total net trading revenue** | **941.8** | **966.5** | **(3%)** | | **Interest income** | **80.8** | **0.8** | **nm** | | **Group total revenue** | **1,022.6** | **967.3** | **6%** | | | Active clients (000) | | | Net trading revenue per client (£) | | | | --- | --- | --- | --- | --- | --- | --- | | | FY23 | FY22 | Change % | FY23 | FY22 | Change % | | OTC derivatives | 189.5 | 199.8 | (5%) | 4,126 | 4,063 | 2% | | ETD^{1} | 91.6 | 104.5 | (12%) | 1,490 | 1,142 | 31% | | Stock trading and investments | 90.8 | 93.2 | (3%) | 250 | 363 | (31%) | | **Group^{2}** | **358.3** | **381.5** | **(6%)** | | | | 1 ETD revenue per client calculation excludes revenue generated from the Group's market maker on trades 2 Total Group active client is 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 FY23, there were 13,700 multi-product clients, compared with 16,000 in FY22 Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 41IG GROUP HOLDINGS PLC Annual Report 2023 Company Information Business Performance Reviewcontinued | OTC derivatives | Exchange Traded Derivatives | Net interest income | | --- | --- | --- | | OTC derivatives net trading revenue of £782.0 | Net trading revenue from ETD was £137.1 | Net interest income on client balances was | | million, was down 4%, reflecting a 5% | million, up 13%, and 6% higher than FY22 | £80.8 million increasing significantly from | | reduction in active clients (FY23: 189,500) as | on a pro forma basis, which includes a full | £0.8 million reported in FY22. Interest on | | client activity moderated against a more | 12 months of tastytrade revenue in the | client balances made up 8% of total revenue | | difficult macroeconomic backdrop year over | comparative period. | in FY23, increasing from 5% in H1 to 11% in | | year, particularly in Q3. Net trading revenue | | H2. This increase reflected the rising interest | tastytrade’s net trading revenue in the period per client increased 2% on the FY22 average, rate cycle and the significant client money increased 10% to £120.9 million, and 2% reflecting the high quality of our client base. balances held throughout the year. on a pro forma basis. Active clients reduced | UK and EU OTC derivatives revenue was | by 16% on a pro forma basis, reflecting | In our US businesses, client balances at the | | --- | --- | --- | | £397.9 million, down 8%, with almost all of the | normalisation against the higher levels of | end of the year were $1.9 billion (31 May | | year-on-year difference driven by a difficult | activity in FY22 and lower levels of new client | 2022: $2.0 billion). This contributed £50.4 | | comparison to an exceptionally strong Q3 in | acquisition in the period. The decline in active | million of interest (FY22 £1.9 million). | | FY22. Q4 revenue however increased 16% on | clients was more than offset by increased | | Outside of the US, client balances of £2.7 Q3, as client trading activity increased. Active revenue per client, up 22%, due to billion were down 12% (31 May 2022: £3.1 clients in the year declined 6%, with a 2% improvements in the client mix and favourable billion). This included £420.4 million of client lower average net trading revenue per client. translational foreign exchange rates. funds on the balance sheet (31 May 2022: | Japan OTC derivatives revenue was £99.3 | Spectrum’s revenue was £15.7 million, | £519.4 million) for which the interest is | | --- | --- | --- | | million, up 1% on the record FY22 | up 68%, as revenue per client increased | recognised within the net finance line. Interest | | performance, with active clients increasing | significantly to £2,286, up 67%, as the | income recognised on the remaining | | 10%, and average net trading revenue per | exchange onboarded Societe Generale | segregated client money balance was £30.4 | | client decreasing by 8%. We continue to see | and UniCredit as new issuers. | million compared with a net interest cost of | | exciting opportunities to grow this business | | £1.1 million in FY22. | further through the launch of new products Stock trading and investments and effective marketing programs. | | Net trading revenue from stock trading and | Operating costs | | --- | --- | --- | | Australia OTC derivatives revenue of £95.2 | investments was £22.7 million, down 33%, | Total adjusted operating costs for FY23 were | | million increased 8%, with average revenue | reflecting a 31% reduction in average net | £541.0 million, 16% higher than FY22. The | | per client up 29%, more than offsetting a 16% | trading revenue per client as trade frequency | increase reflected approximately £16.2 million | | decline in the active client base. | per client reduced. The number of active | of translational foreign exchange headwinds, | | | clients reduced slightly and assets under | inflationary increases, the £4.0 million pledge | Institutional OTC derivatives revenue was up management at the end of the period to charitable causes, and higher technology- 35% at £13.3 million with a significantly higher remained in line with FY22 at £3.3 billion. related costs as we continue to invest in net trading revenue per client and active innovation and resiliency. client numbers remaining level. US OTC derivatives revenue increased 17% as net trading revenue per client increased 31% year on year benefitting from the increasing quality of the client base and some translational foreign exchange benefit. Shareholder and ### 42 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information Business Performance Reviewcontinued Adjusted operating costs from continuing operations £ million FY23 FY22 Change % Fixed remuneration 188.5 150.1 26% Advertising and marketing 93.5 87.1 7% Revenue-related costs 47.9 45.3 6% IT, structural market data and communications 42.5 35.0 21% Depreciation and amortisation 29.6 28.5 4% Legal and professional 25.9 16.8 54% Other costs 63.1 44.2 42% Variable remuneration 50.0 57.9 (14%) Total operating costs 541.0 464.9 16% Average headcount 2,616 2,408 9% | FY23 fixed remuneration was £188.5 million, | IT maintenance, structural market data | pool was £27.6 million, down 15%, reflecting | | --- | --- | --- | | up 26%, reflecting increased headcount, | charges, and communications costs were | alower level of outperformance to internal | | translational foreign exchange on non-GBP | £42.5 million, an increase of 21% reflecting | targets relative to the comparative period, | | salaries, salary increases driven partly by | increased investments in technology to | offset by increases due to headcount growth | | inflation, and a one-off cost of living payment | expand infrastructure capacity to support | and salary inflation. Share schemes costs | | to around 70% of our people. Headcount | future growth and periodic spikes in | relating to the long-term incentive plans for | | growth was primarily in technology areas and | clienttrading. | senior management reduced by 6% to £16.8 | | reflected continued investments in new | | million (FY22: £17.8 million) reflecting the | Depreciation and amortisation costs development projects and the running of our lower share price, and lower levels of increased 4% to £29.6 million. Legal and global trading platforms and infrastructure. performance against internal targets in professional fees were £25.9 million, an comparison to prior year. Sales bonuses Advertising and marketing spend increased increase of 54%, reflecting higher costs in decreased by 25% to £5.6 million reflecting by 7% to £93.5 million. This reflected relation to strategic and operational projects. lower commission payments to sales staff. marketing investments in Germany and Other costs, which include staff-related costs tastytrade to support our strategic goal of (such as travel and entertainment), regulatory growing our ETD business and diversifying the Net finance income fees and irrecoverable VAT, increased by 42%. Group’s revenue base. Net finance income in the period was £14.0 Also included was the £4.0 million pledge to million, up from a £10.4 million adjusted cost Revenue-related costs include market data charitable causes, representing 1% of FY22 in FY22. Within this, finance income was charges, client payment charges, provisions adjusted profit after tax, which was approved £30.2 million (FY22: £3.4 million), offset by for client and counterparty credit losses and by the Board in September 2022. Additionally, finance costs of £16.2 million (FY22: £13.8 brokerage trading fees. Although net trading other costs increased due to higher travel and million). Group finance costs are fixed, revenue was lower in FY23, revenue-related entertainment as staff returned to the office however, the finance income, which reflected costs increased by 6% to £47.9 million and travel frequency increased. the interest earned on corporate balances reflecting a change in revenue mix, in including client funds on balance sheet, Within variable remuneration was the general particular higher brokerage trading fees due benefitted from the rising interest rate cycle. bonus accrual, share schemes and sales to a larger volume of US index options traded bonuses. The charge for the general bonus by clients. Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 43IG GROUP HOLDINGS PLC Annual Report 2023 Company Information Business Performance Reviewcontinued Earnings per share (EPS) FY23 FY22 Change Adjusted change £ million (unless stated) FY23 Adjusted FY22 Adjusted % % Profit before tax from continuing operations 449.9 490.5 477.0 494.3 (6%) (1%) Taxation (86.2) (94.0) (80.9) (83.8) Profit after tax from continuing operations 363.7 396.5 396.1 410.5 (8%) (3%) Weighted average number of shares for the calculation of EPS (millions) 418.7 418.7 426.3 426.3 (2%) (2%) Basic EPS (pence per share) 86.9 94.7 92.9 96.3 (6%) (2%) | Profit before tax was £449.9 million in FY23, | Profit after tax was £363.7 million, down | | --- | --- | | and £490.5 million on an adjusted basis, 1% | 8% on FY22, and 3% lower on an adjusted | | lower than FY22. | basis. Basic EPS was 86.9 pence, down | 6% on FY22 and 2% lower on an adjusted The effective tax rate (ETR) was 19.2% basis due to the reduction in profits, partly based on profit before tax from continuing offset by a lower share count reflecting operations (FY22: 17.0%). The ETR was lower our share buyback programme. than the average main rate of UK corporate tax in the period of 20%, where the majority | of the Group’s profits were taxed, primarily | Dividend | | --- | --- | | as a result of standard UK tax incentives and | The final dividend for FY23 of 31.94 pence per | | adjustments to prior year estimates. The ETR | share was proposed by the Board. This will be | | for FY24 is anticipated to be around 24% on | paid on 19 October 2023, following approval | | an adjusted basis, due to the sharp increase | at the Company’s Annual General Meeting, | | in UK corporate tax rate from 19% to 25% | to those shareholders on the register at the | | from 1 April 2023. The ETR is dependent | close of business on 22 September 2023. This | | on several factors including taxable profit | represents a total FY23 dividend paid of 45.2 | | by geography, tax rates levied in those | pence per share (FY22: 44.2 pence per share). | 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 44 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and^{}[] Company Information # Business Performance Review continued # **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 International Financial Reporting Standards (IFRS) balances in the Appendix. | £ million (unless stated) | 31 May 2023 | 31 May 2022 | Change % | | --- | --- | --- | --- | | Goodwill | 611.0 | 604.7 | 1% | | Intangible assets | 276.5 | 292.1 | (5%) | | Property, plant and equipment^{1} | 17.6 | 16.7 | 5% | | Operating lease net liabilities | (2.2) | (2.0) | 10% | | Other investments | 1.2 | – | nm | | Investments in associates | 12.5 | 14.8 | (16%) | | **Fixed assets** | **916.6** | **926.3** | **(1%)** | | Own cash | 730.2 | 1,245.9 | (41%) | | Issued debt and notional pooling | (299.3) | (299.2) | – | | Client funds held on balance sheet | (420.4) | (519.4) | (19%) | | Turbo Warrants^{2} | (2.7) | (1.5) | 80% | | Net amounts due from brokers | 825.3 | 657.1 | 26% | | Own funds in client money | 75.1 | 64.2 | 17% | | Financial investments | 234.1 | – | nm | | Liquid assets threshold requirement | 65.0 | 106.7 | (39%) | | **Own funds** | **1,207.3** | **1,253.8** | **(4%)** | | Working capital | (74.4) | (82.5) | (10%) | | Net current assets held for sale | – | 0.4 | (100%) | | Tax payable | 2.7 | (20.5) | (113%) | | Net deferred tax net liability | (37.6) | (49.7) | (24%) | | **Net assets** | **2,014.6** | **2,027.8** | **(1%)** | 1 Excludes right-of-use assets 2 Recognised in client funds held on balance sheet in the prior year During FY23, Group's fixed assets decreased by £9.7 million. The decrease in fixed assets was driven by annual depreciation and amortisation of £61.8 million offset by additions of £26.2 million in intangibles and property, plant and equipment, £8.7 million on the Small Exchange acquisition, £7.6 million lease payment and a £10.8 million increase from foreign exchange. The Group's working capital increased by £8.1 million, which was primarily driven by a lower general bonus accrual compared to prior year. The Group recognised a £13.2 million decrease in net assets during the period driven by a £46.5 million decrease in own funds offset by a reduction of £35.3 million in tax and deferred tax liabilities. Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 45IG GROUP HOLDINGS PLC Annual Report 2023 Company Information Business Performance Reviewcontinued Liquidity in broker margin requirements and the Group The Group maintained a strong liquidity position, ensuring that it had sufficient resources under both normal circumstances and stressed holding higher cash balances in non-UK conditions to meet its working capital and other liquidity requirements, which included broker margin requirements, regulatory and working subsidiaries to meet local cash requirements capital needs of its subsidiaries, and funding of adequate buffers in client money accounts. at the end of the year. The Group regularly repatriates cash from its overseas The Group’s available liquidity comprised assets available at short notice to meet additional liquidity requirements, which were typically subsidiaries, and for liquidity management increases in broker margin. and planning purposes the Group excludes £ million (unless stated) 31 May 2023 31 May 2022 Change % cash held by non-UK subsidiaries from available liquidity. The amount of cash held in Own cash 730.2 1,245.9 (41%) entities outside the UK was £383.5 million as Net amounts due from brokers 825.3 657.1 26% at 31 May 2023 (31 May 2022: £342.9 million). Own funds in client money 75.1 64.2 17% The Group’s available liquidity is subject to meeting other requirements including Financial investments 234.1 – – regulatory liquidity requirement within the Liquid assets threshold requirement 65.0 106.7 (39%) IFPR. IFPR has a basic liquid assets requirement and a liquid assets threshold Liquid assets 1,929.7 2,073.9 (7%) requirement, which can be met with both Broker margin requirement (678.2) (629.5) 8% cash and certain financial investments. As at 31 May 2023, £65.0 million was held as liquid Cash balances in non-UK subsidiaries (383.5) (342.9) 12% asset threshold requirement, 39% lower than Own funds in client money (75.1) (64.2) 17% 31 May 2022 due to removal of the transitional IFPR arrangement. Available liquidity 792.9 1,037.3 (24%) Of which: In addition to cash recognised on the balance sheet, as at 31 May 2023, the Group held Held to meet regulatory liquidity requirements 65.0 106.7 (39%) £2,303.9 million (31 May 2022: £2,577.9 Dividend due 130.6 134.8 (5%) million) of client money in segregated bank accounts, which is not recognised on the The composition of the Group’s liquid assets million of UK Government securities to satisfy execution counterparties. The broker margin Group’s balance sheet. These client funds are changed during the period, with more liquid margin requirements. The Group’s cash requirement at 31 May 2023 was £48.7 million held separately from the Group’s own cash assets held as financial investments (UK balance also reduced as a result of dividends higher than the requirement at 31 May 2022. balances and are excluded from the Group’s Government securities) rather than cash. This paid during FY23 of £188.1 million, share The maximum margin requirement during the liquid assets. | was a result of changes in regulations that | buyback of £175.2 million and tax paid of | period was £757.5 million in August 2022, | | --- | --- | --- | | require the Group to post securities into | £116.6 million, offset by cash generated by | lower than the Group’s highest broker margin | | segregated accounts instead of cash to meet | operations of £296.2 million. | requirement of £774.7 million which occurred | | initial margin requirements at certain brokers. | | in H1 FY22. | Net amounts due from brokers increased by The impact on the Group’s liquid assets was £168.2 million. The balance comprised open The Group’s available liquidity reduced by that the UK Government securities held by the derivative positions, cryptocurrency assets, £244.4 million during the period, which was Group increased by £210.3 million, with a cash and UK Government securities held on more than the overall fall in liquid assets of corresponding reduction in the cash balance account by the Group’s hedging and £144.2 million. This was driven by an increase at 31 May 2023. The Group held £372.3 46 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and^{}[] Company Information # Business Performance Review continued # Own funds The Group measures the strength of its liquidity position using an "own funds" measure, instead of just cash, as it is a broader and more stable measure than cash. Own funds include liquid assets, less issued debt, turbo warrants and client funds on the balance sheet. As at 31 May 2023, the Group had a cash balance of £730.2 million (31 May 2022: £1,245.9 million) compared with an own funds balance of £1,207.3 million (31 May 2022: £1,253.8 million). | £ million (unless stated) | 31 May 2023 | 31 May 2022 | Change % | | --- | --- | --- | --- | | Liquid assets | 1,929.7 | 2,073.9 | (7%) | | Client funds on balance sheet | (420.4) | (520.9) | (19%) | | Turbo warrants | (2.7) | (1.5) | 80% | | Issued debt/long-term borrowings | (299.3) | (299.2) | – | | **Own funds** | **1,207.3** | **1,253.8** | **(4%)** | Client funds on balance sheet are funds on deposit 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 arrangements. The Group has £300 million, 3.125% senior unsecured bonds due in 2028. The Group also has access to a £350 million revolving credit facility which was undrawn at 31 May 2023 (31 May 2022: undrawn). The Group has the option to request an increase in the revolving credit facility size to £400.0 million. The total available credit facilities have risen from £600 million as at 31 May 2022, to £650 million as at 31 May 2023, with the potential to rise to £700 million if the new revolving credit facility is increased in size. # Own funds flow | £ million | FY22 | FY22 | | --- | --- | --- | | **Own funds generated from operations** | **467.5** | **536.5** | | As a percentage of operating profit | 107% | 112% | | Taxes paid | (116.6) | (99.2) | | **Net own funds generated from operations** | **350.9** | **437.3** | | Net interest and fees received | 10.2 | (13.2) | | Capital expenditure and capitalised development costs | (26.2) | (17.5) | | Net own funds movement from acquisitions and disposals of subsidiaries and investments in associates | (2.8) | (14.7) | | Purchase of own shares held in employee benefit trusts | (14.6) | (6.7) | | **Pre-dividend increase in own funds** | **317.5** | **385.2** | | Cash paid for share buyback | (175.2) | – | | Dividends paid | (188.1) | (186.2) | | **Increase/(decrease) in own funds** | **(45.8)** | **199.0** | | **Own funds at start of the period** | **1,253.8** | **1,058.5** | | Increase/(decrease) in own funds | (45.8) | 199.0 | | Impact of movement in exchange rates | (0.7) | (3.7) | | **Own funds at end of the period** | **1,207.3** | **1,253.8** | IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and^{}[] Company Information 47 # Business Performance Review continued Own funds decreased by £45.8 million, excluding the impact of foreign exchange rates. This was driven by share buybacks completed in FY23 of £175.2 million, dividends paid of £188.1 million, purchase of own shares held in the Employee Benefit Trust of £14.6 million and capital expenditure of £26.2 million, offset by net own funds generated from operations of £350.9 million. # Regulatory capital The Group is supervised on a consolidated basis by the Financial Conduct Authority in the UK, which requires 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. The Group's regulatory capital resources, which totalled £996.3 million as at 31 May 2023 (31 May 2022: £1,025.6 million), are an adjusted measure of shareholders' funds taking into account FY23 profits which are included in the regulatory capital calculation once signed off by the auditors. Shareholders' funds comprise share capital, share premium, retained earnings and other reserves, and as at 31 May 2023 totalled £2,014.6 million (31 May 2022: £2,027.8 million). The Group's regulatory capital requirement as at 31 May 2023 was £497.4 million (31 May 2022: £497.4 million). The Group's capital headroom was £498.9 million (31 May 2022: £528.2 million), demonstrating the solid capital base. | £ million | 31 May 2023 | 31 May 2022 | | --- | --- | --- | | **Shareholders' funds** | **2,014.6** | **2,027.8** | | Less foreseeable/declared dividends | (127.6) | (134.8) | | Less remaining share buyback not recognised | (22.5) | - | | Less goodwill and intangible assets | (829.9) | (833.7) | | Less deferred tax assets and significant investments in financial sector entities | (23.2) | (17.5) | | Less significant investment in financial sector entities | (13.7) | (14.8) | | Less value adjustment for prudent valuation | (1.4) | (1.4) | | **Regulatory capital resources** | **996.3** | **1,025.6** | | **Total requirement** | **497.4** | **497.4** | | **Capital headroom** | **498.9** | **528.2** | Shareholder and ### 48 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information ### Risk Management ### Our approach to risk Risk culture Risk governance ### management, centred around Embedding a sound risk culture is fundamental to the effective Non-Executive oversight of the RMF has been delegated by the Board our Risk Management operation of our RMF and sets the tone, alongside our core value of to the Board Risk Committee, with executive and operational oversight ‘Champion the Client’, for conduct in all business activities and provided through the Executive Risk Committee (ERC). ### Framework, is key to achieving expected behaviours. Central to our risk culture is a commitment to The ERC meets weekly to discuss risks requiring executive-level ### our business objectives whilst integrity and to principles of responsible business. This is driven by oversight and management, with the frequency reflecting the individual accountability, with defined roles and responsibilities ### we preserve our strong commitment of senior management to play an active role in day-to- prescribed across the Group as detailed under the Senior Managers ### financial position, regulatory day risk management. Specific sub-committees are delegated Certification Regime in the UK. We operate a Three Lines of Defence additional oversight with membership comprised of management ### reputation and ensure good Model, with segregation of responsibilities as detailed below: withsubject matter expertise. ### outcomes for both clients and ### markets. The Board is ### ultimately responsible for Board and designated sub-Committees IG Group Holdings (IGGH) ### ensuring that we maintain ### astrong risk management ### culture, supported by our Board Risk Committee Audit Committee Audit Board Risk Remuneration ### robust Risk Management Committee Committee Committee ### Framework. Management Client Money and Remuneration Assets Committee Risk Committee Risk Management Framework (RMF) We have an established framework to identify, First Line Second Line Third Line Executive Risk Committee measure, manage, monitor, and report the of Defence of Defence of Defence risks faced by our business. This includes the Business Risk and Control Internal Technology Risk Conduct and Op Risk risk that our conduct may pose to the Risk Committee Committee Committee functions functions Audit achievement of good outcomes for clients, or to the sound, stable, resilient, and transparent Capital and Best Execution Information Security Risk management Advisory and Assurance Liquidity Committee Committee Committee operation of financial markets. Responsible for oversight services Provide Vendor Risk Management Transaction Repoting The RMF provides the Board with assurance identification, Maintain risk independent, Committee Committee that our risks, including the risks relating to assessment and management and objective assurance the achievement of our strategic objectives, management of risks control policies, reviews of faced in line with analyse and monitor appropriateness are understood, and managed in accordance approved policies risks against risk and effectiveness of with our appetite and tolerance levels. and procedures. appetite. controls, governance The RMF is supported by numerous policies structures and covering all areas of our business, from our processes. management of market, credit, and liquidity risk, to the systems and controls we put in place to manage and oversee our technology, operational and conduct risks. Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 49IG GROUP HOLDINGS PLC Annual Report 2023 Company Information ### Principal Risks and Risk Appetite Risk category Principal risks Mitigation and controls Market risk – trading book and  The inherent conflict in OTC trading, is mitigated at IG through the design of our business model, ### Business Model Risk being based around the internalisation of client trading and hedging of residual exposures more non-trading book (inclusive of The risk we face arising from the than the predefined Board approved limits. In short, our long-term interests align with those of interest rate risk) nature of our business and business our clients model, including market, credit and The risk of loss due to movements in market  Additionally, our order execution system price improves client orders where the underlying liquidity risks, and capital adequacy prices arising from our net position in market has moved against them while the order is being processed. We operate a real-time adherence. financial instruments. market position monitoring system  Our scenario-based stress tests are performed on an hourly basis Risk appetite In pursuit of our business goals, we have an  We have predetermined, Board-approved, market risk limits appetite for running modest levels of market risk to facilitate the high-quality instant  Our dynamic approach to limit management makes full use of highly liquid markets in core hours, execution of client orders while accepting reducing in less liquid periods that periodic credit risk losses will occur in normal business activity. We have very little Credit risk – client  Our approach to setting client margin requirements is centred on protecting our clients from appetite for liquidity or regulatory capital risk poor outcomes, taking into consideration underlying market volatility and liquidity, while The risk that a client fails to meet their and ensure complete compliance with simultaneously protecting IG from exposure to debt obligations to us, resulting in a financial loss. regulatory requirements.  Client positions are automatically liquidated once they have insufficient margin on their account Emerging and evolving risks – this not only protects IG against debt, but importantly protects our clients We monitor the emergence of significant events  Our client education offering provides information about robust risk management practices or topics which could, if unmanaged, have a material impact on the Group. Such matters Credit risk – financial institution  We undertake credit reviews of financial institutional counterparties upon account opening, include the war in Ukraine, trade wars, political which is updated periodically (or ad hoc upon an event) and legislative changes and any other matters The risk of loss due to the failure of a which may lead to macro market movements. financial institution counterparty.  Our credit exposures to each of our broking counterparties are actively managed in line with Where such events or topics emerge, as a limits matter of course we consider client margin requirements, market risk limits, broker  We perform daily monitoring of counterparties’ creditworthiness positions, and cash and capital held at each individual entity to ensure we remain within our  Active liquidity management within the Group is central to our approach, ensuring sufficient Liquidity risk appetite as the external environment and liquidity is in the right places at the right times risks we face change. The risk that we are unable to meet our financial obligations.  We conduct monthly liquidity stress tests  We have access to committed unsecured bank facilities and debt Capital adequacy  We conduct daily monitoring of compliance with all regulatory capital requirements. With our ICARA (Internal Capital Adequacy and Risk Assessment), we conduct an annual capital and The risk that we hold insufficient capital to liquidity assessment including the application of a series of stress-testing scenarios, based cover our risk exposures. against our financial projections, all of which is approved by the Board Shareholder and ### 50 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information Principal Risks and Risk Appetitecontinued Risk category Principal risks Mitigation and controls Strategic delivery  Regular strategy updates to the Board from the Executive Directors throughout the year ### Commercial Risk detailing the strategic progress of the business The risk that our performance is The risk that our competitive position affected by adverse market weakens or that our profits are impacted  External consultation and extensive market research undertaken in advance of committing to due to the failure to adopt or implement any strategy to test and validate a concept conditions, failure to adopt an an effective business strategy, including effective business strategy, or  Projects managed via a phased investment process, with regular review periods, to assess the risk of failing to appropriately integrate competitors offering more attractive performance and determine if further investment is justified an acquisition. products or services. Financial market conditions  Review of daily revenue, monthly financial information, KPIs and regular reforecasts of expected Risk appetite financial performance There is little appetite for activities that threaten The risk that our performance is affected by efficient delivery of any core initiatives or that client sensitivity to adverse market  Forecasts used to determine actions necessary to manage performance and products in can diminish our reputation, although conditions, making it harder to recruit new different geographical locations, with consideration given to changes in market conditions acceptance of some strategic risk is necessary clients and reducing the willingness of  Regular updates to investors and market analysts to manage the impact of market conditions on to foster innovation. existing clients to trade. performance expectations Emerging and evolving risks We closely monitor the high-inflationary Competitor  Our approach to conduct demands we put the client at the heart of our decision making. We do environment and the UK’s cost of living crisis, not engage in questionable practices, regardless of whether they would prove to be We operate in a highly competitive and their effects on client’s ability to trade, commercially attractive to clients environment and seek to mitigate competitor supplier costs, wages, and income from interest. risk by maintaining a clear distinction in the  Ensuring that our product offering remains attractive, considering the other benefits that we As a UK-headquartered firm we are exposed to market. This is achieved through compelling offer our clients, including brand, strength of technology and service quality FX rate fluctuations when transferring funds and innovative product development between non-UK entities. and quality of service, all while closely monitoring the activity and performance of our competitors. Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 51IG GROUP HOLDINGS PLC Annual Report 2023 Company Information Principal Risks and Risk Appetitecontinued Risk category Principal risks Mitigation and controls Technology and information  Maintenance of a 24/7 Incident Management function ### Conduct and Operational security  Security operations function with 24/7 strength-in-depth capabilities to monitor, prevent and ### Risk triage cyber threats The risks that our conduct poses to The risk of data loss or that our operations are affected, or clients receive a degraded the achievement of fair outcomes for  DOS mitigation services and 24/7 incident management capabilities service or are unable to trade due to an consumers or the financial markets, operational outage or system limitations.  Regular disaster-recovery capability testing and the risk of loss resulting from Technology threats can evolve from poor  Capacity stress testing inadequate or failed internal internal practices and systems or from the processes, people, systems, or continuously evolving cyber landscape.  Our Change Management and Quality Assurance functions undertake risk assessments, utilise external events. defined maintenance windows and help deploy new products and services  We invest in strength-in-depth capabilities to mitigate the ever-present and changing Risk appetite cyberthreats Operational risk is present in the normal course of business, and it is not possible, or even Financial crime  A mature control framework for identifying and reporting on suspicious transactions, which is desirable, to eliminate all risks inherent in our designed to protect the integrity of the financial markets and provide a stable and fair-trading activities. We have no appetite for poor The risk of failing to identify and report environment for our clients conduct-related events. financial crime. Inadequate oversight and client due diligence can result in clients  Appropriate onboarding processes for different client types and vendors with enhanced due Emerging and evolving risks attempting to use us to commit fraud or diligence and monitoring processes where appropriate The cyber threat landscape continues to launder money, third parties trying to evolve, with cyber criminals and ransomware  Segregated duties within processes to ensure adequate oversight and control over internal fraud access client or corporate funds, or groups constantly changing and maturing employees misappropriating funds if an their attack methods and targets. The impact opportunity arose. of climate change poses risks to business continuity and, therefore, potential harm to Trading issues  A 24/7 approach with trading desks located in London and Australia providing 24-hour coverage. our clients and people. Failure to responsibly We apply Board-approved Market Risk Limits and operate under a robust control framework to manage our Group emissions or to mitigate The risk related to any issues around our mitigate our exposure to loss through operational risk events which may impact trading. Our the risks associated with climate change poses internal hedging, client trading, and process order execution processes not only comply with all regulatory requirements, but go over and reputational and regulatory risks. The ongoing for corporate actions, dividends, and above in filling client orders, on an asymmetrical basis, providing better than best execution energy crisis in South Africa, which results in stocktransfers. load-shedding, is a concern, with proactive steps taken by the Group to mitigate any potential impact on our clients and employees. Shareholder and ### 52 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information Principal Risks and Risk Appetitecontinued Risk category Principal risks Mitigation and controls Client life cycle management  Bespoke onboarding processes ensure we only offer products and services to clients with ### Conduct and Operational sufficient means and a clear understanding of the risks involved. Regular assessments of services ### Riskcontinued This is the risk related to issues in the client identified as being critical to clients to ensure their operational resiliency. Single points of failure life cycle spanning the customer agreement, identified, and contingency plans set in place account set-up, interactions, and appropriateness of account types and  Complete adherence to client money and asset regulations, taking the highest standard set by product offerings. the FCA in the UK and applying them worldwide where possible  The use of KPIs to monitor levels of service provided and act where needed  We offer a plethora of high-quality, easily accessible educational material to ensure clients can improve their understanding of our products and the financial markets – supporting their pursuit of financial freedom  We monitor for client behaviours which may indicate levels of vulnerability and proactively engage with them to minimise poor outcomes Financial integrity and statutory  Our operational risk framework provides the base from which our robust control environment reduces operational risk events from manifesting reporting issues  Our automated systems enable us to flex with client trading volumes The risk of production issues which could lead to untimely, incomplete, or inaccurate  Dedicated specialist steering committees manage and oversee niche areas, such as transaction Financial Statements, transaction reporting, reporting, financial crime, financial reporting and forecasting, climate responsibilities, our tax filing, regulatory capital, and forecasting. Internal ICARA and Annual Report production Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 53IG GROUP HOLDINGS PLC Annual Report 2023 Company Information Principal Risks and Risk Appetitecontinued Risk category Principal risks Mitigation and controls Regulatory risk  Continuous monitoring of operations to ensure they adhere to regulatory requirements and ### Regulatory Environment expected standards ### Risk The risk of investigation, enforcement, or sanction by financial services regulators. This  Continuous review of all regulatory incidents and breaches with deep dives performed on The risk that we face enhanced may be driven by internal factors, such as the common themes regulatory scrutiny with a higher strength of our control framework or our  Policies and procedures are embedded across the Group with a regulatory compliant mindset chance of regulatory action, or the interpretation, understanding, or risk that the regulatory environment implementation of relevant regulatory  We operate values to always Champion the Client, whilst Raising the Bar in any of the jurisdictions in which we requirements. This risk can also arise from currently operate, or may wish to external factors, such as the current and changing priorities of our regulators’ policy operate, changes in a way that has and supervision departments. an adverse effect on our business or operations, through reduction in revenue, increases in costs, or Regulatory change  We foster strong relationships with key regulators, with whom we actively seek to converse to increases in capital and liquidity keep abreast of, contribute, to and correctly implement regulatory changes The risk of governments or regulators requirements.  We pay close regard to relevant public statements issued by regulators that may affect our introducing legislation or new regulations and requirements in any of the jurisdictions industry Risk appetite in which we operate which could result in an  The Board Risk Committee receives regular reports of current and emerging risks which timeline We have no appetite to breach financial services adverse effect on our business or operations, incoming, and potential incoming, changes regulatory requirements and we strive to always through reduction in revenue, increases in comply with applicable laws and regulations. costs or increases in capital and liquidity  The Board Risk Committee has received regular updates on UK Consumer Duty regulation, from requirements. the early consultation stage through to approval of the final implementation plan Emerging and evolving risks The regulatory landscape continues to evolve, Tax change  We monitor developments in international tax laws to ensure continued compliance and ensure and we need to react and ensure adherence to stakeholders are aware of any significant adverse changes that might impact us incoming regulations in a timely manner. Less The risk of significant adverse changes in the well-developed regulatory frameworks, such as  Where appropriate and possible, we collaborate with tax and regulatory authorities to provide way we are taxed. digital assets, are actively monitored for any input on tax policy, or changes in law changes where we may need to adapt strategic A prime example is the imposition of a rollouts. The introduction of the FCA’s financial transactions tax, which could Consumer Duty principle is an example of how severely impact the economics of trading we plan for change by identifying workstreams and developments in international tax law. with owners who are responsible for updating steering committees on progress. The same 1 | approach will be taken with incoming DORA | | | , | | --- | --- | --- | --- | | | 2 | 3 | | | MiFID/MiFIR | Review, EMIR | , and any other | | regulatory changes. Many of the concepts in the FCA’s Consumer Duty, and other incoming regulations, are already practiced and well- embedded; and are in line with our purpose, strategic drivers, and values such as being 1 DORA – Digital Operational Resilience Act7 ‘Tuned for Growth’ and ‘Champion the Client. 2 MiFID – Markets in Financial Instruments Directive We welcome their introduction and the impact MiFIR – Markets in Financial instruments Regulation that they will have on our industry. 3 EMIR – European Market Infrastructure Regulation Shareholder and ### 54 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information ### Going Concern and Viability Statement | Going concern | Viability statement | The further three-year period provides | | --- | --- | --- | | The Directors have prepared the Group | The UK Corporate Governance Code requires | less certainty of outcome, but provides | | Financial Statements on a going concern | the Directors to make a statement regarding | a robust planning tool against which | | basis which requires the Directors to have a | the viability of the Group, including explaining | strategic decisions can be made. These | | reasonable expectation that the Group has | how they have assessed the prospects of the | forecasts are also considered when | | adequate resources to continue in operational | Group, the period of time over which they | setting targets for the executive and | | existence for a period of at least 12 months | have made the assessment and why they | senior management share plans. | | from the date of approval of the Group | consider that period to be appropriate. | | The Group’s revenue, which is driven by Financial Statements. | | The Group has a forecasting and planning | client transaction fees, has remained resilient | | --- | --- | --- | | The Directors’ assessment has considered | cycle consisting of a strategic plan, an annual | despite the quieter market conditions | | future performance, solvency and liquidity | budget for the current year and financial | in FY23. The current year revenue has | | over a period of at least 12 months from the | projections for a further three years. The | further been supported by the higher | | date of approval of the Financial Statements. | output from this business planning process is | levels of interest earned on client money | | The Board, following the review by the Audit | used in the Group’s capital and liquidity | balances, reflecting the rising interest rate | | Committee, has a reasonable expectation | planning, and the most recent forecasts are | environment. Projections of the Group’s | | that the Group has adequate resources for | for the four-year period ending May 2027. The | revenue have conservatively considered | | that period, and confirm that they consider it | four-year forecasting period is the length of | financial market volatility for the four-year | | appropriate to adopt the going concern basis | time over which the Board strategically | period based on historical levels which | | in preparing the Financial Statements. | assesses the business and the period of time | exclude exceptional events. Projections | | | over which the Board would typically look for | also include assumptions on interest rates | The Group meets its day-to-day working investments to pay back. which are expected to remain flat before capital requirements through its available decreasing, based on market expectation liquid assets and committed banking facilities. The first year of the planning period has a of future interest rate projections. | The Group’s liquid assets exclude all monies | greater degree of certainty. It is therefore | | | --- | --- | --- | | held in segregated client money accounts. In | used to set detailed financial targets across | No significant changes to regulatory capital | | assessing whether it is appropriate to adopt | the Group. It is also used by the Remuneration | and liquidity requirements have been | | the going concern basis in preparing the | Committee to set targets for the annual | assumed over the forecasting period and the | | Financial Statements, the Directors have | incentive scheme. Caution about the degree | Group continues to be subject to IFPR. Aside | | considered the resilience of the Group, taking | of certainty needs to be exercised – in the | from the introduction of Uncleared Margin | | account of its liquidity position and cash | short term, the performance of the Group’s | Rules which came into effect on 1 September | | generation, the adequacy of capital | business is impacted by influences such as | 2022, which requires the Group to pledge | | resources, the availability of external credit | market conditions and regulatory changes | non-cash collateral to meet initial margin | | facilities and the associated financial | that it cannot control. | requirements resulting in a higher holding of | | covenants, stress-testing of liquidity and | | portfolio gilts, there have been no changes in | | capital adequacy that takes into account the | | the Group’s capital and liquidity requirements | | principal risks faced by the business. Further | | and resources since 31 May 2022. | details of these principal risks and how they are mitigated and managed is documented inthe Risk Management section on pages 48–53. Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 55IG GROUP HOLDINGS PLC Annual Report 2023 Company Information Going Concern and Viability Statementcontinued The Group undertakes stress testing on these than assumed by the financial forecasts and jurisdictions in which we operate or seek to forecasts through the ICARA and Recovery that are dependent on regulatory applications operate. In particular, a change that impacts Plan, providing the Board with a robust being successful. on the Group’s ability to sell or trade OTC assessment of the possible consequences of derivative products may have a fundamental The Directors are satisfied that these and principal risks facing the Group, including effect on the viability of the Group and its other uncertainties have been assessed, those that would threaten its business model, businesses, although this risk is lower than in andthat the financial forecasts reflect an future performance, solvency and liquidity. previous years due to the continued appropriate balance of the potential diversification of the Group’s product The types of scenarios used include the outcomes. offering. Further details of these principal collapse of a major financial services firm, The Group continues to actively monitor and risks and how they are mitigated and an unexpected global economic event refine its comprehensive business continuity managed is documented in the Risk followed by a market dislocation and plan. The Group’s significant long-term Management section on pages 48–53. The operational IT failures. The stress tests investment in communications and Board receives reports on these and new evaluate the impact of the scenarios on technology infrastructure enables the Group emerging risks through the Risk Management the relevant principal risks captured by the to operate in a hybrid working environment, Framework. On the basis of these and other Group’s Risk Management Framework. with all colleagues given the opportunity to matters considered and reviewed by the Additionally, the Group has undertaken work from home, and IG continues to provide Board during the year, the Directors have reverse stress-testing to understand the the best possible service for its clients when reasonable expectations that the Group will circumstances under which the Group’s they choose to trade the financial markets. be able to continue in operation and meet its business model is no longer viable. With liabilities as they fall due over the four-year Overall the Directors consider the Group appropriate management actions, the results period ending 31 May 2027. well-placed to manage its business risks of these stresses showed that the Group was successfully, having taken into account the The Strategic Report up to and including page resilient to all severe, but plausible, scenarios current economic outlook, the possible 55 was approved for issue by the Board on considered and would be able to withstand consequences of principal risks facing the 19 July 2023 and signed on its behalf by: the impact of these. Scenarios are reviewed business in severe but plausible scenarios, at least annually to ensure they remain and the effectiveness of any mitigating relevant, with any updates being incorporated actions on the Group’s profitability, into the ICARA accordingly. The ICARA also liquidity and capital adequacy. The Group’s includes a contingency funding plan, outlining business model provides the Directors with management actions to improve the Group’s comfort that the business is being run in a capital and liquidity position. sustainable way, acting in the interest of its The Group has undertaken extensive clients and acting responsibly in managing Charles A. Rozes modelling and analysis for potential changes relationships with other stakeholders. Chief Financial Officer in the regulatory landscape, in order to The Board regularly assesses the principal prepare the financial forecasts, and there is a risks facing the Group. These risks include range of potential outcomes. The Group is regulatory, legislative, or tax changes which planning investments in new countries and in may detrimentally impact our business in the new products, that may be less successful Shareholder and ### 56 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information We recognise how important Diversity and ### I am delighted to report that Inclusion (D&I) are to our business, culture and ## Chair’s Introduction we have continued to make people, and have decided that the whole Board should be involved in overseeing its ### good progress on embedding progress, rather than delegating this to the ### governance best practice at Nomination Committee. Our collective ## to Corporate ### IGGroup in support of our oversight will allow us to benefit from the diverse perspectives and experiences around ### Company strategy, our our boardroom table to further strengthen ## Governance purpose to empower every our competencies in this key area. You can find more details in our Diversity Report on ### ambitious person to pursue pages 32–34 and will note that although ### their financial freedom and wehave not met the new Listing Rules requirement that at least 40% of the ### our focus on our clients. individuals on our Board are women we are | Following our review of the governance | very conscious of, and agree with, the drivers | | --- | --- | | arrangements in the US to optimise oversight | behind it, whilst also seeing it as critical for | | and support last year, the Board held our | usto have the right people in role. We plan | | offsite and strategy session in our Chicago | toachieve the 40% target for female | | tastytrade offices in November 2022. We met | representation on the Board by the end | | with the Regional CEO, his leadership team | ofcalendar year 2024. | and as many of our people there as possible During the year, we approved the Capital – we know how impactful it is to be immersed Allocation Framework, which has been well Mike McTighe in the business to gain a deeper received by our shareholders. We talk about Chair understanding of the opportunities and this more in our Board activities during the 19 July 2023 challenges and learn about key strategic year section on pages 67 and 68. initiatives both for the US and the Group as a whole. As Board Chair, I also took part in an The external Board Evaluation was a key engaging ‘Ask Me Anything’ session. highlight for me this year and was an excellent opportunity for us, as a Board, to reflect on After the success of the Chicago offsite, we Board composition, our strengths and areas are firm in our intention to visit and for development, and agree on how we will understand our offices around the world, continue to evolve together. You can find a full together as a Board on an annual basis. Our report on the process and outcome on pages Non-Executive Directors are encouraged to 72 and 73. visit all of our locations and have indeed made a number of trips during FY23, including to Germany and Poland. Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 57IG GROUP HOLDINGS PLC Annual Report 2023 Company Information Chair’s Introduction to Corporate Governancecontinued | Governance structure | Board and Committee changes and focus | finance space. Outside of Board meetings, | | | --- | --- | --- | --- | | To ensure we spend the Board’s time as | During the year, there were no changes to the | Directors also began to meet with potential | Statement of compliance with the UK | | effectively as possible, we have continued to | Board, and I am delighted to say that Susan | successors to Executive Committee members | Corporate Governance Code | | evolve the Terms of Reference for each | Skerritt was appointed as a member of the | and that will continue into the next financial | | | Committee to make sure that we delegate | Audit Committee on 1 March 2023, drawing | year and beyond. | The UK Corporate Governance Code | | appropriately and sufficiently to Non- | on her extensive experience in financial | | (the Code) emphasises the value of good | We successfully completed a project this year Executive Directors who are able to focus on services and in the US. corporate governance to the long-term to review the Board composition for both | these more specialised areas. We have also | | | sustainable success of listed companies, | | --- | --- | --- | --- | | | As I highlighted in my Chair’s Statement on | regulated and unregulated entities across | | | maintained the delegation of some of IGGH’s | | | and our Board is responsible for | | | pages 4 and 5, a particular focus for us has | theGroup, and developed a Subsidiary | | | authority to the IG US Holdings Inc. Board that | | | ensuring that we have the appropriate | | | been developing stronger working | Governance Framework and Delegated | | | was established last year to oversee the | | | frameworks to comply with its | | | relationships both with each other and with | Authorities Framework that support the | | | tastytrade business as well as IG US, our | | | requirements. | | | the Executive team and their key people to | regional business model. | | OTCFX business, with our US-based Non- improve our collective effectiveness and We have applied the principles and Executive Director, Susan Skerritt, as a | | make up for the deficit we experienced due | | complied with all the provisions of the | | --- | --- | --- | --- | | member of that Board, alongside its Chair, | | Priorities for the year ahead | | | | tothe restrictions imposed on us coming | | Code during FY23, and both this | | Malcolm Le May, who has many years of | | With the pandemic now firmly behind us, we | | | | together in person as a result of the Covid-19 | | Governance Report and the Strategic | | experience on the Boards of US banks. | | will continue to take time to visit one region | | | | pandemic. After the Company moved to a | | Report set out how we have applied | during our offsite every year, the next being We remain committed to ensuring the highest regional model last year, the Board has had them throughout the year. planned for Europe in November. We will standards of governance throughout the detailed sessions with each of the three alsomonitor and respond to corporate A copy of the Code is available on the Group and continuously strengthening our Regional CEOs and their teams. This has governance developments, including the Financial Reporting Council’s (FRC’s) governance arrangements. The ESG brought us closer to operations and people upcoming changes to the UK Corporate website at frc.org.uk. Committee, in partnership with the Executive internationally, as well as to the needs of our Governance Code. | team, has evolved our ESG Strategy to ensure | clients in different markets and is something | | | --- | --- | --- | | we continue to be a responsible and | that we now plan to do every year. We have | FY24 will be an important year for further | | sustainable business. We are also really proud | also benefited from detailed ‘deep-dive’ | progressing the Company’s strategy of | | of the impact that our 1% pledge and | sessions on a range of topics to help boost | diversification and my Board colleagues | | community outreach programme is having in | our knowledge and understanding, including | andIlook forward to partnering with June | | our communities. Our Board members have | about: the FCA’s Supervisory Review and | andher team on this. | | participated in various activities to support | Evaluation Process (SREP); the newly | | | our partners, including a visit to a Teach First | introduced ICARA and its focus on the three | | | school in May 2023, which I personally | types of potential harm to the client, firm or | | | enjoyed greatly, and which gave me some key | market; Consumer Duty with its important | | | insights into the shared challenges faced by | new 12th FCA Principle that will apply to our | | | both business and school leaders. You can | UK regulated businesses from 31 July 2023; | | | find further details of our stakeholder | Carbon Literacy; our four-year plan for the | | | engagement activity on pages 70–71. | business; and commercial and regulatory | | developments in the crypto and decentralised 58 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and Company Information # The Board **The Board is responsible for determining the Group's strategy and for promoting our success, through creating and delivering long-term value for shareholders and other stakeholders.** 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 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. All data in The Board section is as at 31 May 2023. # Committee membership - Audit - ESG - Chair - Board Risk - Nomination - Disclosure - Remuneration # Mike McTighe Chair **Nationality:** British **Ethnicity:** White **Tenure:** Three years (Appointed 3 February 2020) Mike has a wealth of leadership, board and regulatory experience from both public and private companies. He is the Chair of Openreach Limited and Together Financial Services Limited. For over 20 years, Mike 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. He has also held many chair positions over the years, including chairing several UK and US public company boards. Mike spent most of his executive career at Cable & Wireless, Philips, Motorola and GE. He holds a BSc (Eng) honours degree in Electrical Engineering. ![img-1.jpeg](img-1.jpeg) # June Felix Chief Executive Officer **Nationality:** American **Ethnicity:** Chinese **Tenure:** Seven years (Appointed Non-Executive Director on 4 September 2016, and CEO on 30 October 2018) June was appointed as CEO on 30 October 2018, having served as a Non-Executive Director of the Company from 4 September 2016. She has had a successful career growing and leading global financial services and tech companies. June brings nearly three decades' experience in finance and digital technology sectors, having held senior management roles in New York, London, and Hong Kong. Previous roles include her position as President of Veritone Europe, various executive management positions at large multi-national businesses, including IBM's Global Head of Banking and Financial Markets, and senior roles at Citibank and Chase Bank. June is currently a Non-Executive Director of RELX PLC and The London Technology Club. She graduated from the University of Pittsburgh with a first class honours degree in Chemical Engineering and Pre-Med. ![img-2.jpeg](img-2.jpeg) # Charlie Rozes Chief Financial Officer **Nationality:** British/American **Ethnicity:** White **Tenure:** Three years (Appointed 1 June 2020) Charlie was appointed as CFO on 1 June 2020 and has a proven track record in financial control and reporting, accounting, tax, M&A, investor relations, risk and compliance, and audit. He is a highly experienced finance leader having held executive director roles in the financial services sector and led substantial change programmes in the UK and internationally. Charlie began his professional career with PricewaterhouseCoopers LLP, becoming a Partner in 2001 in the US management consulting practice, followed by senior executive roles at IBM and Bank of America. In 2007, he joined Barclays plc as Chief Financial Officer of Barclays UK Retail and Business Bank and was Global Head of Investor Relations from 2011 to 2015, and Group Finance Director at Jardine Lloyd Thompson plc from 2015 to 2019. Charlie has no current external appointments. He has an undergraduate degree from Tufts University and an MBA from the Southern Methodist University. ![img-3.jpeg](img-3.jpeg) Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 59IG GROUP HOLDINGS PLC Annual Report 2023 Company Information The Boardcontinued Board profiles C | | | Jon Noble | Jonathan Moulds | Rakesh Bhasin | | --- | --- | --- | --- | --- | | | | Chief Operating Officer | Senior Independent Director | Non-Executive Director | | | | Nationality: British | Nationality: British | Nationality: American/British | | | | Ethnicity: White | Ethnicity: White | Ethnicity: Indian | | | | Tenure: Five years | Tenure: Four years | Tenure: Three years | | | | (Appointed 1 June 2018) | (Appointed 20 September 2018) | (Appointed 6 July 2020) | | 0-3 years | Chinese | | | | | 4-6 years | Indian | | | | | | | Jon was appointed COO on 14 June 2019 with | Jonathan has extensive experience in financial | Rakesh brings extensive technology and global | | | | responsibility for Trading and Operations. He also | services in the UK, US and Asia during his 25+ | markets experience, specifically in Asia-Pacific. He is | | | | leads the business change office and chairs several | year executive career. He currently chairs Citi’s | a Non-Executive Director for a portfolio of | | | | of IG’s management committees. | largest global subsidiary CGML, Financial Markets | companies in multiple sectors and is Chair of CMC | | | | He first joined IG in 2000 as a trainee dealer, | Standard Board Limited and Litigation Capital | Networks, a Carlyle Group investment company | | | | reaching Dealing Director by 2007. In 2010, he | Management Limited. | based in Africa. | | | | became Dealing & Operations Director and in 2012 | He spent the majority of his career at Bank of | Rakesh was previously the Chief Executive Officer of | | | | was appointed Chief Information Officer (CIO). In | America where he became head of Bank of | Colt Technology Services, a Fidelity-owned company | | | | 2015, Jon became Head of IG’s Delivery pillar. He was | America’s International businesses and subsequently | providing network, voice and data centre services | | | | appointed to the Board on 1 June 2018. | European President of Bank of America Merrill Lynch | globally, Non-Executive Chair of KVH, an Asian-based | | | | As CIO, Jon had responsibility for setting and | and the CEO of Merrill Lynch International following | technology company and Non-Executive Chair of | | | | delivering our IT strategy, delivery of all work | the merger of the two companies. He was recently | Market Prizm, a financial services-focused | | | | programmes and for keeping the production | Group Chief Operating Officer at Barclays Plc. | technology company. | | | | environment stable and secure. He was | Jonathan has served on key industry associations, | Rakesh has also previously held senior positions | | | | responsible for IG’s IT systems, including | including the International Swaps and Derivatives | within AT&T, including Head of AT&T Asia-Pacific’s | | Female | American | its client interface systems. | Association as Chair, Association for Financial | managed network services business, and President | | | British | | Markets in Europe as Director, and Capital Markets | of AT&T Japan Limited and Senior Managing Director | Jon has no current external appointments. Senior Practitioners of the UK Financial Services of Japan Telecom Company Limited. He graduated from Durham University with a degree Authority and the Global Financial Markets He has a BSc in Electrical Engineering from George in Economics and obtained an Executive MBA from Association as member. Washington University. London Business School in 2007. He has a first class honours in Mathematics from the University of Cambridge and was awarded a CBE in the 2014 Honours List for services to philanthropy. Committee membership Nationality Tenure Ethnicity Gender Audit ESG C Chair Board Risk Nomination Disclosure Remuneration | | 17% 33% 17% | | --- | --- | | | 66% 33% 50% 8% | | White 75% British/American 17% Male 67% 7+ years 17% | | Shareholder and ### 60 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information The Boardcontinued Director independence | C | | C | | --- | --- | --- | | Andrew Didham | Wu Gang | Sally-Ann Hibberd | | Non-Executive Director | Non-Executive Director | Non-Executive Director | | Nationality: British | Nationality: British | Nationality: British | | Ethnicity: White | Ethnicity: Chinese | Ethnicity: White | | Tenure: Three years | Tenure: Two years | Tenure: Four years | | (Appointed 19 September 2019) | (Appointed 30 September 2020) | (Appointed 20 September 2018) | Executive Directors Independent Non-Executive Directors Andrew is currently Chair of GCP Infrastructure Wu Gang has a strong strategic and financial Sally-Ann has an extensive background in financial Investments Limited, a Director of N.M. Rothschild & advisory background and a wealth of international services and technology. She previously served as Sons Limited, Chair of the N.M. Rothschild Pension experience gained from a career of over 25 years in Chief Operating Officer of the International Division, Trust, and Non-Executive Director and Audit investment banking in Asia and Europe. and latterly as Group Operations and Technology The Company is compliant with the Code, which Committee Chair of Shawbrook Group plc. Wu Gang held senior leadership positions at a Director of Willis Group and has also held a number requires that at least half of the Board, excluding the Andrew was previously a Senior Independent number of leading China-based and global financial of senior executive roles at Lloyds TSB. Chair, should be made up of Non-Executive Directors Director of Charles Stanley Group plc, where he also services firms including establishing and leading the Sally-Ann has been a Non-Executive Director of who are determined by the Board to be independent. served as Non-Executive Chair of its principal London-based European investment banking group Shawbrook Group plc, Equiniti Group plc and The The Nomination Committee considers the operating company Charles Stanley & Co. Limited. at CITIC CLSA, the international platform of CITIC Co-operative Bank plc, serving as Chair or a member independence of the Non-Executive Directors on He was also a Non-Executive Director and Audit and Securities. Prior to this, he led M&A and General for several committees including Risk, Audit, behalf of the Board and this is reviewed annually. Risk Committees Chair of Jardine Lloyd Thompson Industrials client coverage groups at ICBC Nomination and Remuneration. The Directors consider factors such as length of Group plc. International. He also held senior level positions at She currently serves as Chair of Central Topco tenure and relationships or circumstances that Andrew was a Partner at KPMG from 1990 to 1997 Royal Bank of Scotland, HSBC and Merrill Lynch in Limited (Clear Group) and Non-Executive Director are likely to affect, or may appear to affect, the and is a Fellow of the Institute of Chartered Hong Kong and London. Wu Gang started his of Simon Midco Limited (Lowell Group), where she Directors’ judgement in determining whether Accountants in England and Wales. Upon leaving investment banking career at Goldman Sachs. chairs the Risk and Sustainability Committees. they remain independent. KPMG in 1997, he served as Group Finance Director He is a Non-Executive Director of Tritax Big Box REIT She holds a BSc in Civil Engineering from Following this year’s review, the Board concluded that of the worldwide Rothschild group for 16 years. From plc and Ashurst LLP, where he also chairs the Risk Loughborough University and an MBA from all the Non-Executive Directors continue to be 2012 he has served as an Executive Vice Chair in the Committee. He was previously a Non-Executive CASS Business School. independent in character and judgement and are free Rothschild group. Director of Laird plc. from any business or other relationships that could He has a BA (Hons) in Business Studies (Finance). He has an MBA from INSEAD, an MA from SOAS, materially affect the exercise of their judgement. and a BA from Fudan University. Board composition Committee membership Audit ESG C Chair Board Risk Nomination Disclosure Remuneration 25% 67% Independent Chair 8% Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 61IG GROUP HOLDINGS PLC Annual Report 2023 Company Information The Boardcontinued Conflicts of interest Directors have a statutory duty to avoid situations in which C they may have interests that conflict with those of the Group. Directors are required to disclose both the nature ### Malcolm Le May Susan Skerritt Helen Stevenson and extent of any potential or actual conflicts at the beginning of every Board and Committee meeting. Non-Executive Director Non-Executive Director Non-Executive Director In accordance with the CA2006, the Company’s Articles of Association allow the Board to authorise potential Nationality: British Nationality: American Nationality: British conflicts that may arise, and to impose such conditions or | limitations as it sees fit. During the year, potential conflicts | Ethnicity: White | Ethnicity: White | Ethnicity: White | | --- | --- | --- | --- | | were considered and assessed by the Board and | Tenure: Seven years | Tenure: Two years | Tenure: Three years | | approved, where appropriate. | (Appointed 10 September 2015) | (Appointed 9 July 2021) | (Appointed 18 March 2020) | The Board has access to independent professional advice, at the Company’s expense, if required. Malcolm has broad experience and knowledge of the Susan is a commercial banker, industry consultant Helen brings extensive marketing and digital financial services and investment sectors, along with and corporate treasury professional with expertise experience from a range of industries, together with extensive experience on the boards of publicly listed in global financial markets, regulatory matters and strong customer focus. She is an experienced companies. He also chairs IG US Holdings Inc. which strategic project management. Non-Executive Director with particular experience has responsibility for our North America business. Susan is an Independent Director of IG US Holdings regarding remuneration matters, and currently He was Remuneration Committee Chair and Senior Inc. which has responsibility for our North America chairs RM plc. Independent Director of IGGH from 2015 to 2020. business. She is also Lead Director of Community Helen was previously the Senior Independent Malcolm was appointed as Chief Executive Officer of Bank System and Independent Director of Tanger Director of Reach plc, a Non-Executive Director of Provident Financial plc in February 2018, having Factory Outlet Centers in the US and Non-Executive Skipton Building Society and served on the board of previously been its Senior Independent Director and Director of Falcon Group. She is Audit and Risk Kin and Carta as Remuneration Committee Chair and Interim Executive Chair. Committee Chair at Falcon Group and Audit Senior Independent Director. Helen was also the Committee Chair at Tanger Factory Outlet Centers. Chief Marketing Officer UK at Yell Group plc from Malcolm has previously served as a Non-Executive She previously served as Chair, CEO and President 2006 to 2012 and, prior to this, Lloyds TSB’s Group Director and Remuneration Committee Chair of at Deutsche Bank Trust Company Americas, Marketing Director. She started her career with Mars Hastings Group Holdings plc, Senior Independent Non-Executive Director and Human Resources and Inc. where she spent 19 years, culminating in her role Director of Pendragon plc, and Non-Executive Corporate Governance Chair at Royal Bank of as European Marketing Director leading category Director and Investment Committee Chair at RSA Canada US Group, and Executive Board Member at strategy development across Europe. Insurance Group plc. Prior to this, he held various executive roles at Morgan Grenfell plc, Drexel Deutsche Bank USA and Bank of New York Mellon Helen is a member of the Henley Business School Burnham Lambert, Barclays de Zoete Wedd Trust Company. Strategy Board and a Governor of Wellington Holdings, UBS AG, ING Barings Limited, Morley Fund Susan is a Trustee of the Village of Saltaire. College. Managers (now Aviva Investors) and JER Partners She has an MBA in Finance and International Business She has a BA (Hons) degree in Chemical Engineering Limited, where he was European President and from New York University Stern School of Business from Cambridge University. Matrix Securities Limited. and a BA in Economics from Hamilton College. Committee membership Audit ESG C Chair Board Risk Nomination Disclosure Remuneration Shareholder and ### 62 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information ### Governance Framework Governance Framework Board oversight The Board provides leadership by setting our strategic direction and overseeing management’s execution of the strategy. It is responsible for establishing our purpose The Board 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 delegates certain matters to five principal Board Committees: | Nomination | | ESG | | Audit | | Board Risk | | Remuneration | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Committee | | Committee | | Committee | | Committee | | Committee | | | Ensures the Board and Board | | Provides oversight and advice | | Oversees our financial reporting, | | Reviews and monitors our | | Establishes our Remuneration | | | Committees have the appropriate | | to the Board in relation to our | | maintains an appropriate | | principal and emerging risks | | Policy and ensures there is a clear | | | balance of skills, knowledge, | | ESG strategy | | relationship with the Internal and | | and the effectiveness of our risk | | link between performance and | | | diversity, experience, and | | | | External Auditors, and monitors | | management systems | | remuneration | | | independence | | | | our internal controls | | | | | | | | SEE FULL REPORT | | SEE FULL REPORT | | SEE FULL REPORT | | SEE FULL REPORT | | SEE FULL REPORT | | PG . 74 | | PG. 76 | | PG. 78 | | PG. 85 | | PG. 89 | | IG People Forum Legal Entity Remuneration Risk Committee Client Money & Governance Assets Committee Committee Management accountability Executive Committee Executive Risk Committee The Board delegates the execution of our strategy and day-to-day management of the business to Technology Risk Conduct and Op Risk Capital and Liquidity Risk Committee the CEO and the Executive team. Several management committees support the Executive team, Committee Committee Committee which are in turn supported by sub-committees. Best Execution Information Security Transaction Reporting Vendor Risk Management Enterprise Leadership Initiative and Committee Committee Committee Committee Pricing Committee Technology Committee Group (ELG) Innovation team Corporate Development Committee There is a comprehensive schedule of to our Risk Management and Internal In addition to the five principal Board The Matters Reserved to the Board and all matters reserved to the Board. These include Control Framework. We also have a Board Committees, our Board has established Board Committee Terms of Reference are agreeing the strategy, approving major Standing Committee to consider Board- a Disclosure Committee to make available on the Group website. transactions, annual budgets, and changes reserved matters at short notice, where full decisions on its behalf concerning the Our shareholders and other key stakeholders to our capital and governance structure. In attendance is not possible, or where there identification of Inside Information, and play an important role in monitoring and addition, our annual Board calendar provides are administrative matters to be considered to decide how and when the Company safeguarding our governance. You can find for, among other things, regular reviews that do not warrant a full Board meeting. should disclose that information in further information on how we engage with of operational and financial performance, accordance with our Disclosure Policy. Specific matters for approval and our shareholders, employees, and other key reviews of succession planning for the recommendation to the Board have been stakeholders on pages 20 and 21. Board and senior management, setting our formally delegated to Board Committees. risk appetite, and approving any changes Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 63IG GROUP HOLDINGS PLC Annual Report 2023 Company Information Governance Frameworkcontinued Division of responsibilities We have 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. Chair Non-Executive Directors (NEDs)Senior Independent Director (SID)  Leadership of the Board and promoting the highest standards of  Acting as a sounding board for the Chair  Independent of management corporate governance  Serving as an intermediary for the other Directors when necessary  Advising and constructively challenging management  Setting the tone and culture for an effective Board, facilitating  Available to shareholders if they have concerns when  Monitoring management’s success in delivering the agreed productive meetings communication via the normal channels is inappropriate or has strategy within the Risk Appetite and Control Framework  Supporting and challenging management in the development of already been exhausted  Determining appropriate levels of remuneration and reward for our strategy and commercial objectives  Evaluating the performance of the Chair with the other Directors the Executive Directors  Setting the Board agenda, allowing appropriate time for open  The Chair of the Audit Committee has responsibility for Internal and constructive discussion and challenge Audit, including ensuring the independence of the function  Engaging with major shareholders to understand their views on governance and strategy Chief Executive Officer (CEO) Chief Operating Officer (COO)Chief Financial Officer (CFO)  Developing and executing our strategy  Supporting the CEO in implementing our strategy and financial  Delegating authority in respect of trading, operations, business  Specific authority for day-to-day decision making relating and risk management change and ESG matters to the management of our business, including:  Recommending the annual budget and four-year financial plan to  Developing and maintaining our processes and ensuring effective — Delivering financial performance in line with the the Board management for internal operations agreed budget  Managing our internal financial control systems, including those  Responsibility for our Global Service Centres relating to safeguarding of client money and assets  Chairing a number of the management committees — Organisational design of our operations  Oversight of liquidity — Recruitment, leadership and development of our Executive  Maintaining relationships with key stakeholders Committee — Proposing our approach to vision, values, culture, diversity and inclusion to the Board — Maintaining relationships with key internal and external stakeholders Company Secretary  Working closely with the Chair, the CEO, the CFO and the Board Committee Chairs in setting agendas for Board and Committee meetings  Facilitating the accurate, timely and clear information flow to and from the Board, its Committees, and between Directors and senior management  Supporting the Chair in designing and delivering Directors’ induction and training programmes, and the Board and Committee performance evaluations  Advising the Board on corporate governance matters and Board procedures  Responsible for administering IG’s Dealing Policy and the AGM The Division of Responsibilities between the Chair and the CEO, and the role descriptions for the Chair, CEO and the SID are available on our Group website. Shareholder and ### 64 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information ### Board Governance Leadership and responsibilities As a collective body and as individual Attendance at Board and Committee meetings The role of the Board Directors, the Board is responsible for The Board provides leadership by setting our ensuring that it has the appropriate skills, strategic direction and overseeing knowledge, diversity and experience to The number of Board and Committee meetings attended by each Director during the year management’s execution of the strategy. It is perform its role effectively and independently. is set out below. Where Directors are unable to attend meetings, they are encouraged to responsible for establishing our purpose and give the Chairs their views in advance on the matters to be discussed. How the Board operates values, and for ensuring that our culture and The Board meets regularly, at least six times a Nomination ESG Audit Board Risk Remuneration behaviours are both appropriate and Board Committee Committee Committee Committee Committee year. During the last year, the Board held six consistent. It provides robust challenge within scheduled meetings. Chair a framework of effective risk management 1 and internal controls. The Board receives Senior Executives below Board level are Mike McTighe 6 of 6 4 of 4 – – – 8 of 9 timely and comprehensive information so it invited to attend meetings as required to Independent Non-Executive Directors can discharge its responsibilities, to present and discuss matters relating to their encourage strategic debate, and to facilitate business areas and functions. Jonathan Moulds 6 of 6 4 of 4 – – 8 of 8 9 of 9 robust, informed and timely decision-making. The full Board also meets when necessary to Rakesh Bhasin 6 of 6 – 4 of 4 6 of 6 – – In addition, Directors receive briefings from discuss important ad hoc emerging issues the CEO, CFO and other members of the Andrew Didham 6 of 6 – – 6 of 6 8 of 8 9 of 9 that require consideration between Executive Committee in between meetings. scheduled Board meetings. No such meetings Wu Gang 6 of 6 4 of 4 – – 8 of 8 – The Board is also collectively responsible for were held this year. Sally-Ann Hibberd 6 of 6 – 4 of 4 – 8 of 8 9 of 9 promoting our long-term sustainable success Each Director commits an appropriate 2 for the benefit of our shareholders, through Malcolm Le May 4 of 6 – 3 of 4 6 of 6 – – amount of time to their duties during the the creation of long-term value and 3 Susan Skerritt 5 of 6 – – 1 of 1 8 of 8 – financial year. The Non-Executive Directors contribution to wider society. The Board met the time commitment reasonably Helen Stevenson 6 of 6 4 of 4 4 of 4 – – 9 of 9 understands the importance of stakeholder expected of them pursuant to their letters engagement, and works hard to ensure as Executive Directors of appointment. much effective engagement as possible with June Felix 6 of 6 – – – – – our clients, shareholders, people, suppliers, The Chair and Non-Executive Directors regulators and communities, as well as regularly meet in the absence of the Executive Charlie Rozes 6 of 6 – – – – – considering the impact of our activities on the Directors, and separately with just the CEO Jon Noble 6 of 6 – – – – – environment. You can read more in the present. During the year, the Board, led by the Stakeholder Engagement and Section 172 (1) SID, met without the Chair present, to 1 Mike was unwell with Covid and sent his apologies for one Remuneration Committee meeting (June 2022) sections on pages 20–22. evaluate his performance. 2 Malcolm sent his apologies for Board (July and November 2022) and ESG Committee (October 2022) meetings due to prior commitments 3 Susan was appointed to the Audit Committee on 1 March 2023. She sent her apologies for one Board meeting (March 2023) due to a prior commitment Shareholder and ### IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements 65 Company Information Board Governancecontinued Succession planning and appointments Ongoing professional development to the Board To facilitate greater awareness and The Nomination Committee has specific understanding of our business and responsibility for considering the operating environment, all Directors appointment of Non-Executive and Executive are given regular updates on relevant Directors and recommending new changes and developments. appointments to the Board. It takes a Training opportunities are provided proactive approach to succession planning. through internal meetings, workshops, You can find more information on the work of presentations and briefings by internal the Nomination Committee in the Nomination advisers and management, as well as Committee Report on pages 74–75. The by external advisers. The Company whole Board is also involved in overseeing Secretary regularly updates the Board the development of management resources on any relevant legislative and regulatory across the Group. corporate governance-related changes. Induction The Directors meet with Executives Following appointment, each Director to receive further insights into the receives a comprehensive, formal induction, operations of the business in the linked to their individual experience, jurisdictions where we operate. to familiarise them with their duties and our business operations, risk and The Chair ensures that the Directors governance arrangements. The induction continually update and refresh programme, which is coordinated by the their skills and knowledge. Company Secretary, may include briefings on relevant industry and regulatory matters, 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 and the Company’s external legal counsel on the roles and responsibilities of a UK-listed company director. Helen Stevenson, Non-Executive Director, Teach First UK school visit Shareholder and ### 66 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information Board Governancecontinued | Board accountability | Our Risk Management Framework is | An annual formal review of the effectiveness | Internal controls over financial reporting | | --- | --- | --- | --- | | Financial and business reporting | supported by a system of internal controls, | of our system of risk management and | Our financial reporting process has been | | The Strategic Report on pages 9–55 | designed to embed the effective | internal controls has been carried out which | designed to provide reasonable assurance | | describes our purpose, strategy and business | management of our key business risks. The | supports the statements included in the | regarding the reliability of the financial | | model, which guide how we generate and | risk management and internal control systems | Annual Report and Financial Statements. | reporting and preparation of Financial | | preserve value over the long term and deliver | are designed to manage, rather than | The review focused on the overall Risk | Statements, including consolidated Financial | | our objectives. | eliminate, the risk of failure to achieve | Management Framework and the setting of | Statements, for external purposes in | | | business objectives, and can only provide | our risk appetite. It considered the key risk | accordance with UK-adopted International | A Statement of the Directors’ Responsibilities reasonable assurance against material assessment and monitoring activities, as Accounting Standards. The assessment of the in Respect of the Financial Statements is set misstatement or loss. well as the processes and controls in place overall effectiveness of the governance and out on page 122, and a statement regarding to manage our principal and emerging risks, risk and control framework included reviews the use of the going concern basis in Through reports from the Board Risk and for escalating exceptions highlighted of systems and controls relating to the preparing these Financial Statements is Committee and the Audit Committee, and by the risk-management processes. financial reporting process. provided in the Going Concern and Viability consideration of the ICARA and Wind-Down No significant failings or weaknesses Statement on pages 54–55. Plans, the Board regularly reviews and Internal controls over financial reporting were identified during the year. monitors our risk management and internal include procedures and policies that: Risk management and internal control control systems, and the effectiveness with There are risk management and internal We are exposed to a number of business  Relate to the maintenance of records that, which we manage the emerging and principal control systems in place for identifying, risks in providing products and services to in reasonable detail, accurately and fairly risks we face. evaluating, and managing the principal and our clients. The Board is responsible for reflect the transactions and disposals of emerging risks facing us in accordance with establishing the overall appetite for these The Directors confirm that the Board has our assets and liabilities the Code and FRC guidance. risks, which is detailed and approved in the carried out a robust assessment of the  Provide reasonable assurance that Principal Risks and Risk Appetite section set principal and emerging risks we face, Throughout the year and up to the date of this transactions are recorded as necessary out on pages 49–53, and for ensuring the including those that would threaten our report, we have operated a system of internal to permit the preparation of Financial maintenance of, and annually reviewing, our business model, future performance, controls that provides reasonable assurance Statements, and that receipts and risk management and internal controls. solvency or liquidity. We outline the risks to of effective operations covering all controls, expenditures are being made only in which we are exposed and the framework including financial and operational controls, accordance with authorisations of under which these risks are managed, and compliance with laws and regulations. management and respective Directors including a description of the system of | internal controls, in the Risk Management |  Provide reasonable assurance regarding | | --- | --- | | section on page 48, and in the Going Concern | prevention or timely detection of | | and Viability Statement on pages 54–55. | unauthorised acquisition, use or disposal | of assets that could have a material effect on our Financial Statements Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 67IG GROUP HOLDINGS PLC Annual Report 2023 Company Information ### Board Activities During the Year ### Our Board meeting agendas Board meeting focus during FY23 ### during the year addressed ### key areas of strategy, Business, operational highlights Strategy Performance ### governance, risk and financial and current trading ### performance, as set out  The Board had a dedicated Board Strategy  Financial performance review and approval of  Regular business performance updates in the schedule of Matters Day, in addition to the regular discussions on all financial results announcements and the including the issues and challenges faced by strategic initiatives and the strategic Annual Report management through reports from our CEO, ### Reserved to the Board and development of the business that took place  Discussion and approval of our proposed CFO and COO, and other members during Board meetings Capital Allocation Framework, including of the Executive Committee ### the annual forward calendar.  There was a focused Board Workshop dividend payments and the share buybacks  Reports on matters of interest such as on the four-year plan  Updates on performance against budget, the ‘Best of Both Worlds’ initiative on hybrid Our governance processes ensure that  Regional updates, including on regional prior year, and market analyst consensus working; cost of living impact on employees Directors receive accurate, timely and clear strategy, were delivered throughout in all locations; information, cyber security  Review of risks and opportunities for information throughout the year from a range the year during Board meetings, and emerging threats; tax strategy; intra- the FY23 budget, and agree the | of sources. This allows our Board and | | | Group funding; and gender pay reporting | | --- | --- | --- | --- | | | supplemented by standalone updates from | direction of travel of the FY24 budget | | | Committees to monitor and provide feedback | each Regional CEO and their leadership team | | | and four-year plan on matters of importance and to make  Received information about themes and informed decisions in the best interests of the market trends that could be used to help company and our stakeholders. We engage inform strategic development with our stakeholders to ensure we consider outcomes for them, and our decision-making reflects the need to maintain a reputation for People and leadership Investor relations Other high standards of business conduct and to act fairly between our shareholders.  Employee engagement survey results  Investor relations strategy and share  IG Brighter Future Fund updates  Refreshed D&I strategy update price performance  Received regular Board Committee  Talent review and pipeline development,  AGM and related shareholder interactions Chair reports and reports from the including succession planning for Directors  Extensive shareholder consultation with Chair of the IG US Holdings Inc. Board and Executive Committee members regards to the proposed Directors’  Externally-facilitated evaluation on the Remuneration Policy effectiveness of the Board, each Board Committee and individual Director There were a number of other deep-dive and training sessions for the Board during the year. Topics discussed included crypto, risk, ICARA, SREP, marketing and Carbon Literacy. We understand how important it is to engage with our stakeholders. By listening to them, we better understand the impact of our decisions on both them and the wider market, and are able to identify emerging risks and trends, which can then be factored into strategy discussions. The case study on the next page on the Group’s capital allocation demonstrates how the Directors have considered the long-term consequences and interests of stakeholders in their decision-making processes, while acting in a way that promotes the success of the Group for the benefit of its shareholders as a whole. Shareholder and ### 68 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information Board Activities During the Yearcontinued Case study: Capital allocation | A significant consideration for the Board | There were three main considerations | margin and can convert this quickly to |  Investors – our investors are impacted by | | --- | --- | --- | --- | | during FY23 was capital allocation. This has | which are the principles on which | cash. This affords the opportunity to both | many elements of the framework, the key | | always been one of the Board’s key | the framework was created: | invest in the business and provide | areas being the investment in the business, | | responsibilities, ensuring that the business | | attractive capital returns to shareholders | both organic and inorganic, as well as |  Corporate responsibility – our business is | delivers on its strategy and maximises value | | | returns to shareholders. We made capital | | --- | --- | --- | --- | | | built on a foundation of strong risk | Stakeholder impact | | | creation for stakeholders. We take a | | | returns totalling £363 million in the form of | | | management and responsibility to all | The way in which capital is allocated has a | | | consistent and transparent approach, and this | | | dividend and share buybacks during FY23 | | | stakeholders. This is shown in our OTC | wide-ranging impact on many stakeholders | | led us to release our Capital Allocation business model, which hedges against and we have taken care to consider our  Communities – the Brighter Future Fund, Framework (CAF) in July 2022. We worked some market risk, in our good relationships diverse stakeholders in the following ways: which commits 1% of profit after tax to with both internal stakeholders and external | | with regulators worldwide, in our robust | | charitable causes, benefits communities | | --- | --- | --- | --- | | advisers throughout the decision-making | |  Clients – our clients are impacted by | | | | client money controls, and in how we treat | | around the world. This equates to over £4 | | process and made sure to consider how the | | organic investments which are made into | | | | our clients every day. This priority needed | | million donated to our partners, such as | | framework would support our strategy. | | the business, to strengthen technology, | | | | to be reflected appropriately in the CAF | | Teach First and Learning With Parents | improve platforms, and broaden product Capital Allocation Framework  Invest and grow – our business has a offerings. During FY23, a key focus area  Regulators – our robust approach to risk The announcement of our CAF came history of innovation and sits within an was investing in data analytics to detect management is reflected in the priority we after several Board discussions, to industry with a growing addressable and support client vulnerability give to regulatory capital requirements. ensure we thoroughly understood all market. We are proud to have delivered an Our reported regulatory capital and options on the table. Our CAF, listed  People – our people are impacted by enviable trajectory of growth coupled with liquidity headroom remained comfortable in order of priority, is as follows: organic investments which are made in a high profit margin, and a key objective throughout the financial year the business to attract, retain and train  Regulatory capital requirements continues to be the growth of the our teams. We feel passionately about Company. To do so, we must secure  Organic investment to growth supporting our people and have chosen appropriate investment in our business to provide a one-off payment to those  Commitments on citizenship  Returns to shareholders – IG Group who were more materially impacted by  Regular distributions shareholders will all have individual the cost-of-living crisis interests in our business, but our  Inorganic investments competitive capital returns will be a  Additional shareholder returns common thread. We have a high profit Framework in action | During FY23 the Board approved decisions on capital allocation, as follows: | Each of these decisions was taken | We are committed to adhering to the CAF, | | --- | --- | --- | | | with all stakeholders in mind. The decision | which is key to providing the market with | | | to payout additional distributions in the form | insights into the Board’s views on capital | January 2023 July 2022 July 2022 July 2022 January 2023 Approval of a £50 May 2023 of a share buyback instead of a special allocation and providing consistency to the Approval of Recommendation to Approval of a £150 Approval of million extension of Approval of the dividend involved several considerations to decision-making process. We will continue to a 1% allocation | shareholders of the | | million share | | | the FY23 | the share buyback | four-year plan and | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | of FY22 profits to | | | | | determine the mechanism which was most | review the CAF periodically to ensure it | | FY22 final dividend | buyback programme | | | interim dividend | | programme, to a | FY23 budget | | | charitable causes total of £200 million accretive to shareholder value at the time remains appropriate for the business strategy. of the announcements. Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 69IG GROUP HOLDINGS PLC Annual Report 2023 Company Information ### Engagement with employees The Forum meets on a regular basis to discuss Town Halls ### We recognise that our people key matters, with FY23 addressing topics At several points throughout the year, the ### are integral to growing and such as our hybrid working approach, CEO, CFO, COO and other members of the ### maintaining our business and employee engagement results, our approach Executive Committee run engaging town to pay and reward, the People Strategy halls, both in-person and virtually, for all of ### therefore made sure that, updates, ESG updates and office renewals. our employees. We receive great feedback ### during a time of global on these sessions, particularly when they coincide with significant events in the year, for ### difficulty (from a social, Employee Benefits example following the release of our results. In May 2023 the Remuneration Committee ### political and economic received an update from the CPO and the ### perspective), employees were Head of Reward about incentives that were Employee Engagement Survey being rolled out to employees, including Every year, we invite our people to complete ### listened to, appreciated, a one-off booster payment for certain an externally-facilitated engagement survey, ### supported and rewarded. We colleagues in countries where the cost of and the Board then discusses the results of ### have engaged both directly living has increased most significantly. In these surveys. This gives our Directors insight addition, the Directors received regular into specific sentiments of our employees ### and indirectly, in-person and | | updates on other incentives that had | across the globe. In FY23, we were pleased to | | --- | --- | --- | | virtually throughout the year, | been implemented, including those | achieve an increased employee engagement | | | being tailored to specific jurisdictions, | score and receive positive feedback on areas | ### and some examples of how we depending on what employees value such as wellbeing and confidence in the ### have done so include: most. Benefits that have been introduced future. An area of focus is on the ease of during the year include additional transport getting things done. This has driven senior allowance, increased paternity leave management to accelerate plans to remove The People Forum and improved healthcare provisions. bureaucracy from the business, to clarify, The People Forum is a direct connection simplify, make it easier to deliver, and drive between the Board and our people, and we empowerment and collaboration. | recognise how valuable this feedback loop | Diversity and Inclusion | | --- | --- | | can be. Sally-Ann Hibberd joins each meeting, | A key focus for us is offering a safe, | | alongside our CPO, Barbara Duffy, and COO, | welcoming environment where everyone can | | Jon Noble, and provides verbal updates at the | be themselves and grow to their full potential. | | subsequent Board meeting, so that employee | Following the Executive Committee’s approval | | views and voices are reflected in the Board’s | of the refreshed D&I strategy in October | | business and deliberations. Members of the | 2022, the Remuneration Committee updated | | forum are nominated for a two-year term, and | the Non-Financial Metrics to include these | | we carefully consider gender, ethnicity, | future gender diversity targets. In addition, we | | geography, age and length of service, | have taken the view that Diversity should be a | | ensuring we have a diverse and wide-ranging | matter for the whole Board, rather than | | group of individuals to represent our people. | delegated to any one Committee. For more | information, please see the Diversity Report on pages 32–34. Katherine Whitton, IG Group Chief Marketing Officer, Moving Ahead networking event Shareholder and ### 70 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information ### Understanding our Stakeholders Shareholder engagement cycle FY23  Full Year 2022 results announcement Q1  2022 Annual Report and Accounts  IR Roadshow in US and Canada In addition to the shareholder engagement To ensure that members of the Board ### The Board recognises the  Investor Roadshow with Chief activities discussed in this section, the Board understand the views of major shareholders, Executive and Chief Financial Officer ### importance of maintaining recognises that the success of the business feedback is provided to the Board on any following FY22 Results ### good and constructive depends on its ability to engage effectively opinions or concerns expressed by  Debt investor roadshow with and work constructively with all key shareholders identified through the investor ### communication with our Chief Financial Officer, IR stakeholder groups, and for their views to be relations activity. The Directors also receive and Treasury in attendance stakeholders and has in place taken into consideration in Board discussions from the Executive team, as well as external  Q1 Trading update | | and decisions. The Board has identified a | sources, including brokers and financial | | | | --- | --- | --- | --- | --- | | a comprehensive programme | | | Q2 | | | | number of key stakeholder groups, and | advisers, regular updates on the market and | |  2022 AGM | | to facilitate throughout | details of these can be found on pages 20 | share price performance, shareholder | | |  Investec Conference – | | and21. | activity, and significant equity analysts’ | | | --- | --- | --- | --- | | theyear. | | | Chief Financial Officer | | | | research, and are made aware of the | and IR investor meetings | Directors receive specific training including a | The Directors engage directly and indirectly, | | consensus financial expectations of the | | | | --- | --- | --- | --- | --- | | | tailored induction process for new Directors | | |  Half year 2023 results announcement | | and virtually and physically, with stakeholders | | Group from the outside market. | | | | | together with an ongoing programme of | | Q3 | | | to ensure they are kept fully informed of | | | |  Half year investor roadshow with | | | training on strategic, legal and regulatory | During the year, Helen Stevenson, Chair | | | | material issues, and that they take | | | | Chief Executive and Chief Financial | | | developments relevant to the Group’s | of the Remuneration Committee, engaged | | | Officer following HY23 Results stakeholder interests into account when | | activities, enabling the Directors to comply | extensively with shareholders and held | | | --- | --- | --- | --- | | setting our purpose, values and strategy. The | | |  Debt investor roadshow with Chief | | | with their legal duties, including under s172 | meetings with a significant proportion of | | | Board’s consideration of key stakeholders is | | | Financial Officer, IR and Treasury in | | | of the Companies Act 2006. | those it approached. For information on the | | | an integral part of all decision-making by the | | | attendance | Directors’ Remuneration Policy and how we Board, and every paper presented to the Investors  In-person US roadshow with Chief engaged with shareholders, please see pages Board clearly sets out the impact on any As part of the ongoing investor relations Executive, Chief Financial Officer and 89–94. stakeholders for whom it is relevant. For more programme, the Executive team regularly IR Management information on s172, please see page 22. meet with investors and market analysts to The Chair, the Senior Independent Director,  In person Scandinavian roadshow discuss market developments, business the Audit Committee Chair, and the with IR Management strategy and financial performance. This Remuneration Committee Chair are available  Initial communication with programme includes presentations by to meet shareholders as part of the AGM and shareholders in relation to the management, investor roadshows, on request to discuss governance matters, proposed changes to our Directors’ attendance at investor conferences and other succession planning, remuneration policy, or Remuneration Policy events. Following the debt issuance last year, any other matters, and to ensure the Board is  Q3 Trading update this programme was extended to include debt aware of shareholder concerns not resolved Q4 investors and rating agencies as appropriate. through other communication mechanisms.  Virtual meetings to discuss the Materials and presentations used during The Directors provide feedback to the Board Directors’ Remuneration Policy with the Remuneration Committee Chair these events are made available on the Group on any views or concerns expressed to them website, which also provides a wide range of by shareholders.  In-person US roadshow in New York other useful information for both existing and with Chief Financial Officer, For more details on how the Board, or prospective shareholders. We also respond to Chief Operating Officer specific Directors, have engaged with and IR Management ad hoc requests from shareholders on a shareholders, please see our FY23 regular basis. shareholder engagement cycle, opposite. Katarzyna Korzeb, Global HR Business Partner, Krakow Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 71IG GROUP HOLDINGS PLC Annual Report 2023 Company Information Understanding our stakeholderscontinued Case study: Teach First School Visit Case study: Consumer Duty Champion ## School visit with Andrew Didham ## Teach First as Consumer Duty ## The visit was a fantastic The client is firmly at the ## Champion ## opportunity for our Board heart of everything we do In May this year, our Non-Executive Board ## members Mike McTighe, Helen Stevenson members to engage with and as Consumer Duty Andrew Didham became our Non- and Rakesh Bhasin visited The John Roan Executive Consumer Duty Champion ## School in London to experience first- our community and Champion, I support Mike during the year. He met with our UK hand the excellent work the Teach First ## further strengthened regulator, the FCA, to present our and June in ensuring that Programme is doing, supported by IG Consumer Duty Implementation Plan ## Group. More details on Teach First can be our commitment to this Consumer Duty is alongside management in February 2023, found in our ESG section, on page 25. ## key stakeholder group.” and we received positive feedback. He embedded in the business At The John Roan School, the senior engaged with our people, specifically ## Mike McTighe and we, as a Board, are leadership team is taking part in the Leading the Project Leads with whom he has Together Programme as part of the Teach Chair of the Board had active discussions, to provide the ## focused on consumer First initiative and making sustainable independent oversight needed on the changes to their school. During the visit, the The ESG Committee discussed the client-focused workstreams in his role outcomes.” Directors had an informative tour of the inspirational visit, which had provided an as Consumer Duty Champion. He also Andrew Didham school, met with the school’s leadership team insight into how educational institutions took part in a Consumer Duty Steering Non-Executive Director, Chair of the Audit and the representatives from Teach First and play such a key role in the development of Committee meeting in June 2023 in Committee and Non-Executive Consumer Leading Together Programmes. Listening to young people within our communities, and preparation for Consumer Duty coming Duty Champion their story and seeing the school in action, areas in which IG Group could offer further into effect for our UK regulated entities. they were impressed by the progress the support, both to Teach First and to other Andrew has extensive experience in the school had made in recent years. similar partners such as Teach for All. financial services industry and his biography The day also included an interactive ‘speed can be found on page 60. networking’ session alongside IG colleagues, rotating around small groups of sixth-form students to share their career journeys and answer their many, engaging questions. The visit closed with a Q&A session with the Head Teacher and her leadership team to learn more about the history of the school, the impact the Teach First Programme was making with support from businesses like ours, and what next steps in terms of future collaboration may look like. Shareholder and ### 72 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information ### Board Evaluation ### Each year, the Board monitors  Several providers were approached to provide their initial proposals to the Company ### Stage 1 and improves performance by Secretariat Team. The providers were assessed across a range of criteria, including evaluation, ### Selection of approach and cost ### reflecting on the effectiveness  The Board Chair and Company Secretary met with a shortlist of two providers to discuss their ### independent provider proposals and took references on each, before selecting Better Boards ### and quality of its activities and ### decisions. Individual and ### collective performance and ### Stage 2  Meetings between Better Boards, the Board Chair and Company Secretary took place to discuss the contribution of each Board and agree programme objectives, design and action plan, which comprised individual interviews ### Design of Evaluation and feedback sessions, in addition to an online questionnaire ### member is also assessed. ### Programme FY23 External Board Evaluation Process The FY23 Board and Board Committee ### Stage 3 Evaluation was externally facilitated by Better  Better Boards attended the March Board meeting to present the approach, and set the tone for the ### Boards Limited (Better Boards). Besides the Board Kick-Off 2023 Board Evaluation, which was received positively ### provision of this evaluation, there was no Meeting other contractual connection between IG Group or the individual directors and Better Boards. The content of this section of the Governance Report was reviewed by Better  Better Boards held one-to-one meetings with each Board member and with the Company Secretary ### Boards in advance of publication, who Stage 4 to understand their personal views of Board and Committee effectiveness, including any strengths, ### confirmed its accuracy. Board Interviews weaknesses, opportunities and risks ### Stage 5  All Board Members and the Company Secretary completed a confidential online questionnaire  Better Boards analysed the data and produced both general and individualised reports ### Online Questionnaire ### Stage 6  Each Director met with Better Boards individually to discuss the findings from their personalised ### Individual Feedback reports. The session took the form of a confidential, candid conversation, concluding with a personal action plan ### Sessions  As part of the May meeting cycle, each Board Committee considered the outcome of their respective Committee Evaluation and agreed any actions it wished to take forward ### Stage 7  The Board held a dedicated session on the results of the Board Evaluation, facilitated by Better Boards, with active engagement from all members ### Board Presentation  The Board Chair and the Company Secretary met with Better Boards to discuss next steps toformalise any agreed-upon actions Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 73IG GROUP HOLDINGS PLC Annual Report 2023 Company Information Board Evaluationcontinued | | | | | Board Committees | Progress against actions arising from the | | --- | --- | --- | --- | --- | --- | | Key Insights from the FY23 Evaluation | | Key Actions from the FY23 Evaluation | | The evaluation of Board Committees found | FY22 internal evaluation | | |  Board meetings are well chaired, and | |  Commit and invest to becoming an | that each remained effective in their support | In FY22, an internal evaluation was carried | | | the Board understands and | | even higher performing Board and | of the Board. | out, facilitated by Lintstock. The review | | | appreciates what Board members | | Executive Leadership Team | | consisted of the completion of performance | | | bring to the Boardroom. This provides | | | | evaluation surveys. Good progress has been | Individual Director Performance  Continue to keep Board Composition a good base to further increase its made on the following areas of development: The results of the evaluation, together with under review, particularly from D&I and performance and effectiveness and individual skills, time commitment and  Board dynamics: The relationship deficit skills perspectives decision making | | | independent assessments confirmed that | created by the pandemic was addressed | | --- | --- | --- | --- | | |  Work to better align the Board on the | each Director continues to make positive | | |  Board Composition scored above | | | during the year with in-person Board | | | most appropriate level of governance | contributions to the Board and to the Group | | | average. Some questions were raised | | | sessions held in addition to Board and | | | given our strategic direction | as a whole. | | | as to whether subject matter expertise | | | Committee meetings, including a separate | | should be added to the Board on some |  Continue to look at the allocation of | | Board strategy session, Board Workshops, | | specialist technical areas, such as | the Board’s time, especially in terms of | Chair Performance | periodic briefings from Regional CEOs and | | cyber security | our customers and markets as we | The performance of the Chair was evaluated | a Board offsite in Chicago in November | | | deploy our diversification strategy | by the Senior Independent Director based on | 2022. The Board has also met with our |  The Board and its Committees work feedback gathered from Board members in a topand upcoming talent, facilitated by well and there is a clear division of dedicated private session. The result theCPO responsibilities between the Board, its confirmed that Mike McTighe continued to Committees and executive leadership  tastytrade acquisition: A retrospective lead the Board effectively and demonstrated review of the acquisition was delivered  The Board scored particularly highly strong leadership and direction. and how it would support our strategy for establishing the purpose of the in the future organisation, vision and strategy and being united in standing firmly behindthem  Whilst average scores were high, there is opportunity to further discuss the organisation of Board meetings to help the Board in its decision making Shareholder and ### 74 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information ### Nomination Committee Report Chair’s Overview During the year, the CPO supported our Members continuing engagement with Russell Reynolds ###  Four independent Non-Executive I am pleased to present the Associates, an independent external Directors make up our Nomination ### report of the Nomination executive search firm, on the comprehensive  Mike McTighe Committee. Their biographies can be CEO Succession Planning process. We have ### Chair of the Committee found on pages 58–61 Committee for the financial been able to identify potential internal ###  Wu Gang  The Nomination Committee met four year ended 31 May 2023, to candidates, establish appropriate Committee Member times during the year. You can find full development plans and monitor progress ### share with you our activities details of attendance at Committee against those plans. We also began to look  Jonathan Moulds ### during the year and how we meetings on the table on page 64 beyond the candidates within immediate Committee Member ### have discharged our scope for CEO Succession Planning purposes,  The CEO, CPO and CLGO are standing  Helen Stevenson to those who may need longer to develop into ### attendees at Nomination Committee responsibilities. Committee Member the role. Nurturing an appropriate pool of meetings candidates in the long term means we’ll have The Nomination Committee ensures that the prospects for future senior positions. Board and its Committees are of the appropriate size, composition, balance of The Committee remained confident that the skills, knowledge, diversity, experience and structure and composition of the Board of FY23 key focus areas independence needed to support the IGGH and the other nested entities and their development and delivery of our strategy. We Committees, as well as the Board of IG US  CEO Succession Planning make recommendations on Board succession Holdings Inc., provided effective leadership to planning, which includes identifying and  Executive Committee support our future growth and strategy. recommending suitable candidates as part of Succession Planning Focus during the next financial year will be on business-as-usual succession planning for key developing succession plans for Board  Senior Talent Review roles as well as when a vacancy arises and members, including the Board Chair and the involving our external search partners to help Senior Independent Director. source candidates based on objective criteria. We are all committed to ensuring that we are a truly diverse organisation in all respects, across gender, social and ethnic backgrounds, cognitive and personal strengths and experience. We also review senior talent and leadership needs to make sure we have succession plans in place to the Board and senior management positions. Securing a diverse pipeline of talent means we can execute the Company’s existing and future strategy. Mike McTighe Chair of the Nomination Committee Shareholder and ### IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements 75 Company Information Nomination Committee Reportcontinued Role of the Nomination Committee Main activities during the financial year Committee Evaluation The principal responsibilities of the During the year, the Committee met An evaluation of Committee performance Priorities for the year ahead Committee include: principally to consider: was undertaken this year in line with the Committee’s Terms of Reference, as part  Continue to monitor progress against  Reviewing the structure, size and  The structure and composition of the of the external Board Evaluation exercise development plans for potential composition of the Board and its Board and its Committees facilitated by Better Boards, an independent internal CEO successors that are Committees to ensure that they are  CEO Succession Planning and monitoring consultancy. You can find details of the underway and commence work on appropriately balanced in terms of skills, the development of potential internal Board Evaluation process, outcome and broadening the planned development knowledge, diversity, experience and candidates considered to have the the actions on pages 72–73. Overall, of the longer-term talent pool independence, and making appropriate capabilities, experience and personal the Committee was considered to be recommendations to the Board relating to  Commence work on Board Chair, attributes required of a future CEO, and comprised of individuals with the requisite succession planning at Board level Senior Independent Director and knowledge, skills and experience; to have  Succession Planning for the Executive Non-Executive Director Succession  Ensuring that there is a formal, rigorous met with sufficient frequency; to have fully Committee and the output from the senior Planning and transparent procedure for the discharged its responsibilities under the talent review undertaken by the CPO appointment of new Directors to the Board Terms of Reference; and to have performed  Continue to monitor Succession effectively during the year. During the next Planning at Executive Committee  Identifying, and nominating for Board Diversity financial year, the Committee will consider level and ensure that we have the approval, suitable candidates to fill Board Details on our diversity and our Diversity the most effective way to communicate leadership capabilities to deliver vacancies as and when they arise Statement can be found in the Diversity with the wider Board about its activities the business strategy  Reviewing leadership needs, with a view to Report on pages 32–34. The Board continues and key workstreams on succession  Communicate to the Board on key ensuring our continued ability to compete to appoint on merit, based on the skills and planning and executive development. activities and workstreams during effectively in our marketplace and deliver experience required for membership, while the year on our strategy considering all forms of diversity, as well as independence. The Company insists on  Keeping apprised of strategic issues and search firms presenting a diverse pool of commercial changes affecting us and the candidates for consideration during the market in which we operate search process. Mike McTighe The Terms of Reference of the Committee Chair of the Nomination Committee were last reviewed in May 2023 and are 19 July 2023 available on our website. Shareholder and ### 76 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information ### ESG Committee Report Chair’s overview TheCommittee receives frequent updates Members on the vulnerability and accessibility ###  Four independent Non-Executive I am pleased to present the projects, which are both integral to help Directors make up our ESG Committee. ### report of the ESG Committee us to meet the needs of our current and  Sally-Ann Hibberd Their biographies can be found on pages future customers. We are also proud of the ### Chair of the Committee 58–61 for the financial year ended progress we have made in ensuring that ###  Malcolm Le May  The Committee met four times during 31 May 2023, to share with you the Group’s financial education offering Committee member the year. You can find full details of is comprehensive and inclusive. We have ### our activities during the year attendance at Committee meetings on achieved this through developing content  Helen Stevenson ### and how we have discharged the table on page 64 aimed at those at the very beginning of their Committee member ### our responsibilities. journey towards financial freedom – making  The Board Chair, CEO, COO, Group Head  Rakesh Bhasin these available on the Financial Freedom of ESG, CPO, CLGO and Chief Risk Officer Committee member The ESG Committee has an important Hub – and also through partnerships are standing attendees of the Committee. role in providing oversight on behalf of, with organisations like Teach First. Representatives from other areas of the and advice to, the Board in relation to our business attend the Committee meetings The Committee has worked closely with our ESG strategy and activities. This is the by invitation, as required COO, the Executive who is accountable for third ESG Committee report, following ESG, as well as our Group Head of ESG and the Committee’s formation in 2020. This FY23 key focus areas other stakeholders as necessary. The year the Committee has continued to take Committee continues to consider the ability significant steps to ensure principles of  Oversaw the evolution of the IG of our ESG strategy to reflect our purpose responsible and sustainable business are Group ESG strategy and values. Earlier this year, we evolved the formally embedded across the business. ESG Strategy and governance framework,  Sought and received insights and We are particularly proud of the progress of enabling the Group to position itself as a feedback from key stakeholders our vulnerability project, which was launched leader amongst our peers with respect to ESG including shareholders to better in FY22 and focuses on developing new matters, constantly seeking opportunities to understand their ESG priorities tools and systems to identify and support push boundaries and empowering our vulnerable clients, putting us at the forefront stakeholders to unlock a brighter future.  Oversaw a review of the accessibility of client care. In addition, following the Ateach meeting, the Committee reviews of IG products and services findings of an externally facilitated audit into progress against agreed metrics under each  Oversaw the launch and the initial the accessibility of products and services, of the pillars of the ESG strategy – for more implementation of new client we have been able to create a strategy for details please see our ESG Report on pages vulnerability processes embedding accessibility across the different 23–36. disciplines. This strategy includes training  Oversaw the first stages of launching employees and establishing processes to the Financial Freedom Hub ensure that accessibility is a consideration  Oversaw charitable grant-making process in everything that we do, helping us on our roadmap towards a culture of inclusion. Sally-Ann Hibberd Chair of the ESG Committee Shareholder and ### IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements 77 Company Information ESG Committee Reportcontinued Throughout the year, the Directors developed Role of the Committee Committee Evaluation their understanding of best practice in areas The principal roles and responsibilities of the An evaluation of Committee performance was Priorities for the year ahead of responsible and sustainable business by Committee include: undertaken this year in line with the inviting external and internal experts to Committee’s Terms of Reference, as part of  Oversee implementation and rollout of  Advocate and effectively bring greater Committee meetings. These updates on the external Board Evaluation exercise the new strands of the ESG strategy, focus on wider ESG matters within the market trends and corporate governance for facilitated by Better Boards. I am pleased to including the metrics and KPIs by Company matters relating to ESG, including within the report that the results for the Committee which IG will be measured different jurisdictions in which the Group  Oversight of our ESG strategy and its were very positive, and details of the Board  Continue to receive input on ESG operates, were delivered with both our implementation Evaluation process, outcome and the actions insights and trends, and listen to the internal and external stakeholders in mind, can be found on pages 72–73.  Monitoring and reviewing how the ESG perspective of key internal and from equity investors, investment advisers, strategy is received and regarded by our external stakeholders, ensuring we shareholders, and our workforce. We also stakeholders have visibility of the ever-developing continued to better understand our exposure regulatory environments and best to client related risks and ensured that these  Overseeing how all elements of the ESG practice around the world, and how are considered appropriately in the Group strategy are reported externally these relate to IG Risk Management Framework. Sally-Ann Hibberd  Ensuring that there are appropriate  Scrutinise and support IG’s Brighter The Committee has also continued to focus Chair of the ESG Committee policies in place to effectively support the Future Fund grant making to ensure it 19 July 2023 on challenging and supporting the Group in ESG framework remains on track to meet the relation to our charitable outreach through ambitious target of supporting 1  Assisting on other matters related to ESG Brighter Future initiatives and is particularly million people by 2026. This includes, as may be referred to it by the Board proud to have overseen the renewal of our for example, supporting Teach First’s strategic partnerships with Teach First and  Oversight of the Brighter Future Fund, the initiative to get 200 head teachers into Teach For All for another three years (see Group’s Charitable Giving budget the schools serving socioeconomically page 25 for more information). In addition, challenged communities across during the year, Directors attended events to The Terms of Reference of the Committee, England in the next three years | learn more about the charity partners that we | which were last reviewed in May 2023, are | | | --- | --- | --- | | are supporting around the globe. This | available on our website. |  Communicate to the Board on key | | included a visit to a Teach First school in the | | activities and workstreams during | | UK, a meeting with the CEO of our Polish | | the year | strategic partner Women in Technology, and an audience with CEOs from the global Teach For All network. These provided opportunities for the Directors to better understand how we can support their important work (for more information, please see our Teach First Case Study on page 71). Shareholder and ### 78 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information ### Audit Committee Report Chair’s Overview I am pleased to report that significant Members progress has been made in improving the ###  Four independent Non-Executive Directors I am pleased to present the control environment for Privileged Access make up our Audit Committee, including ### report of the Audit Committee Management and client money and assets  Andrew Didham individuals with recent and relevant during the year, both of which were key focus ### Chair of the Committee financial experience. Their biographies can for the financial year ended areas in last year’s report. We continue to be found on pages 58–61 ###  Rakesh Bhasin 31 May 2023, to share with you closely monitor accounting matters related to Committee member  The Committee met six times during the the tastytrade CGU, as well as the ongoing ### our activities during the year year, including an ad hoc meeting on integration of internal control processes for  Malcolm Le May ### and how we have discharged tastytrade acquisition accounting in July the tastytrade business. Committee member ### 2022 and a joint meeting with the Board Risk our responsibilities. During the year, I visited Chicago and Krakow  Susan Skerritt Committee in September 2022. You can to better understand the financial reporting Committee member find full details of attendance at Committee In my third report as Committee Chair, I am and other internal controls operated in (appointed 1 March 2023) meetings on the table on page 64 delighted to introduce Susan Skerritt as a theselocations. Committee Member. Susan joined the  The Board Chair, CFO, CEO, CLGO, Global Committee on 1 March 2023, adding to her We remain alert to regulatory and legislative Head of Internal Audit and representatives existing Non-Executive responsibilities as a developments for matters under our remit. from the External Auditor, member of the Group Board and Board Risk Our annual update from PwC focused on PricewaterhouseCoopers LLP (PwC), Committee, and as a Non-Executive Director FRC Corporate Reporting updates and attend Committee meetings by of the IG US Holdings Inc. Board. With her on the proposals and timelines for UK standinginvitation extensive experience in financial services and Government’s Corporate Reform package.  Committee members also meet the US markets, her appointment further Despite some of the uncertainties around separately with the Global Head of Internal enhances our diversity of skills, experience the scope and timeframes of the reforms, Audit and the External Auditor at various and thought. we are looking closely at internal controls points in the year so that any issues or over financial reporting given its importance As a Committee, we remained focused on the concerns may be raised freely to the and we received updates from management oversight of financial reporting and the Committee without management present throughout the year on our plans. Together surrounding control environment throughout with the Board, we are focused and reviewing the year. FY23 key focus areas and reacting to the recent FRC consultation on revisions to the UK Corporate Governance Code and publication setting out the  Internal controls over Financial minimum standards for Audit Committees. Reporting  tastytrade cash generating unit (CGU) impairment testing  Privileged Access Management Andrew Didham Chair of the Audit Committee Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 79IG GROUP HOLDINGS PLC Annual Report 2023 Company Information Audit Committee Reportcontinued We continue to work well with other Board Role of the Audit Committee Committees, and once again held a joint The Committee’s principal responsibilities are to: meeting with the Board Risk Committee in Financial reporting Control environment External Auditor September 2022 to review and discuss  Monitor the integrity of the Group’s  Monitor the effectiveness of the Internal  Oversee the relationship with the External matters common to both Committees, Financial Statements Audit function Auditor, including annual approval of the including risk and internal controls. This external audit plan, review of audit included: Privileged Access Management, the  Review the significant financial issues and  Monitor the effectiveness of our control opinions, setting of External Auditor Risk Acceptance Framework, and the review judgements related to the Group’s environment, including performance of our remuneration, and reporting the results of of financial and regulatory capital forecasts in Financial Statements IT systems, and via Internal Audit reports the external audits to the Board preparation for our first ICARA and Wind  Assess the quality and acceptability of  Oversee the systems and controls relating Down Plans under the IFPR Regime. There is a  Monitor the effectiveness, objectivity and accounting policies and practices used to the holding and management of client helpful level of cross-committee membership, independence of the External Auditor, money and assets | with Susan Skerritt and I both being Board |  Review the processes to support the | | | including factors related to the provision of | | --- | --- | --- | --- | --- | | Risk Committee Members. | assessment and determination of the |  Review and approve whistleblowing | | audit and non-audit services | | | principal risks that may have an impact on | arrangements | | | | As we look forward to FY24, the | | | The Terms of Reference of the Committee | | our solvency and liquidity | Committee will continue to focus on | |  Provide oversight over the risk-based | were last reviewed in May 2023 and are | | --- | --- | --- | --- | | Internal Controls over financial reporting |  Monitor the availability of distributable | system for the governance, operation and | available on our website. | | and the further integration of the tasty | profits for dividend payments | maintenance of the Group’s legal entities | | business. The Internal Audit function will  Oversee the approach to tax management also undertake its five-yearly External and control Quality Assessment which I look forward to reporting on in my next report.  Review the inherent risks in our financial reporting process and systems Shareholder and ### 80 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information Audit Committee Reportcontinued Main activities during the financial year Financial reporting In relation to financial reporting, the primary responsibility of the Committee is to work with management and the External Auditor to review the appropriateness of the half-year and full-year Financial Statements. During the year, the Committee:  Assessed the quality and acceptability of accounting policies and practices used by management and concluded that they were appropriate  Concluded that disclosures were clear and compliant with financial reporting standards and relevant financial and reporting requirements  Considered material areas in which significant estimates have been applied or discussed with the External Auditor. The details of the primary areas of significant estimates and disclosure in relation to the Financial Statements for FY23 are set out on pages 131–189  Reviewed announcements and Financial Statement for full and half-year results and recommended them to the Board Our other key activities are outlined below: Committee Activity Outcome Going concern and long-term viability  Evaluated reports from management that set out the view of the  Agreed to recommend the Going Concern and Viability The Directors are required to make a Group’s going concern and longer-term viability. These reports Statement to the Board for approval, taking into account the statement in the Annual Report as to the detailed the outcomes of stress tests after applying multiple assessment by management of stress-testing results and going concern and longer-term viability of the scenarios to determine how we were able to cope with riskappetite Group. The Committee is required to review deterioration in liquidity profile or capital position the processes to support the assessment and  Considered, along with the Board Risk Committee, the ICARA determination of the principal risks that may underpinning the firm's capital and liquidity adequacy appraisal have an impact on our solvency and liquidity. Carrying value of goodwill and other  Reviewed a report from management setting out the key  Concluded that there should be no change to the recorded intangible assets assumptions used in the impairment review of the goodwill balance carrying value of the goodwill and other intangible assets, In accordance with accounting standards, we and an associated sensitivity analysis, including the support based on the assessment performed are required to review any goodwill balances provided by an independent external valuation agency in valuing the  Concluded that adequate disclosure was included within the for impairment and to consider the underlying tastytrade CGU as part of the annual goodwill impairment testing Financial Statements assumptions used in determining the carrying  Considered the work of the External Auditor on goodwill and value of these assets. In addition, we are intangible assets required to assess whether there is any indication the other intangible assets may beimpaired. Alternative performance measures  Discussed the alternative performance measures included within  Concluded that the alternative performance measures We are required to define any alternative the Annual Report provided a fair representation of business performance and performance measures used and to explain position, and that adequate disclosure was included to  Received an update from PwC on recent accounting developments why they are useful or more meaningful reconcile them to the closest UK-adopted International including findings from the FRC Annual Review relating to todescribe the performance during the Accounting Standards measures alternative performance measures as part of its May meeting period and to reconcile them to the closest UK-adopted International Accounting Standards measures. Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 81IG GROUP HOLDINGS PLC Annual Report 2023 Company Information Audit Committee Reportcontinued Committee Activity Outcome Tax provisions  Reviewed a report from management that detailed the assumptions  Concluded that the corporation tax charge and provisions Calculating the Group’s corporation tax made in calculating the Group’s corporation tax charge and recorded were appropriate and complete charge involves a degree of estimation and provisions. Our External Auditor also provided commentary to the  Recommended the Group Tax Risk Management Policy and judgement, as the tax treatment of certain Committee on this Tax Strategy for Board approval items cannot be finally determined until  Reviewed our Group Tax Risk Management Policy, Tax Strategy and resolution has been reached with the relevant  Approved the Tax Governance Framework Tax Governance Framework 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. Fair, balanced and understandable  Reported on the preparation of the FY23 Annual Report with the  Advised the Board that the Company’s FY23 Annual Report is The Board is required to provide its opinion on Board, having assessed the quality of reporting through discussion fair, balanced and understandable, following its review whether it considers that the 2023 Annual with management and the External Auditor Report, taken as a whole, is fair, balanced and understandable, and provide the information necessary for shareholders to assess the Company’s position and performance, business model and strategy. Control environment Other matters addressed by the Committee included focus on the effectiveness of our control environment and performance of our IT systems, and on the Internal Audit, including the objectivity and independence of Internal Audit personnel. Our main activities are summarised below: Committee Activity Outcome Risk management and internal control  Received a report from the Board Risk Committee on the overall  Agreed to recommend to the Board the Annual Report The Committee is required to assist the Board effectiveness of the Risk Management Framework and internal statements relating to the effectiveness of the Risk in the annual review of the effectiveness of control systems, including an assessment of risks that might Management Framework and internal control systems our Risk Management Framework and internal threaten our business model, future performance, solvency or control systems. liquidity  Particular focus was given to the control environment during the year in respect of Corporate Actions and Privileged Access Management, where the Committee received regular updates from management regarding the positive progress made in these areas against agreed action plans  Reviewed the associated disclosures within the Accountability section of the Governance Report in this Annual Report Shareholder and ### 82 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information Audit Committee Reportcontinued Committee Activity Outcome Internal Audit  Monitored the effectiveness of our Internal Audit function  Approved the risk-based audit plan The Committee is required to oversee the in the overall context of our internal controls and risk  Concluded that Internal Audit function supports the work of performance, resourcing and effectiveness of management systems the Committee and remains effective, efficient and robust, with the Internal Audit function.  Reviewed the risk-based Internal Audit plan appropriate processes  Monitored management’s responsiveness to Internal Audit findings  Considered the function to have sufficient resources to deliver its proposed audit plan  Reviewed Internal Audit reports and themes arising from them  Approved the Internal Audit Charter  Reviewed the performance of the Internal Audit function against the plan, including the results of an internal self-assessment  Recommended the Internal Audit Scorecard as proposed to the Remuneration Committee  Reviewed the Internal Audit Charter  Reviewed the Internal Audit Scorecard to feed into the FY23 variable remuneration for individuals in the function Client money and assets  Monitored the effectiveness of the control environment relating to  Reviewed the control environment at both Group and The Committee has a responsibility for client money and assets and received, via periodic reporting from entity level overseeing our systems and controls relating management and the Client Money and Assets Committee  Concluded that the control environment remained effective to the holding and management of client  Considered the report from the External Auditor on the client money and assets. money control environment and operations  Received reporting on the control environment of Corporate Actions Whistleblowing  Received periodic reporting from management on the Group’s  Concluded that whistleblowing processes were operating The Committee considers the adequacy of whistleblowing arrangements, including Group and local policies effectively during the period under review and that the our arrangements by which employees may and employee training Whistleblowing Policy remained fit for purpose in confidence raise concerns about improprieties in matters of financial reporting or other matters. Legal entity governance  Received periodic reporting from the LEGCO on the work that had  Recommended the DAAF for Board approval To aid with its review of corporate been undertaken during the year to review legal entity governance  Approved the Global Legal Entity Governance Policy governance, the Committee has received globally, including the Legal Entity Governance Refresh Project, support from the CLGO and Group Company Delegated Authority and Approvals Framework (DAAF) and Global Secretary, whose Legal Entity Governance Legal Entity Governance Policy Committee (LEGCO) has provided oversight over the risk-based system for the governance, operation and maintenance of the Group’s legal entities. Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 83IG GROUP HOLDINGS PLC Annual Report 2023 Company Information Audit Committee Reportcontinued External Auditor Our main activities are summarised below: Committee Activity Outcome Oversight of External Auditor  Met with the key members of the PwC audit team to discuss the  Approved the audit plan and the main areas of focus, including The Committee is required to oversee the FY23 audit plan and areas of focus the potential risk of management override of controls and the work and performance of PwC as External valuation of customer relationships and assessment of the  Assessed regular reports from PwC on the progress of the FY23 Auditor, including the maintenance of audit carrying value of the tastytrade CGU audit and any material issues identified quality during the period.  More information on the Committee’s role in assessing External  Debated the draft audit opinion ahead of the FY23 year end. Auditor performance, effectiveness and independence of can The Committee was also briefed by PwC on critical accounting be found on page 84 estimates, where significant judgement was needed Audit and audit-related fees  Reviewed and approved a recommendation from management on  Concluded that the FY23 audit and audit-related fees are Audit-related fees include those related the Company’s audit and audit-related fees during the year appropriate. A breakdown of audit and non-audit related fees to the statutory audit of the Group and its is in note 5 to the Financial Statements on page 148 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. Non-audit services and fees  Reviewed all arrangements for non-audit fees. Fees in relation to  Approved arrangements for non-audit fees. During the year, To prevent the objectivity and independence permitted services below £0.05 million are deemed pre-approved non-audit fees of £0.2 million were paid to PwC, as discussed in of the External Auditor from becoming by the Committee and are subject to the approval of the CFO. Fees note 5 to the Financial Statements compromised, the Committee has a formal above £0.05 million must be approved by the Committee, through policy governing the engagement of the the Committee Chair External Auditor to provide non-audit  Received an explanation from PwC of its own in-house services. The policy is reviewed on an annual independence process basis. The Committee reviewed our policy governing non-audit work against details of  Received confirmation from management that there were no regulations on the statutory audit of public exceptions to fee limits and approval processes, per the policy, interest entities. during the year Shareholder and ### 84 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information Audit Committee Reportcontinued | External Auditor Effectiveness | External Auditor Reappointment | Committee Evaluation | | | | --- | --- | --- | --- | --- | | In assessing the effectiveness and | External audit services were last tendered in | An evaluation of Committee performance was | Priorities for the year ahead | | | independence of the External Auditor, the | FY20, where PwC was reappointed following | undertaken this year in line with the | | | | Committee considered relevant professional | a competitive tender process. PwC has been | Committee’s Terms of Reference, as part of | |  Monitoring management's response | | and regulatory requirements and the | our External Auditor for 13 years. The FY23 | the external Board Evaluation exercise | | to the proposed reforms to | | relationship with the External Auditor as | audit was led by Carl Sizer. Under the partner | facilitated by Better Boards, an independent | | corporate reporting and associated | | a whole. The Committee monitored the | rotation rules set out in the applicable ethical | consultancy, and I am pleased to report that | | internal controls | | External Auditor’s compliance with relevant | standards, his final year as partner will be | the results for the Committee were very | | |  Ensuring the Committee meets the regulatory, ethical and professional 2025, after five years of service. The positive. Details of the process, outcome and finalised requirements of the FRC guidance on the rotation of partners, Company has complied with the provisions of the actions can be found on pages 72–73. concerning minimum standards for and assessed its qualifications, expertise, the Competition and Markets Authority’s Audit Committees | resources, and quality of people and | Statutory Audit Services for Large Companies | | | --- | --- | --- | | service provided, including a report from | Market Investigation (Mandatory Use of |  Overseeing an external assessment of | | the External Auditor on its own internal | Competitive Tender Processes and Audit | the firm's Internal Audit arrangements | | quality procedures and independence. | Committee Responsibilities) Order 2014 for | |  Continuing to focus on the tastytrade the financial year under review. As part of the assessment, a questionnaire Andrew Didham Cash-Generating Unit as part of was completed by key stakeholders. The The Committee is responsible for making Chair of the Audit Committee goodwill impairment testing 19 July 2023 questionnaire addressed matters including recommendations on the appointment, the External Auditor’s independence, reappointment and removal of the External objectivity, the quality of planning and Auditor, and for assessing and agreeing the execution of the audit, insights and added audit and non-audit fees payable to them. value and general support and Following our assessment of the effectiveness communication to the Committee and of the External Auditor, the external audit management. The results were analysed, and process and their independence and a report was presented to the Committee. objectivity, the Committee recommends that | The Committee assessed the robustness of | the Board propose the reappointment of PwC | | --- | --- | | the audit process, specifically how the auditor | for shareholder approval at the Company’s | | challenged management’s key assumptions | 2023 AGM. | and demonstrated professional scepticism, There are no contractual obligations through discussion with the audit partner, by restricting choice of External Auditor. reviewing PwC’s findings on areas which required management judgement and in considering the quality and depth of the auditor’s observations and challenge. Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 85IG GROUP HOLDINGS PLC Annual Report 2023 Company Information ### Board Risk Committee Report Chair’s Overview As a business, this year we have continued to Members demonstrate the robustness of our Group ###  Five independent Non-Executive I am pleased to present the Risk Management Framework. In light of Directors currently make up our Board ### report of the Board Risk ongoing heightened risks globally, including  Jonathan Moulds Risk Committee. Their biographies can interest rate rises and geopolitical instability, ### Chair of the Committee be found on pages 58–61 Committee for the financial we continue to closely monitor and adapt to ###  Andrew Didham  The Board Risk Committee met eight year ended 31 May 2023, to changes in the regulatory landscape, such as Committee member times during the year, including a joint the introduction of Consumer Duty in the UK, ### share with you our activities meeting with the Audit Committee in as well as those further afield, particularly  Wu Gang ### during the year and how we September 2022. You can find full details those relevant to the tasty business in the US. Committee member ### of attendance at Committee meetings have discharged our Our focus on good client outcomes, resilience  Sally-Ann Hibberd on the table on page 64 and our control infrastructure have meant ### responsibilities. Committee member that we are well placed to respond positively  The Board Chair, Executive Directors, to new challenges and developments and  Susan Skerritt Chief Risk Officer (CRO), Chief This is my fifth report as Committee Chair have seen limited manifestation of risk, but we Committee member Compliance Officer (CCO), CLGO andI continue to work proactively and continue to be alert to developments. There is and the Global Head of Internal Audit collaboratively with the Risk and Compliance more information on our Risk Management attend Committee meetings as teams and hold them to account to ensure we Framework in the dedicated Risk section on standing attendees uphold the highest standards for our clients page 48. and our business. Our Committee remains FY23 key focus areas focused on providing important oversight and I can report that the Risk function, advice to the Board, particularly for a business headed by the CRO, continues to embed  ICARA and Wind Down Plan like ours with the range of risks we face, and a holistic approach to risk management. always with our clients in mind. We We link risk reporting to the key risks  Consumer Duty Implementation Plan understand how important it is to review the facing our business through the Risk key current and emerging risks faced by our Taxonomy and Key Risk Indicators in line business, and this is reflected in our with our Risk Appetite Statement and Risk Committee agenda. Management Framework, which we review on an annual and continuous basis. Jonathan Moulds Chair of the Board Risk Committee Shareholder and ### 86 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information Board Risk Committee Reportcontinued The business continues to embed the Consumer Duty has also been discussed in Role of the Board Risk Committee operational risk management systems into detail at the Committee this year, following The Committee’s principal responsibilities areto: the business, with strong stakeholder delegated the authority from the Board to  Provide oversight and advice to the Board in relation to our current and potential future engagement that encourages a culture of oversee management’s compliance with this risk exposures and future risk strategy including how we determine our risk appetite event reporting. This year, we have had principle. We have received regular updates and tolerance, and how we consider the current and prospective macroeconomic and extensive discussions with management on on the Consumer Duty Implementation Plan financial environment | the operational risk scenario analysis and | throughout the year and as we approach the | | | --- | --- | --- | | modelling for our first ICARA. | 31 July 2023 implementation date, I ensure |  Review the design and implementation of our general Risk Management policy and | | | that the Board is kept updated as appropriate. | measurement strategies | Operational risk remains a key focus for us as One of our Committee Members, Andrew a Committee and we review the framework to  Conduct a risk assessment of any proposed strategic transaction, focusing on implications Didham, has been appointed the Non- ensure it is aligned with our diversification for the risk appetite and risk tolerance of the Group, taking independent external advice Executive Consumer Duty Champion as part strategy. We also act as an escalation point where appropriate of our Consumer Duty preparations. for significant operational risk events and  Consider and regularly review our risk profile relative to current and future strategy and risk provide guidance as needed. We have continued to receive third-line appetite, identifying any risk trends, material regulatory changes, concentrations or reporting and assurance from Internal Our inaugural ICARA, with its focus on exposures, and any requirement for policy change Audit focused on the state of the Risk identifying and managing potential harm to Management Framework, particularly for  Carry out a robust assessment of our emerging and principal risks clients, the markets and the Group itself, operational risk, and are pleased to report along with the Wind Down Plan, were key  Review our ICARA and Wind Down Plans and recommend them to the Board continued improvements as it becomes focus areas this year. We received detailed embedded further.  Monitor effectiveness of the financial crime framework and receive an annual report from management reporting throughout the year, the Anti-Money Laundering Reporting Officer on the operation and effectiveness of IG’s Anti including at our annual Risk Workshop in As with last year, we held a joint meeting with -Money Laundering and Countering Terrorist Financing controls October 2022, where we also welcomed the Audit Committee to review and discuss presentations from external advisers. We matters common to both Committees. This  Oversee management’s preparation for FCA’s Consumer Duty regulation and compliance reviewed and recommended the ICARA and year, we reviewed together the financial and following its implementation on 31 July 2023 Wind Down documents to the Board in regulatory capital forecasts in preparation for November 2022, which have since been the ICARA and received a Privileged Access  Periodically review the design of the Group’s corporate insurance cover against current and reviewed by the FCA in 2023 as part of its Management update from IT. future risks and review the insurance renewal terms to recommend to the Board SREP, I commend the team’s hard work on As we look forward to FY24, we, as a  Provide advice to the Remuneration Committee on the alignment of the Remuneration delivering our first ICARA as we await the committee, will continue to constructively Policy to risk appetite and annually review remuneration-related risks outcome of the SREP. challenge management and hold them to  Monitor the adequacy and effectiveness of resources within Risk and Compliance functions The Compliance function, headed by the account on the robustness of our risk CCO, has provided those of us on the management, internal controls and  Review the Group’s exposure to climate-related risks and opportunities to monitor trends Committee with regular reporting of second- compliance framework, and their ability and consider whether such risks should be considered principal risks line compliance assurance activity, details of toremain fit for purpose and continue to The Terms of Reference of the Committee were last reviewed in May 2023 and are available on regulatory change both in the UK and abroad, keeppace with the strategic ambitions of our website. and the assessment of key financial crime theGroup. controls, with a focus on the detection and prevention of market abuse. Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 87IG GROUP HOLDINGS PLC Annual Report 2023 Company Information Board Risk Committee Reportcontinued Main activities during the financial year Risk Management Framework (RMF) and Risk Appetite Statement (RAS) New Strategic Initiatives  Reviewed and recommended updates to the RMF and RAS for Board approval during  Reviewed the impact of Digital Assets on Group Risk Appetite in July 2022 and approved the year, including those to incorporate IFPR and Consumer Duty the launch of Digital Wallet Phase 1 from a risk perspective in October 2022, as well as its overall approval following a delegation of authority from the Board  Received periodic reporting from Internal Audit on their opinion on the RMF in September 2022 and March 2023 Consumer Duty  Monitored management’s preparation for Consumer Duty requirements throughout Current and Emerging Risks the year, receiving frequent updates from the Consumer Duty Project. The annual  Reviewed reporting on current and emerging risks facing the business, grouped by type Risk Workshop in October 2023 included a presentation from external counsel on (Regulatory, Commercial, Business Model, Conduct & Operational) and rated by severity, Consumer Duty in September 2022 and March 2023 Financial Crime ICARA and Wind Down Plan  Received a Financial Crime update, including Market Abuse and Anti-Money Laundering,  Reviewed management’s preparations for our first ICARA and Wind Down Plan in November 2022 documents, including: capital and liquidity projections, Business Model Risk Internal Assessment, stress testing, and operational risk scenario analysis in July, September and  Recommended the MLRO Report for the 2022 calendar year to the Board in October 2022. ICARA was a key topic for this year’s Risk Workshop in October 2022, March 2023 with presentations from third party advisers. Third party assurance on IG’s Operational Product Governance Risk scenario analysis and modelling was also received in November 2022  Reviewed Compliance’s annual Product Governance Update in November 2022, which  Recommended the ICARA and Wind Down Plan for Board approval in November 2022 included a new section on Consumer Duty and its link to Product Governance Operational and Technology Risk Other Compliance Matters  Reviewed periodic updates on Operational Risk, in September 2022 and March 2023,  Reviewed reporting on Conflicts Management in September 2022 and March 2023, which included an analysis of operational risk data to identify high risk areas within which included updates on the Group-wide Conflicts Management Framework the Group, deep dives into top five risks, and a holistic summary of operational risk  Reviewed management’s annual compliance assessment of material breaches in events data November 2022  Considered management’s annual Operational and Technology Risk Framework Review  Recommended management’s action plan in response to the FCA’s 'Dear CEO' Letter to in January 2023, which incorporated external benchmarking data all firms in its CFD portfolio to the relevant regulated UK Boards in January 2023 Other Risk Matters  Received a Key Global Regulatory Update in March 2023  Considered a report on Model Risk in November 2022  Received a Transaction Reporting Update in March 2023, given the volume of  Reviewed an update from Management on Conduct Risk matters in March 2023 and an transactions we report annual report on Remuneration Risks in May 2023  Approved changes to the Compliance Framework in March 2023  Received a report from the CRO on Risk and Compliance Resourcing in May 2023  Recommended the FY24 Compliance Monitoring Programme to UK regulated entity Effectiveness of Risk Management Framework and Systems of Internal Controls Boards in March 2023  Reviewed the CRO’s annual assessment of the effectiveness of the Risk Management Framework and Systems of Internal Control for recommendation to the Audit Committee in May 2023 Shareholder and ### 88 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information Board Risk Committee Reportcontinued Committee Evaluation Main activities during the financial year (continued) Following this year’s Committee performance ### Priorities for the year ahead evaluation, I am pleased to report that we had Operational Resilience very positive results. The evaluation was in line  Address any actions that may arise  Received periodic reporting in September 2022 and March 2023 on progress towards with the Committee’s Terms of Reference, as from the SREP the milestones established in response to the FCA’s Operational Resilience Policy in the part of the external Board Evaluation exercise UK and management’s preparations for the Digital Operational Resilience Act (DORA)  Consumer Duty implications in the UK facilitated by Better Boards, who are an in Europe and beyond independent consultancy. You can find details Culture of the process, outcome and the actions on  Further integration of the tasty  Reviewed Culture Risk Dashboard reporting covering client, IT, regulatory and people pages 72–73. business into risk management, outcomes and conduct more broadly, and the progress being made to attain the internal control systems, and into aspired culture across the business in July 2022 and January 2023 Riskand Compliance reporting Insurance  Environmental risks, including  Reviewed the adequacy of our Global Insurance Programme in November 2022 and climaterisks January 2023 for recommendation to the Board Jonathan Moulds Chair of the Board Risk Committee 19 July 2023 Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 89IG GROUP HOLDINGS PLC Annual Report 2023 Company Information ### Directors’ Remuneration Report and Policy Contents Page Members  Five independent Non-Executive Directors Chair’s overview 89 FY23 key focus areas make up our Remuneration Committee. Remuneration at a glance 95  Helen Stevenson Their biographies can be found on pages Chair of the Committee  Review of the Directors’ 2023 Directors’ Remuneration 58–61 Remuneration Policy, to better Policy (proposed) 96–104  Andrew Didham  The Remuneration Committee met nine support the delivery of our long-term Committee member times during the year, including four ad hoc Annual Report on Remuneration 10 5 –118 diversification strategy, including meetings to discuss the Directors’ engaging with shareholders  Jonathan Moulds Remuneration Policy. You can find full Chair’s Overview Committee member  Consideration of Company Share details of attendance at Committee ### Plans including the introduction of a I am pleased to present the  Mike McTighe meetings on the table on page 64 new, global all-employee share plan ### Committee member Directors’ Remuneration  The CEO attends the Committee meetings ###  Review of employee pay Report for the year to  Sally-Ann Hibberd by invitation. The Company Chair is a arrangements in light of the ongoing Committee member member of the Committee although the ### 31 May 2023. This report cost of living challenges Company Chair and CEO do not attend or ### includes our new Directors’ take part when matters relating to their  Finalisation of the implementation of ### own remuneration are discussed. The CPO, Remuneration Policy (Policy), changes to remuneration Head of Reward, CLGO, and arrangements following the ### details of remuneration representatives from other areas of the implementation of the IFD/IFPR ### business, including from Risk and arrangements in respect of Compliance, attend the Committee ### the year to 31 May 2023 and meetings by invitation as appropriate to the ### matter under consideration. Deloitte are a summary of how we intend independent advisers to the Committee ### to apply the Policy during ### the year to 31 May 2024. IG has made excellent progress in terms of our performance this financial year, delivering a fourth consecutive year of record revenues and continuing to make good progress on the Company’s strategy of diversification. The market backdrop was very different than in recent years, with volatility returning to what seems to be more ‘business as usual’, and interest rates and inflation both rising significantly over the past 12 months. Our client base of active traders have continued to Helen Stevenson trade across our product offering, throughout Chair of the Remuneration Committee all market conditions. Shareholder and ### 90 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information Directors’ Remuneration Report and Policycontinued | On top of this, IG has been able to pivot | Remuneration Policy, which we will be | Role of the Committee | | --- | --- | --- | | certain areas of the business to take | submitting to shareholders for approval at the | The Committee’s principal responsibilities are to: | | advantage of the rising interest rates | 2023 AGM. The focus on the review has been | |  Make recommendations to the Board on our Senior Executive Remuneration Policy environment, attracting larger client balances on ensuring the Policy, in particularly variable to our platforms. Our overall strategy remains incentives, supports the delivery of our  Determine an overall remuneration package for the Executive Directors in order to attract unchanged, but our agility as a business long-term diversification strategy, and that it and retain high-quality Directors capable of achieving our objectives allows us to take advantage of opportunities appropriately incentivises Executive Directors  Set and agree with the Board a competitive and transparent remuneration framework which when they arise. to deliver enhanced performance. We have is aligned to our strategy and is in the interests of both the Company and its shareholders consulted extensively with shareholders in On a Group level, total active clients were this process and I am grateful for their time  Determine the contractual terms, remuneration and other benefits for the Executive slightly down, as acquisition became more and engagement. Directors, Chair and senior management – including the Company Secretary challenging in a high inflation environment. Our priority areas for diversification delivered The Committee has continued to monitor our  Determine and review our Remuneration Policy, ensuring it is consistent with effective excellent revenue growth. tastytrade was able approach to employee remuneration, risk management, and consider the implications of this Remuneration Policy for risk and to take advantage of rising interest rates, especially in light of the political, economic risk management generating significant interest income in the and social difficulties our people may have  Determine and agree the policy for the remuneration of the Company Chair and the year. tastytrade also launched their first major experienced over the past 12 months. The Executive Directors brand campaign, delivering strong web Committee continues to believe our traffic, search interest and improved brand employee remuneration is appropriate. More  Review pay, benefits and employment conditions and the remuneration trends awareness. Our US OTC business grew details about how the Committee has strongly, gaining significant market share and considered remunerating the wider  Approve the structure of share-based awards under our employee incentive schemes, Spectrum also delivered a record workforce is included below. to determine each year whether awards will be made and, if awards are made, to monitor performance, whilst onboarding additional their operation, the size of such awards and the performance targets to be used The Committee continues to work proactively third-party brokers and issuers to support and collaboratively with the other Board  Ensure that contractual terms on termination, and any payments made, are fair to the future growth. It’s within this context that the Committees, with each Committee Chair individual and the Group, that failure is not rewarded and that the duty to mitigate loss Committee has reviewed and assessed being a member of the Remuneration is fully recognised Remuneration-related matters. Committee, to allow oversight and  Receive and review reports annually directly from the risk management function on the This is my third year as Committee Chair, and integration. In addition, the Chief Risk Officer implications of our Remuneration Policy for risk and risk management my goal continues to be to ensure that is requested to provide, at least, quarterly remuneration supports, and is in alignment updates to the Committee. Following each  Monitor relevant regulatory developments, including those affecting UK-listed companies with, IG’s evolving business strategy and Committee meeting, I provide a and financial services firms, to ensure the Company’s Remuneration Policy and its operation organisational structure. One of the primary comprehensive update to the Board, in which is consistent with these points of focus for the Committee this year I describe the proceedings of the Committee  Establish the selection criteria, appoint and set the Terms of Reference for any remuneration has been to review and revise the Directors’ meeting and make recommendations to the consultants who advise the Committee Board as appropriate. This also ensure that each of the non-Committee members are The Terms of Reference of the Committee were last reviewed in May 2023 and are available on kept up to date on key remuneration matters. our website. Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 91IG GROUP HOLDINGS PLC Annual Report 2023 Company Information Directors’ Remuneration Report and Policycontinued | Main activities during the financial year | Incentive outcomes for FY23 | toachieving itsfemale representation target. | | --- | --- | --- | | During the year, the Committee’s key | The SPP for the 2023 financial year operated | In terms of client-focused initiatives, our | | activitiesincluded: | in line with the Policy. The SPP award FY23 | customer satisfaction metrics have shown | | | was based on three metrics: adjusted | positive direction of travel (particularly NPS), |  Reviewing the Directors’ Remuneration earnings per share (EPS) (55% weighting), with strong progress made on initiatives Policy to ensure it betters supports the relative Total Shareholder Return (TSR) (25% surrounding customer retention and diversification strategy, receiving feedback weighting) and non-financial measures (20% conversion. From a social and environmental from investors, and incorporating weighting). Adjusted EPS performance for perspective, the Group maintained its stakeholder views into the Policy being put FY23 was 94.7 pence, which was between carbon neutral status, continued to improve to shareholders for approval at the target and maximum vesting and our TSR over accuracy of reporting on emissions and met upcoming AGM | | the period 1 June 2020 to 31 May 2023 was | internal delivery targets for our accessibility | | --- | --- | --- | |  Reviewing the Directors’ Remuneration | just above median compared to the FTSE 250 | and vulnerable client initiatives. Overall, the | | Report published in the FY22 Annual | (excluding investment trusts). | Committee is of the view the non-financial | | Report and Accounts | | performance over the year has been excellent | Non-financial performance during the and, after careful assessment of measurable  Reviewing the fee for the Company Chair year was measured and assessed against outcomes, the Committee judged that non- and Executive Directors’ remuneration for agreed targets which comprise measurable financial performance was 96% of maximum. FY24 performance of strategic projects and initiatives that drive our longer-term Based on the above, the outcome of the SPP  Reviewing performance against targets for diversification and strategic direction, the award for FY23 was calculated at 73.55% of the FY22 Sustained Performance Plan development and conduct of our people, maximum. The Committee considered that (SPP) award, the vesting of long-term client-focused initiatives, and key ESG this outcome is reflective of overall business incentive plan awards and for the measures. IG takes its responsibilities performance over the period and no determination of the bonus pool | | around ESG matters very seriously and | discretion has been applied to the formulaic | | --- | --- | --- | |  Reviewing the remuneration and bonus | considers ESG to be an investment in its | outcome. This award will be granted following | | awards, including for senior management | intangible assets which are critical to its long | the announcement of results for the year and | | | term sustainability. Rather than have ESG | will be 30% in cash at that point, 20% in share |  Reviewing the proposed targets for the as a standalone component, the key ESG options released in July 2026, and 50% in FY23 SPP, including agreeing the non- KPIs are integrated into the non-financial share options released in July 2027. financial metrics performance component of reward. Over the year, the Group made very strong  Reviewing remuneration-related risks, progress in implementing its strategic plans remuneration of Material Risk Takers and across the individual parts of the business gender pay gap reporting (including excellent progress surrounding  Reviewing developments in market tastytrade). Employee engagement scores practice and corporate governance increased versus FY22 and remain well relating to remuneration above our external benchmark, with the Group also continuing its strong progress  Reviewing of Company Share Plans Shareholder and ### 92 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information Directors’ Remuneration Report and Policycontinued | Directors’ Remuneration Policy review | the majority of our business remains driven by | Changes to the SPP | | period). It is also proposed that the | | --- | --- | --- | --- | --- | | In line with the normal three-year cycle in the | our Core Markets+ segment (businesses in | As part of the review, the Committee | | weighting on TSR will be increased to 30% | | UK, our Policy will be subject to shareholder | which IG is well established, including our OTC | considered whether any modifications should | | (from 25% currently), in order to increase | | vote at the 2023 AGM. In advance of this, the | derivatives businesses outside of the US and | be made to the operation of the SPP in order | | the focus of the SPP on long-term | | Committee has spent significant time | Japan). By diversifying our revenue streams by | to further support the delivery of our long- | | performance and to further incentivise the | | reviewing the Policy and its implementation, | geography and product we aim to promote | term diversification strategy and the creation | | creation of shareholder value. | | to ensure it supports the delivery of our | further long-term growth as well as mitigating | of sustainable, long-term shareholder value. | | | | long-term diversification strategy, that it | the regulatory risk exposure of the Group by | The outcome of this review is that the | | In order to manage the transition between | | appropriately incentivises Executive Directors | reducing the dependence on an individual | following changes are proposed to the SPP | | the current approach and the proposed | | to deliver enhanced performance whilst | product or region. | from FY24 onwards: | | approach to ensure that performance in | | having regard to views of shareholders and | | | | interim years is fairly and proportionately | | | The SPP was originally introduced in 2013, | |  Alignment of TSR with market practice | | | other stakeholders and ensuring consistency | | | | rewarded, for FY24 only we plan to split the | | | and then updated in order to comply with the | | and increase in the weighting on TSR | | | and compliance with the Company’s risk | | | | assessment of TSR performance such that | | | UK Corporate Governance Code in 2020 as | | Currently TSR performance is assessed at | | | management policies. The focus of the review | | | | half (15% of the overall award) is assessed | | | part of that policy review. In this current | | the end of the plan year by using a trailing | | | has been on the variable incentives, with the | | | | on the current basis (i.e. trailing basis | | | review of our Director’s Remuneration Policy, | | three year basis (i.e. the three-year period | | | rest of the Policy, in the view of the | | | | looking at FY22 to FY24) and the remaining | | | the Committee again carefully considered | | ending at the conclusion of the plan year) | | | Committee, remaining fit for purpose. | | | | award (15% of the overall award) is | | | whether the SPP continues to be to | | relative to the FTSE 250 (excluding | | assessed incorporating future years IG launched its strategy in May 2019 with the appropriate to support the execution of our investment trusts). Going forwards, it is (i.e.FY24 to FY26). For FY25 onwards, aim of expanding and diversifying the revenue evolving strategy or whether an alternative proposed that we move to assess TSR TSRwillbe assessed using the new base of the Company to enable growth in new structure would be more appropriate. We based on future performance, in line with approach oflooking at future years only markets and drive long-term shareholder have also given careful consideration to the market practice, such that the period for asoutlinedabove value. This is to be achieved by growing key retentive power of the plan, as that is an measurement incorporates the three-year geographies, particularly the US and Japan important objective, as well as the period commencing at the start of the plan  Introduction of a revenue and by expanding into retail trading markets competitiveness of the arrangements, as we year. Performance will be assessed based diversificationmetric adjacent to our ‘flagship’ OTC derivatives compete for the best talent in the market to on the performance in the plan year and To further support the delivery of the business, primarily exchange-traded lead the Company. the two years after the plan year, Group strategy, it is proposed that a derivatives and stock trading and investments. effectively introducing a long-term award ‘revenue diversification’ metric will be Given where we are in the evolution of the In terms of the former, the US represents the component to the SPP. The Committee included as part of the SPP, with a 20% business, with the majority of the Group’s single biggest market opportunity for the believe that the switch to a more weighting. This metric will provide a direct revenue continuing to be exposed to market Group and Japan still has room to expand, in conventional, future years, approach to incentive for management to grow volatility, target setting remains a challenge as addition to the significant growth we’ve TSR places greater emphasis on the revenues beyond our traditional revenue it does for all our competitor peer set. already achieved in the earlier phase of the delivery of the diversification strategy over base. Increasing the proportion of our Consequently, the Committee believes that strategy. The targeted product markets play future years and also aligns management business from new geographies and the overall framework on the SPP continues to to the traditional strengths of the Group in with the future shareholder experience, products will give the Group exposure to a be appropriate for the business. The SPP is a technology, trading and trading products, and better rewarding participants for their wider range of revenue drivers and profit simple structure, which supports dynamic risk management. The Group is making actions in changing the shape of the pools, which will facilitate the creation of target setting in volatile markets, it creates steady progress against the strategy, business. In order to fully align participants long-term, sustainable shareholder value. alignment with shareholders through a including the delivery of the Significant with the shareholder experience over the The diversification of the Group will, of significant interest in shares, incentivises Opportunities programme (a year ahead of three-year performance period, the course, continue to be aligned with the executives to deliver progress against schedule in 2021) and the acquisition of element of the award subject to TSR Group’s long-term strategic plan agreed by strategic milestones and to deliver annual tastytrade in June 2021. Whilst we continue to performance (which is delivered fully in the Board. The following revenue streams, profit performance. make progress on implementing this strategy, shares) will be granted at the start of the which represent significant strategic plan year (i.e. the start of the performance growth opportunities for the Group, Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 93IG GROUP HOLDINGS PLC Annual Report 2023 Company Information Directors’ Remuneration Report and Policycontinued | will be included when setting the annual | The overall payout profile of the | The overall result of these changes is that | Consideration of shareholder views | | --- | --- | --- | --- | | target forFY24: | scheme (i.e. when awards are released | awards are released to participants on the | As part of its review of the Remuneration | | | to participants) remains unchanged | same basis as under the current model. The | Policy, over the course of the last year, the | — IG’s US business (all products) from the current approach: following illustrates the revised operation Committee Chair has engaged extensively — IG’s Japanese business (all products) of the SPP (opportunity levels are based on with our largest shareholders in order to  30% released in cash following the the CEO’s award level of 500% of salary). explain the changes proposed, and the — Non-OTC revenue streams in all planyear; rationale behind them. Overall, the othergeographies | |  20% in shares after year 4 (subject to an | Committee Chair contacted approximately | | --- | --- | --- | | The revenue diversification metric will be set | additional six-month retention period in | 55% of the IG shareholder base, as well as | | annually in the context of the Board-approved | line with the regulatory requirements | proxy advisers. We highly value the inputs and | | four-year plan and will be set as an absolute | under the IFPR); and | views of all shareholders and took all | | £m target not a proportion of overall Group | | feedback into account when reviewing and |  50% in shares after year 5 revenue. Revenue streams included within the considering our final proposal. I would metric will be reviewed every year to ensure To ensure that the payout profile remains personally like to thank all stakeholders who that they remain appropriate and that the consistent with the current model, given the engaged with us and provided feedback. most relevant business units for diversification modification of the TSR metric to be more are targeted. aligned to market practice, we are proposing Summary proposed SPP structure and payout profile minor changes to balance between vesting The revenue diversification metric will and holding periods with a portion of the include an underpin to provide additional award that previously vested five years from safeguards to ensure that revenue growth | | | | the start of the plan year now vesting after | | Revenue | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | in these areas is sustainable and not at the | | | | | | | Cash | | | | | | three from the start of the plan year, subject | | diversification | | | 150% of salary | | expense of long-term profit margins or | | | | | | (30% overall) | | | | | Y1 Y2 | Y3 | Y4 | Y5 | (20%) | | | | to a two-year holding period. Performance will earnings. As part of its assessment of the continue to be assessed annually (Adjusted formulaic outcome following year end, the EPS, revenue diversification and non-financial Committee will consider performance in metrics). Based on performance against EPS Shares after year 4 (20% overall) 100% of salary a number of additional metrics in order to (30%) + 6 month retention period these metrics, 30% of the overall award will satisfy itself that revenue growth in these payout in cash following the end of the annual 350% of salary areas has been sustainable and in the long- performance period. 20% of the overall award term interests of shareholders. Based on will be delivered in shares vesting after year 4 Annual award component Non-financial Shares after year 3 2 year holding period 100% of salary this assessment, the Committee will retain (these shares are also subject to a six-month (20%) (20% overall) until end of year 5 discretion to modify the formulaic outcome retention period in line with the regulatory if considered appropriate. Additionally, requirements of the IFPR), with 20% delivered the current focus is on organic growth, in shares which vest after three years and however, should any M&A occur which was are subject to a further two-year holding not included when targets were set, then period (and are therefore released after year | | | | Future years TSR – performance period – | 2 year holding period | | | --- | --- | --- | --- | --- | --- | | targets will be adjusted appropriately. | | | | | 150% of salary | | | 5). The portion of the award subject to TSR | | shares vesting after year 3 (30% overall award) | until end of year 5 | | | The performance metrics for the FY24 | (30% of the overall award) vests after three | component | | | | 150% of salary award are therefore: 30% Relative TSR, years based on TSR performance and is also Long-term award (measured on both a trailing basis and subject to a further two-year holding period. with reference to future years), 30% 20% released Adjusted EPS, 20% revenue diversification; and 20% non-financial measures. Based on current CEO SPP award level of 500% of salary Annual award component shares granted Long-term award component shares granted Shareholder and ### 94 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information Directors’ Remuneration Report and Policycontinued | The Committee was pleased with the level of | The impact of the continued elevation in the | respect of regulatory, risk management and | | | | --- | --- | --- | --- | --- | | engagement by investors, who were generally | cost of living was also discussed with the | tax advice, Internal Audit services, agreed- | Priorities for the year ahead | | | supportive of the proposed changes to the | People Forum as well as the actions that the | upon procedures-based assurance services | | | | Policy, recognising that the SPP remains an | Company is taking to support employees with | and Financial Reporting and Controls advice. | |  Continue to engage with investors on | | appropriate structure for IG over the next | this. At the end of FY23 the Company took | | | the Remuneration Policy, as needed, | It is the view of the Committee that the three years. The Committee took on board the exceptional step to provide a one-off ahead of the 2023 AGM engagement team at Deloitte that provided the feedback provided by shareholders booster payment to junior staff with a lower remuneration advice to the Committee during  Provide non Remuneration during the consultation and iterated the payment to managers (with no senior the year do not have connections with the Committee Board members with a proposal in response. managers or executives benefiting from this) Group or its Directors that may impair their deep-dive on relevant remuneration in those countries with higher levels of independence. The Committee reviewed the matters, including the different inflation, with around 78% of employees Salaries for FY24 potential for conflicts of interest and judged approaches to quantum and design across the group receiving a payment. Salaries for the Executive Directors for 2023 that there were appropriate safeguards of remuneration, market trends and Thesize of the booster payment varied by will be increased by 4.5% – this is below the against such conflicts. The Committee non-financial metrics location, but eligible employees in the UK | 6.2% average increase awarded to the wider | | considers that the advice received from the | | | --- | --- | --- | --- | | | received payments of up to £1,500. | |  Continue to monitor workforce pay, | | IG UK workforce. The new salaries for June | | advisers is independent, straightforward, | | taking into account market and Felix (CEO), Charlie Rozes (CFO) and Jon Noble relevant and appropriate, and that it has an socioeconomic conditions (COO), which apply from 1 June 2023, are Advice to the Committee appropriate level of access to them and has £661.5k, £531.5k and £441.5k, respectively. During FY23, the Committee consulted the confidence in their advice. CEO about remuneration matters relating to individuals other than herself. The CPO, Head Wider workforce remuneration Committee Evaluation of Reward, CLGO and Committee Secretary The Committee considers wider colleague An evaluation of Committee performance also provide advice and support to the Chair pay as context for the decisions it makes, was undertaken this year in line with the and the Committee as needed. | and ensures it is kept updated through the | | Committee’s Terms of Reference, as part of | | --- | --- | --- | | year on general employment conditions, | External advisers attend Committee meetings | the external Board Evaluation exercise | | basic salary increase budgets (with particular | at the invitation of the Committee Chair. | facilitated by Better Boards. I am pleased to | | focus on this in FY24 in the context of | | report that the results for the Committee | The Remuneration Committee appointed continued high inflation and increases in the were very positive, and details of the process, Deloitte LLP (Deloitte) as advisers to the cost of living), the level of bonus pools and outcome and the actions can be found on Committee in April 2019, following a payouts and participation in share plans. pages 72–73. competitive tender process. When considering salary increases for Deloitte’s fees for advice provided to the Directors, the Committee takes into account Conclusion Committee during the financial year ending pay and employment conditions across The Committee is satisfied that our outcomes 31 May 2023 were £185,250 (excluding VAT). the wider workforce. The Company has a for FY23 are aligned with the interests of Fees are charged on a time and material basis. People Forum which is attended by one shareholders, that they reflect our strong of the Committee members as well as performance over this year and that the Policy Deloitte are founding members of the employee representatives from across the has operated as intended. I look forward to Remuneration Consulting Group and are business, and which discusses pay as well receiving your support for the Directors’ signatories to its Code of Conduct, which as other matters which affect employees. Remuneration Report and Directors’ Helen Stevenson requires its advice to be objective and Remuneration Policy at the AGM on Chair of the Remuneration Committee impartial. During the year, Deloitte also 20 September 2023. 19 July 2023 provided unrelated advisory services in Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 95IG GROUP HOLDINGS PLC Annual Report 2023 Company Information ### Remuneration at a glance Remuneration in FY23 ### IG has made excellent progress in terms of our performance Total remuneration (£000) ### this financial year, continuing to deliver on our strategy. ### Thiscontinued progress is reflected in pay outcomes. Total | The following section shows a summary of the performance measures we use, and the Total | £2,066 resulting pay for Executive Directors. Total | £1,717 FY23 SPP outcome Threshold Maximum Adjusted EPS: 0% | | payout, TSR: 25% | | | Contribution to | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Metric Weighting | | payout 100% payout | Outcome | | SPP vesting | | | | | | Adjusted EPS 55% 76.7p 98.0p 87.0 0 % 47. 85% | | | | | | Payout profile for CEO for FY23 | | | | | | | Actual | | | | | y-2 y-1 y1 | y2 y3 | y4 y5 | 94.7p Cash (30%) th TSR (trailing basis 25% Actual: 50 25.90% 6.50% EPS (55%) FY20–FY23) percentile Shares after year 4 (20%) + 6 months retention period Upper quartile Non-financial Median ranking ranking (20%) Shares after year 5 (50%) SPP 500% of salary | Non-financial | | | | | Trailing basis TSR (25%) | | | --- | --- | --- | --- | --- | --- | --- | | Details of performance | 20% Actual: | | 96.00% 19.20% | | | | | are set out on page 112 | | 96.00% | | Based on CEO SPP award level of 500% of salary | | Shares granted | | | | 0.00% 100.00% | | For structure and payout profile of CEO under the proposed new directors remuneration policy see page 93 | | | Total 100.00% 73.55% SPP outcome Delivered in cash Deferred into Maximum opportunity (30%) shares (70%)% of maximum % of salary June Felix 500% of salary 73.55% 368% £698,000 £1,630,000 Charlie Rozes 400% of salary 73.55% 294% £449,000 £1,047,000 Jon Noble 400% of salary 73.55% 294% £373,000 £870,000 June Felix £3,055 Charlie Rozes Jon Noble Salary Pension and benefits SPP Shareholder and ### 96 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information ### FY23 Directors’ Remuneration Policy FY23 Directors’ Remuneration Policy The key principles are supported by a number of underpinning principles as follows: The Directors’ Remuneration Policy describes the framework, principles and structures that guide the Remuneration Committee’s decision-making process in relation to Directors’ Simplicity of Encourages the right Supports Supports retention Supports succession Appropriate in the approach to support culture and appropriate risk of IG’s key talent planning including context of reward for remuneration arrangements. During the year, the Committee has undertaken an extensive understanding from behaviours in line management the ability to hire IG’s wider workforce review of the Directors’ Remuneration Policy to ensure that it better supports the delivery of all stakeholders with IG’s values globally our long-term diversification strategy and the generation of long-term sustained shareholder Alignment with IG’s purpose, values and drivers value. As outlined in more detail in the Chair’s letter, following the review, two key changes have been made to the operation of the Sustained Performance Plan (SPP): (1) the introduction of a The Policy has been designed taking into account the principles of Provision 40 of the UK long-term award component to better align management with future shareholder value Corporate Governance Code (the Code). The Committee believes that we meet these creation; and (2) the introduction of a revenue diversification measure into the SPP to principles as summarised below: incentivise the delivery of growth from new markets. Remuneration Policy Principles Clarity We provide open and transparent disclosures regarding our executive The Remuneration Policy is set to ensure that remuneration is sufficiently competitive to attract remuneration arrangements. 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 Our Remuneration Policy is designed to recognise and reward the organisation. As part of the Policy review the Committee reviewed and updated the key performance that supports the execution of our diversification principles of the Policy as follows: strategy and helps drive sustainable shareholder value growth. Simplicity Our Remuneration Policy is designed to be straightforward, easy for Drives long-term Drives the long-term diversification and strategic direction of the shareholders and employees to understand, and simple for the Group diversification and organisation and delivery of our purpose to power the pursuit of to monitor. strategic direction financial freedom for the ambitious. Predictability Our Remuneration Policy contains details of the maximum opportunity Supports sustainable Supports the sustainable long-term growth of the business by levels for each component of pay. Actual incentive outcomes vary long-term growth incentivising sustained improvements in performance. depending on the level of the performance achieved against specific measures. Payouts correlate Strong correlation between payouts and both the financial and with Group non-financial performance of the Group. Proportionality, We believe the Remuneration Policy is consistent with regulatory and performance risk and alignment corporate governance requirements. It is also designed to achieve to culture effective risk management through the choice of performance Aligns with the Aligns participants to the long-term shareholder experience. measures and targets, shareholding requirements and malus and shareholder clawback provisions. experience Competitive package The overall package opportunity and the balance of fixed and variable to support pay is appropriate for IG, enabling the Group to recruit and retain talent recruitment and on a global basis. retention Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 97IG GROUP HOLDINGS PLC Annual Report 2023 Company Information FY23 Directors’ Remuneration Policycontinued Remuneration Policy Table The table below summarises each element of the Remuneration Policy for the Executive Directors, explaining how each element operates and how each part links to the corporate strategy. Key elements of remuneration | Base Salary | | Pensions and Benefits | | | --- | --- | --- | --- | | To recruit and retain key employees of an appropriate calibre to deliver the strategic objectives | | Competitive, cost-effective flexible pension and benefits allowance to help recruit and retain Executive | | | of the Company. | | Directors. | | | Operation | Opportunity | Operation | Opportunity | | Base salaries are normally reviewed by the | Whilst there is no maximum salary, increases | Executive Directors are eligible to participate in the | The maximum pension and benefits allowance for | | Committee annually, with salary increases normally | will normally be in line with or lower than the | Company’s flexible pension and benefits plan, from | Executive Directors will be in line with the allowance | | effective from 1 June. | typical increases awarded to other employees | which Executive Directors can receive a range of | available to the wider workforce in the UK. This rate | | | in the Group. | benefits, Company pension contribution or cash | is currently 12% of salary. | Base salaries are set taking into account: allowance. However, increases may be above this level in Where the Committee has determined that it is  Scale, scope and responsibility of the role certain circumstances such as: Benefits can include critical illness cover, dental appropriate to provide additional benefits  Experience of the individual and their cover, health assessments, income protection (including in connection with the relocation of an  Where an Executive Director has been performance cover, life assurance, travel insurance and private Executive Director), benefits may be provided appointed to the Board at a lower than typical medical cover above this level. The Committee will set the level of  Pay and workforce policies elsewhere in market salary to allow for growth in the role, benefit at an appropriate level taking into account the Group larger increases may be awarded to move salary Executive Directors may participate in a Share individual circumstances and the policy in place for positioning closer to typical market level as the Incentive Plan (SIP) or Savings Related Share Option other employees.  Business performance and prevailing market Executive Director gains experience Scheme (SAYE) or any other all-employee plans on conditions the same basis as other employees up to HMRC Where an Executive Director is located outside  Where an Executive Director has been approved limits or relevant plan limits. of the UK the pension and benefits provision  Salary levels at other companies of a similar promoted or has had a change in responsibilities may be aligned with practice for the wider size, complexity, geographic spread and The Committee may introduce other benefits if it is  Where there has been a significant change in workforce locally. business focus considered appropriate to do so. market practice Executive Directors may participate in a SIP, SAYE Where appropriate, the Company may provide  Where there has been a significant change in or other all-employee plan up to the same support to Executive Directors in the preparation of the size and/or complexity of the organisation maximum as other employees. their tax returns.  In other exceptional circumstances Performance metrics Executive Directors shall be reimbursed for all None Performance metrics reasonable expenses and the Company may settle None any tax incurred. Where an Executive Director is required to relocate, the appropriate one-off or ongoing benefits may be provided (e.g. housing, schooling etc.) Shareholder and ### 98 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information FY23 Directors’ Remuneration Policycontinued Sustained Performance Plan Share ownership policy The SPP provides a single incentive plan for Executive Directors. It provides a simple and competitive incentive mechanism that encourages and rewards both This aligns the interests of management and annual and sustained long-term performance, linked to the Company’s strategic objectives. A significant portion of the SPP award is in shares, encouraging shareholders both in and post-employment and Executive Directors to build up a substantial stake in the Company, thereby aligning the interests of management with shareholders. promotes a long-term approach to performance and risk management. | Operation | Long-term award component | Opportunity | | | --- | --- | --- | --- | | For FY24 onwards, awards under the SPP will | The long-term award component will normally be | The maximum plan contribution in respect of a plan | Operation | | normally comprise two components: (1) the annual | 30% of the overall opportunity under the SPP but | year is 500% of salary for the CEO and 400% of | Executive Directors are expected to build a holding | | award component; and (2) the long-term award | may be a different proportion if determined by | salary for other Executive Directors. | of shares to the value of a minimum of 200% of | | component. | theCommittee. | | base salary. | Performance metrics | Annual award component | For the long-term award component, awards are | Awards under the annual award component | It is normally expected that the shareholding | | --- | --- | --- | --- | | The annual award component will normally be 70% | normally made during the ‘plan year’. | are determined based on performance for the | guideline would be met within five years from the | | of the maximum award opportunity under the SPP | | plan year. | date of appointment (unless exceptional | For the long-term award component, performance but may be a different proportion if determined by circumstances apply). will normally be assessed over three financial years Awards under the long-term award component are the Committee. starting with the ‘plan year’. The long-term award normally based on performance over a three-year The Committee will review progress annually, with For the annual award component, awards are component will usually vest following the end of the period starting with the plan year. an expectation that Executive Directors will make normally made after the announcement of results third financial year that follows the start of the plan progress towards achieving the shareholding policy Performance measures may comprise, for example, relating to each ‘plan year’ (i.e. the year over which year subject to the extent to which the each year. earnings per share (EPS) targets, revenue for the annual performance is assessed). performance criteria is met, following which it will Group or a part of the Group, Total Shareholder Following ceasing to be an Executive Director, normally be subject to a holding period and be The annual award component will normally payout Return (TSR) and strategic non-financial measures. Executive Directors will normally be expected to released to participants following the end of the as set out below but the Committee may determine The Committee may vary performance measures maintain a minimum shareholding of 200% of fifth financial year that follows the start of the that a different proportion may apply: from year to year in accordance with strategic salary (or actual shareholding if lower) for two planyear. priorities and the regulatory environment. years. This guideline applies to shares that are  42.86% of the annual award component earned The Remuneration Committee retains discretion to released from the SPP on or after 17 September will be delivered in cash shortly following the TSR performance will normally be measured scale back the vesting of awards if the underlying 2020. Any shares purchased by the Executive end of the plan year. This element may be up to against the performance of a suitable performance of the participant and/or the Group Directors will not be subject to the guideline. | 30% of the maximum SPP award | | comparatorgroup. | | | --- | --- | --- | --- | | | does not justify the payout of the award. | | The Committee retains discretion to waive this | |  28.57% of the annual award component amount | | No more than 25% of the award will normally be | guideline if it is not considered to be appropriate | The Committee may determine that a different earned will be awarded in shares which will vest payable for threshold levels of performance. in the specific circumstances. payout schedule should apply for future plan years. and be released to participants following the The Committee may, in its discretion, adjust SPP end of the fourth financial year that follows the Shares may be awarded either in the form of par awards, if it considers that the outcome does not start of the plan year. This element may be up to value options, nil cost options or conditional reflect the underlying financial or non-financial 20% of the maximum SPP award. A post-vesting awards. Shares awards in respect to financial years performance of the participant and/or the Group retention period of six months would normally which precede FY24 will continue to payout in over the relevant period or that such vesting level is be applied to comply with regulations accordance with the terms of their award and not appropriate in the context of circumstances theprovisions of the policy that was in force  28.57% of the annual award component amount that were unexpected or unforeseen when the at the time. earned will be awarded in shares which will vest targets were set. When making this judgement the following the end of the third financial year that Recovery provisions apply, see below for Committee may take into account such factors as follows the start of the plan year, following furtherdetails. the Committee considers relevant. which it will be subject to a holding period and In order to support a fair and smooth transition be released to participants following the end of between the existing SPP structure and the revised the fifth financial year that follows the start of structure, a modified approach will operate for the plan year. This element may be up to 20% of FY24 as outlined on page 99. the maximum SPP award Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 99IG GROUP HOLDINGS PLC Annual Report 2023 Company Information FY23 Directors’ Remuneration Policycontinued Transition approach for FY24  The long-term award component will be Performance measures In order to support a fair and smooth transition 15% of the overall opportunity under For FY24 it is intended that the annual award component of the SPP awards will be based between the existing SPP structure and the theSPP on a combination of Adjusted EPS, revenue diversification and non-financial strategic and revised structure, a modified approach will operational performance measures for FY24 and TSR performance for the period 1 May 2021  Performance for the long-term award operate for FY24 as outlined below: to 31 May 2024. The long-term award component will be based on TSR performance for the component will be based on TSR period 1 June 2023 to 31 May 2026.  The annual award component will be 85% performance over the period 1 June 2023 of the maximum award opportunity under to 31 May 2026 Metrics Rationale and link to the strategic KPIs How performance measures are set the SPP | |  The long-term award component may vest | Total Shareholder Return | TSR measures the total | The Committee sets the | | --- | --- | --- | --- | --- | |  The annual award component will be based | following the end of the third financial year | (TSR) relative to an | return to IG Group’s | requirements for each plan | | on the assessment of Adjusted EPS, | that follows the start of the plan year | appropriate comparator | shareholders, both through | year. The current | | revenue diversification and non-financial | subject to the extent to which the | group. | share price growth and | benchmark group | | strategic measures for FY24 and TSR | performance criteria is met, following | | dividends paid, and as such | comprises the constituents | | performance for the period 1 June 2021 to | which it will be subject to a holding period | | it is aligned to shareholder | of the FTSE 250 Index | | 31 May 2024 | and be released to participants following | | interests. | (excluding investment | | | the end of the fifth financial year that | | | trusts). | |  The annual award component will payout | | | TSR is influenced by how | | follows the start of the plan year as follows: well IG Group performs on a Notes to the Policy table range of other metrics, — 35.29% of the annual award component Summary of decision making process and including financial indicators earned will be delivered in cash shortly changes to policy such as revenue, profit, cash following the end of the plan year. This The Policy has been updated to ensure that it generation and dividends, element may be up to 30% of the better supports the delivery of our long-term and non-financial indicators maximum SPP award | | diversification strategy and the generation of | | such as client satisfaction | | | --- | --- | --- | --- | --- | | — 23.53% of the annual award component | long-term sustained shareholder value. In | | and operational | | | amount earned will be awarded in | determining the new Remuneration Policy, | | performance. | | | shares which will vest and be released | the Committee followed a robust process | | | | | | | Adjusted Earnings per share | Adjusted EPS is a key | The Committee determines | | to participants following the end of the | which included discussions on the content | | | | | | | (EPS) | indicator of the profits | appropriate performance | | fourth financial year that follows the | of the Policy at Remuneration Committee | | | | | | | | generated for shareholders, | targets each year, taking | | start of the plan year. This element | meetings during the year. The Committee | | | | | | | | and a reflection of both | account of the annual and | | may be up to 20% of the maximum | considered the input from management and | | | | | | | | revenue growth and cost | longer-term business plans. | | SPP award | our independent advisers, as well as | | | | control. considering best practice and guidance from — 41.18% of the annual award component major shareholders and external proxy amount earned will be awarded in bodies. A detailed summary of the rationale shares which will vest following the end for the changes to the Policy and how these of the third financial year that follows will be implemented is provided as part of the the start of the plan year, following Chair’s statement. The key change from a which it will be subject to a holding Policy perspective is the introduction of a period and be released to participants long-term award component into the SPP following the end of the fifth financial to better align management with future year that follows the start of the plan shareholder value creation. Other changes year. This element may be up to 35% of have been made to the wording of the policy the maximum SPP award to increase flexibility, to aid operation, to increase transparency and to reflect typical market practice. Shareholder and ### 100 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information FY23 Directors’ Remuneration Policycontinued Metrics Rationale and link to the strategic KPIs How performance measures are set Recovery provisions  the Committee forms the view that the The Committee may decide within five years relevant individual is not considered to be Revenue diversification IG’s strategy is to diversify its The Committee determines of an award being paid/granted that malus fit and proper to perform their role; earnings model to allow appropriate performance and/or clawback will be applied to the more predictable and targets each year, taking  the relevant individual ceases to be a underlying awards. This may happen in the sustainable revenues to account of the annual and director or employee of a Group Member following circumstances: facilitate the creation of longer-term business plans. as a result of serious misconduct on the long-term shareholder  the Committee forms the view that the part of that individual; value. Company materially misstated its financial  an individual participated in or was results for whatever reason and that such This measure incentivises responsible for fraud or other conduct with misstatement resulted either directly or management to increase intent or severe negligence which resulted indirectly in that the award: (i) being revenue from growth in significant losses to the Group; granted over; and/or (ii) Vesting to a markets to support this greater degree than would have been  there is reasonable evidence of strategy. the case had that misstatement not misbehaviour or material error by the Non-financial strategic and operational performance schemes been made; individual (malus only); Non-financial strategic and Strategic metrics are Targets are set at the start of  the Committee forms the view that in  the Group, a member of the Group or any operational non-financial designed to support the the financial year based on assessing any condition set in connection relevant business unit suffers a material measures development and protection our strategic and with the award such assessment was downturn in its financial performance of the Group’s intangible operational objectives for based on an error, or on inaccurate or (malus only); assets, which are the the year. misleading information or assumptions and foundation of the  there are significant increases in the Following the end of the that such error, information or assumptions Company’s overarching Group, or member of the Group or year, the Committee resulted either directly or indirectly in that strategy and long-term business unit’s economic or regulatory assesses performance award (i) being granted; and/or (ii) Vesting growth plans. ESG measures capital base; relative to prior years, to a greater degree than would have been normally incorporated. internal targets and sector the case had that error not been made;  any regulatory sanctions e.g. punitive, Targets currently set in the averages. Assessment is administrative, disciplinary or otherwise,  the Committee forms the view that there areas of strategic enablers, undertaken ‘in the round’, where the conduct of the Participant has been substantial failure of risk people and culture and taking account of activities contributed to the sanction; or management; client experience. and achievements during the year.  any other event arises which the  the Committee forms the view that there Committee determines warrants the has been serious reputational damage to Annual financial, strategic and operational non-financial measures are considered to be relevant individual being subject to malus the Company, any Group Member or a commercially sensitive and are therefore not disclosed at the time of award. The intention is or clawback. relevant business unit; that targets will be disclosed retrospectively in FY24, provided that they are no longer  the Committee forms the view that there commercially sensitive. has been a material corporate failure in the Company, any Group Member or any business unit; Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 101IG GROUP HOLDINGS PLC Annual Report 2023 Company Information FY23 Directors’ Remuneration Policycontinued Share plan operations Remuneration policy across the Company Approved payments The Committee will operate the SPP in We have designed the remuneration policy The Committee reserves the right to make accordance with the Rules of the plan (a copy for the Executive Directors and senior any remuneration payments and/or payments of SPP rules is available on request from the management taking into account the policy for loss of office (including exercising any Company Secretary and will be available on for employees across the Company as a discretions available to it in connection with the National Storage Mechanism). Awards whole. The Committee is kept updated such payments), notwithstanding that they under the SPP plans may: through the year on general employment are not in line with the Policy set out above, conditions, basic salary-increase budgets, the where the terms of the payment were agreed:  Have any performance conditions level of bonus pools and payouts and (i) before the policy set out above came into applicable to them amended or substituted participation in share plans. effect, provided that the terms of the by the Committee in circumstances where payment were consistent with any applicable the Committee determines an amended or The Committee is therefore aware of how shareholder-approved Directors’ substituted performance condition would total remuneration at the Executive Director remuneration policy in force at the time they be more appropriate and not materially level compares to the total remuneration of were agreed or where otherwise approved by less difficult to satisfy the general population of employees. shareholders; or (ii) at a time when the Common approaches to remuneration policy  Incorporate the right to receive an amount relevant individual was not a Director of the which apply across the Company include: equal to the value of dividends which Company (or other person to whom the Policy would have been paid on the shares under  Consistency in ‘pay for performance’, set out above applies) and, in the opinion of an award that vests up to the time an award with annual bonus schemes being the Committee, the payment was not in vests and is delivered. This amount may be offered to the vast majority of employees. consideration for the individual becoming a calculated assuming that the dividends Senior employees also participate in Director of the Company or such other have been reinvested in the Company’s share-based plans person. For these purposes 'payments' shares on a cumulative basis includes the Committee satisfying awards of  Offering pension, medical, life assurance variable remuneration and, in relation to an  Be settled in cash at the Committee’s and other flexible benefits for all award over shares, the terms of the payment discretion. For Executive Directors, this employees, where practical given are 'agreed' no later than the time the award is provision will only be used in exceptional geographical location granted. This Policy applies equally to any circumstances such as where for  Ensuring that salary increases for each individual who is required to be treated as a regulatory reasons it is not possible to category of employee are considered, Director under the applicable regulations. settle awards in shares taking into account the overall rate of Legacy awards  Be adjusted in the event of any variation of increase across the Company, market data, The current SPP expires in 2023 and in the Company’s share capital or any and both Company and individual accordance with the termination provision demerger, delisting, special dividend or performance of the scheme rules, for awards granted in other event that may affect the Company’s  Encouraging broad-based share ownership respect of years up to and including the share price through the use of all-employee share financial year ending 31 May 2020 (plan years plans, where practical 1–7) 50% of the cumulative awards in the plan account will vest in July 2023, with a further 25% released in both July 2024 and July 2025. Shareholder and ### 102 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information FY23 Directors’ Remuneration Policycontinued Company, acting reasonably, believes it may have a right to terminate employment due to gross misconduct, it may suspend the Fixed pay SPP Share Price Growth Fixed pay SPP Share Price Growth Fixed pay SPP Share Price Growth Executive Director from employment on full k k k salary for up to 30 days to investigate the £3,465k | | £5,206k | | | | £2,879k | | | --- | --- | --- | --- | --- | --- | --- | | k | | | 21% | | | circumstances prevailing. | | | 22% | | | | 21% | | | | | k | | k | | | | k | | | | | | The Company may place an Executive | £2,721k | k | £4,048k | | | | | | £2,260k | | Director on gardening leave for a period | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | k | 78% | 61% | | | | | | | | 64% | | | | k | | 61% | | | | 82% | | | | | | 78% | | | | k | | | | | | | | | up to the duration of the notice period. | | | | | k | | | | | | During this time, the Executive Director | k £1,658k £1,377k will be entitled to receive base salary and k £2,395k 64% 64% their pension and benefits allowance. At 69% k the end of the gardening leave period, the k k Company may, at its discretion, pay the | k | | | | | | £595k | | | | k | £494k | | | Executive Director base salary, in lieu of the | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | £741k | | | | k | | | | | | | | | | | k | | | | | | 100% | 36% | 22% | 17% | | 100% 22% | 36% | 17% | balance of any period of notice given by | | | 100% | 31% | 18% | 14% | | | | | | | | | | | the Company or the Executive Director. Minimum Maximum In line with Maximum + Minimum Maximum In line with Maximum + Minimum Maximum In line with Maximum + When considering payments in the event of expectations Share Price expectations Share Price expectations Share Price termination, the Remuneration Committee takes into account individual circumstances. Relevant factors include the reasons for termination, contractual obligations and the | Illustrating the application of Remuneration | Maximum: This comprises fixed pay and the | employment contracts can be terminated on | relevant incentive plan rules. When | | --- | --- | --- | --- | | Policy | maximum value of SPP (500% of salary for the | up to a 12 months’ notice by either party. Our | determining any loss of office payment for a | | As a result of the Company’s remuneration | Chief Executive Officer and 400% of salary | intention is that the period of notice for any | departing Director, the Committee will always | | policy, a significant proportion of the | other Executive Directors respectively). | new Executive Director would not exceed | seek to minimise the cost to the Company | | remuneration received by Executive Directors | | 12months. | while complying with the contractual terms | Maximum + 50% share price growth: This | | depends on Company performance. The | | | and seeking to reflect the circumstances in | | --- | --- | --- | --- | --- | | | | comprises fixed pay and the maximum value | In the event that the Company terminates an | | | CEO – June Felix CFO – Charlie Rozes COO – Jon Noble | charts above show how total pay for Executive | | | place at the time. | | | | of SPP (500% of salary for the Chief Executive | Executive Director’s service contract other | | Directors varies under four different Officer and 400% of salary other Executive than in accordance with the terms of their The Committee reserves the right to make performance scenarios: minimum, target, | | | Directors respectively) with 50% share price | contract, the Committee will act in the best | additional payments where such payments | | --- | --- | --- | --- | --- | | £3,000 £3,500 £5,500 | maximum and maximum plus 50% share | | | | | | | growth applied to the portion of the SPP (70% | interests of the Company with the objective | are made in good faith in discharge of | | £5,000 | pricegrowth: | | | | | | | of total) which is delivered in shares. | that there is no reward for failure. All service | an existing legal obligation (or by way of | £3,000 £2,500 £4,500 Minimum: This comprises the fixed elements contracts are continuous, and contractual damages for breach of such an obligation); No account has been taken of share price | £4,000 £2,500 | of pay, being base salary and pension and | | termination payments relate to the unexpired | or by way of settlement or compromise | | --- | --- | --- | --- | --- | | £2,000 | | growth (other than as stated), or of dividend | | | | £3,500 | benefits allowance. Base salary and pension | | notice period. | of any claim arising in connection with | shares awarded. £2,000 and benefits allowance are effective as at the termination of an Executive Director’s £3,000 £1,500k On a Director’s departure, the Company may 1 June 2023. Executive Directors’ service contracts office or employment (including payment of £2,500 | £1,500k | | | at its sole discretion pay base salary and the | | | --- | --- | --- | --- | --- | | | | Executive Directors are employed under a | | reasonable fees for a departing director to | | £2,000k | Target: This comprises fixed pay and the | | value of pension and benefits allowance that | | | £1,000 | | | | obtain independent legal advice in relation | service contract with IG Group Limited (a | £1,000 £1,500 | target value of SPP (250% of salary for the | | would have been receivable in lieu of any | | | --- | --- | --- | --- | --- | | | | wholly-owned intermediate holding company) | | to their termination arrangements and | | £1,000 | Chief Executive Officer and 200% of salary | | unexpired period of notice. In the event of | | | £500 | | for the benefit of the Company and the | | nominal consideration for any agreement | £500 other Executive Directors respectively). termination for gross misconduct, the £500 Group. The period of notice for existing to any contractual terms protecting the Company may give neither notice nor a Executive Directors does not exceed 12 Company’s rights following termination). payment in lieu of notice. Where the months and, accordingly, Executive Directors’ Growth (50%) Growth (50%) Growth (50%) Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 103IG GROUP HOLDINGS PLC Annual Report 2023 Company Information FY23 Directors’ Remuneration Policycontinued Copies of the Executive Directors’ service awards which remain subject to the holding conditions and performance underpins have  Where an individual forfeits outstanding contracts are available for inspection at the period would be released to participants in been satisfied, and, unless the Committee variable pay opportunities or contractual Company’s Registered Office. line with the original timescales of the award, determines otherwise, the proportion of the rights at a previous employer as a result of unless the Committee determines that they performance period that has elapsed. For appointment, the Committee may offer Sustained performance plan (SPP) awards will be released on an earlier date or dates. both the annual award component and compensatory payments or awards, in If a participant ceases to hold employment or | | | long-term award component, any vested | such form as the Committee considers | | --- | --- | --- | --- | | be a Director within the Group, or gives notice | For plan contributions which relate to periods | | | | | | awards which remain subject to the holding | appropriate, taking into account all | | of leaving, other than as a 'Good Leaver' they | up to and including the financial year | | | | | | period would normally be released to | relevant factors including the form of | | forfeit any entitlement to receive further | 2019/20, any unvested awards in the | | | | | | participants in the event of a change | awards, expected value and vesting | | awards. All unvested awards will lapse. 'Good | participant’s plan account will vest one third | | | | | | ofcontrol. | timeframe of forfeited opportunities. | | Leavers' are participants who cease to hold | following the end of the plan year of cessation | | | When determining any such 'buyout', the employment or be a Director by reason of of employment and thereafter the remaining Where awards are granted in the form of guiding principle would be that awards their death, retirement, injury or disability, balance in equal parts on the first and second options, participants will normally have one would generally be on a 'like-for-like' basis transfer of their employment outside the anniversary of such first payment, unless the month following the change of control to unless this is considered by the Committee Group, or for any other reason at the Committee determines that they will vest on exercise their options. not to be practical or appropriate Committee’s discretion. one or more earlier dates. Recruitment Remuneration Policy  The maximum level of variable For the annual award component, 'Good Where Awards are granted in the form of When determining the remuneration package remuneration which may be awarded Leavers' would normally continue to be options, any vested awards already held at the for a newly appointed Executive Director, the (excluding any 'buyout' awards referred to eligible to receive an award for the year time of cessation of employment will remain Committee would seek to apply the following above) in respect of recruitment is 500% of in which they ceased employment. Such exercisable for a period of 12 months. Awards principles: salary, which is in line with the current | award would normally be pro-rated based | that vest following cessation will be capable of | | | | --- | --- | --- | --- | | | |  The package should be market competitive | maximum limit under the SPP | | on time in employment for the plan year | being exercised for a period of 12 months | | | to facilitate the recruitment of individuals and would remain subject to performance. following vesting. The exception is when  Where an Executive Director is required to of sufficient calibre to lead the business. At Any unvested Awards would continue dismissal has been for misconduct, in which relocate to take up their role, the the same time, the Committee would to vest on the normal dates, unless the case such awards lapse in full. Committee may provide assistance with intend to pay no more than it believes is Committee determines that they will vest relocation (either via one-off or ongoing Change of control necessary to secure the required talent on an earlier date or dates. The Committee payments or benefits) The Executive Directors’ contracts service do retains the discretion to pro-rate unvested  New Executive Directors will normally not provide for any enhanced payments in the  In the event that an internal candidate is awards if this is considered appropriate. receive a base salary, pension and benefits event of a change of control of the Company promoted to the Board, legacy terms and in line with the policy described on page 97 For the long-term award component, nor for liquidated damages. For the annual conditions would normally be honoured, and will also be eligible to join the incentive unvested awards for 'Good Leavers' would award component of the SPP, Executive including any accrued pension plans up to the limits set out in the Policy normally continue to vest on the original Directors may continue to receive an award entitlements and any outstanding vesting date, or, if the Committee so for the financial year in which the change of  In addition, the Committee has discretion incentiveawards determines, as soon as practicable after the control occurs. Any award would normally be to include any other remuneration  To facilitate any buyout awards outlined date of cessation. The extent to which awards pro-rated based on the portion of the year component or award which it feels is above, in the event of recruitment the vest in these circumstances will be prior to the change of control, unless the appropriate taking into account the Committee may grant awards to a new determined by the Committee, taking into Committee determines otherwise. Any specific circumstances of the recruitment, Executive Director relying on the account the extent to which any performance unvested annual award component awards subject to the limit on variable exemption in the Listing Rules which allows conditions or performance underpins have will normally vest in the event of a change of remuneration set out below. The key terms for the grant of awards to facilitate, in been satisfied, and, unless the Committee control. For the long-term award component, and rationale for any such component unusual circumstances, the recruitment of determines otherwise, the proportion of the unvested awards would normally vest in the would be disclosed as appropriate in the an Executive Director, without seeking performance period that has elapsed. event of a change of control. The extent to Directors’ Remuneration Report for the prior shareholder approval or under any which awards vest in these circumstances will relevant year For both the annual award component and other appropriate Company incentive plan be determined by the Committee, taking into long-term award component, any vested account the extent to which any performance Shareholder and ### 104 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information FY23 Directors’ Remuneration Policycontinued 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 To attract and retain Non-Executive The Remuneration Committee determines the fee for the Chairman The Chairman receives a single fee to cover all Board duties. Directors of appropriate calibre (without the Chairman present). Non-Executive Directors receive a fee for carrying out their duties. andexperience. The Board is responsible for setting Non-Executive Directors’ fees. They may receive additional fees if they chair the Board Committees, The Non-Executive Directors are not involved in any discussions or and for holding the post of Senior Independent Director. Additional decisions by the Board about their own remuneration. fees may be paid for additional roles or time commitments if considered appropriate. Fees are set taking into account the time commitment required to fulfil the role and typical practice at other similar companies. Committee membership fees may be paid. Fees are within the limits set by the Articles of Association and take Reasonable costs in relation to travel and accommodation for account of the commitment and responsibilities of the relevant role. 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. Benefits may be introduced if considered appropriate. Details of current fee levels are set out in the Annual Report on Remuneration. 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. Consideration of shareholder views As part of its review of remuneration policy undertaken during the year the Committee consulted in detail with a number of our top shareholders and proxy agencies to explain the changes proposed and their rationale. Shareholder feedback was very important in helping us shape the proposed Policy, with a number of iterations being made to initial proposals to take into account shareholder views. The Committee was pleased with the level of support received for the changes. The Committee will continue to engage with shareholders in relation to remuneration arrangements. Consideration of employment conditions elsewhere in the Company In setting the remuneration of the Executive Directors, the Committee takes into account the overall approach to reward for employees in the Company. The Group operates in a number of different environments, and has many employees who carry out diverse roles across a number of countries. All employees, including Directors, are paid by reference to the market rate, and base salary levels are reviewed regularly. When considering salary increases for Directors, the Committee takes into account pay and employment conditions across the wider workforce. However, no remuneration comparison measurements have been utilised to date. The Committee does not formally consult with employees on the executive remuneration policy. The Committee is periodically updated on pay and conditions applying to employees across the Company. IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and Company Information < > 105 # 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 20 September 2023. This part of the report includes a summary of how we implemented the Policy in FY23 and how we intend to implement the new Policy in FY24, subject to approval of the new Policy at the AGM. The parts of the report that are subject to audit have been marked. Implementation of Remuneration Policy in FY24 The following sections provides details of how the Directors' Remuneration Policy will be implemented for FY24. | Component | Operation | | --- | --- | | Base salary | Base salaries for the CEO, CFO and COO will be increased by 4.5% from 1 June 2023. This increase is below the 6.2% average increase awarded to the wider UK workforce. Base salaries are as follows: → CEO – £661,500 (4.5% increase) → CFO – £531,500 (4.5% increase) → COO – £441,500 (4.5% increase) | | Pension and benefits allowance | Pension and benefits allowances for Executive Directors are set at 12% of base salary which is in line with allowances available to the wider workforce in the UK. Executive Directors will be eligible to participate in any all employee share incentive plans on the same basis as other employees. | 106 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and Company Information # Annual Report on Remuneration continued | Component | Operation | | --- | --- | | **Sustained Performance Plan (SPP)** | For FY24 onwards the maximum plan contribution will continue to be 500% of salary for the CEO and 400% of salary for other Executive Directors. For FY24 onwards the SPP award will be structured as follows: **Annual award component (85% of overall award)** ➔ 30% of the overall award on adjusted earnings per share (EPS) performance ➔ 15% on relative Total Shareholder Return (TSR) compared to the FTSE 250 (excluding investment trusts), measured based on performance from 1 June 2021 to 31 May 2024 ➔ 20% of the overall award on revenue diversification (subject to an underpin) ➔ 20% of the overall award on non-financial strategic and operational measures including ESG measures **Long-term award component (15% of overall award)** 15% of the overall award on relative Total Shareholder Return (TSR) compared to the FTSE 250 (excluding investment trusts), measured based on performance from 1 June 2023 to 31 May 2026. Performance for Adjusted EPS, revenue diversification and non-financial strategic and operational measures will be assessed over the financial year to 31 May 2024. The relative TSR element of the annual award component (15% overall) will be assessed on a trailing basis over the three-year period from 1 June 2021 to 31 May 2024, in line with the approach previously used. The relative TSR element under the long-term award component (15% of the total) will be assessed with reference to performance in future years over the three-year period from 1 June 2023 to 31 May 2026. This is a transitional approach which will only apply to the FY24 SPP to ensure that performance in the interim years is fairly rewarded. For the FY25 SPP onwards TSR performance will be measured solely on a future years basis, with the weighting of the long-term component increased to 30%. Targets for Adjusted EPS, revenue diversification and non-financial measures are considered to be commercially sensitive and therefore have not been disclosed at this time. The Committee's intention is that these targets will be disclosed in next year's Annual Remuneration Report. Further details on performance measures are provided below. Any SPP award earned in respect of FY24 will be paid as follows: **Annual award component** ➔ 35.5% of the annual award component in cash in July 2024; ➔ 23.5% of the annual award component in shares awarded in July 2024, released in July 2027 (subject to an additional six-month retention period in line with the regulatory requirements under the IPPR); and ➔ 41% of the annual award component in shares awarded in July 2024, vesting in July 2026 and then subject to a two-year holding period. **Long-term award component** ➔ Fully in shares awarded in September 2023, vesting in September 2026 and then subject to a two-year holding period to September 2028. The Remuneration Committee retains discretion to scale back the vesting of awards if the underlying performance of the participant and/or the Group does not justify the payout of the award. | IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and^{}[] Company Information 107 # Annual Report on Remuneration continued | Component | Operation | | --- | --- | | **Shareholding guidelines** | Executive Directors are expected to build shareholdings of at least 200% of base salary. Executive Directors will be expected to maintain a minimum shareholding to 200% of salary (or actual shareholding if lower) for two years following stepping down as an Executive Director. This guideline applies to shares that are released from the SPP on or after the adoption of the Policy. Any shares purchased by the executives will not be subject to the guideline | # **Further details on performance measures** | Metrics | Rationale and link to the strategic XRs | Further details | | --- | --- | --- | | **Annual award component** | | | | **TSR relative to the FTSE 250 (excluding investment trusts) – measured on a trailing basis** 15% 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 operational performance ESG metrics and the progress on the strategic execution. | Trailing TSR will be assessed over the period 1 June 2021 to 31 May 2024. 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). | | **Adjusted EPS** 30% weighting | Adjusted EPS is a key indicator of the profits generated for shareholders, and a reflection of both revenue growth and cost control. | Adjusted EPS targets will be assessed based on performance for the year ending 31 May 2024. The Committee sets Adjusted 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. | | **Revenue diversification** 20% weighting | Revenue diversification is a key measure of the successful delivery of IG's strategy to diversify its earnings and create long-term, sustainable shareholder value. | The Committee will assess revenue diversification targets based on performance for the year ending 31 May 2024. The Committee sets revenue targets as absolute monetary values taking into accounts the Board approved four-year plan. Only organic revenue growth qualifies. For FY24, the following business areas will be included in the metric: → IG's US business (all products) → IG's business in Japan (all products) → Non-OTC revenue streams in all other geographies Payouts start to accrue for reaching threshold levels of performance with 100% of this portion being awarded for the achievement of maximum performance. | Shareholder and ### 108 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information Annual Report on Remunerationcontinued Metrics Rationale and link to the strategic KPIs Further details Revenue Underpin diversification As part of its assessment of the formulaic outcome following year end, the continued Committee will consider performance in a number of additional metrics in order to satisfy itself that revenue growth in these areas has been sustainable and in the long-term interests of shareholders. These metrics may include:  Longer-term profit or operating margin (including by product types)  Number of clients and/or client segments  Revenue per client and/or client segment  Client retention (including by product types)  Revenue type Based on this assessment, the Committee will retain discretion to modify the formulaic outcome if considered appropriate. 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, culture and community (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, protecting our intangible assets, and thereby delivering profit and shareholder value in the future. 1 Strategic enablers Driving the longer-term diversification, growth and strategic direction by measuring progress against key initiatives that will deliver on our purpose to power the pursuit 50% weighting of financial freedom for the ambitious. FY24 measures include targets related to the performance of the US, Japan, and European ETD businesses. People, culture and Considers the culture of the business and development of our people to create an attractive workplace to work for ambitious colleagues. For FY24, measures include community targets related to people engagement, diversity, societal contribution and the control environment. (including diversity 1 and inclusion) 25% weighting Client experience The short and longer-term development of client-focused initiatives to provide an outstanding client experience to champion our growing and diverse client base. 1 25% weighting ForFY24 measures include targets related to customer satisfaction and retention and service performance. 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, culture and community’ 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 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and Company Information < > 109 Annual Report on Remuneration continued Metrics Rationale and link to the strategic RRs Further details Long-term award component **TSR relative to the FTSE 250 (excluding investment trusts) – measured on a future years basis** 15% weighting Same as trailing relative TSR. Future years TSR will be assessed over the period 1 June 2023 to 31 May 2026. 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). Chair and Non-Executive Directors For FY24, the fees for the Chair and Non-Executive Director base fee have been increased by 4.5%. This increase is below the 6.2% average increase awarded to the wider UK workforce. Other additional fees are unchanged. The fees from 1 June 2023 are as follows: - Non-Executive Director base fee – £68,500 - Committee Chairs (other than the Nomination Committee) – £25,000 - Senior Independent Director – £15,000 - Committee membership fees (excluding the Nomination Committee and the Group Board Chair) – £3,000 - North American Board Chair – £65,000 - North American Board member – £25,000 - Chair fee – £315,500 Taking into account the additional responsibilities and time commitment, an additional fee of £65,000 applies for the Chair of the North American Board and an additional fee of £25,000 applies 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. 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. A copy of the service agreements are available for inspection at the Company's registered address. The dates on which service contracts are entered into and notice periods are as follows: - June Felix – 30 October 2018 (12 months' notice from either party) - Charlie Rozes – 1 June 2020 (12 months' notice from either party) - Jon Noble – 22 May 2018 (12 months' notice from either party) Non-Executive Directors' letters of appointment 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. 110 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and Company Information Annual Report on Remuneration continued # **Implementation of Remuneration Policy in FY23** Total single figure of remuneration – Executive Directors (audited) | Name of Director | Year | Fewc/basic salary £000 | Benefits allowance/benefits^{1} £000 | Pension £000 | Total fixed pay £000 | Buy-out awards^{1} £000 | Contribution to SPP account^{2} | | | Total £000 | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | | | Vested element £000 | Deferred element £000 | Total variable pay £000 | | | J Felix | 2023 | 633 | 94 | – | 727 | – | 698 | 1,630 | 2,328 | 3,055 | | | 2022 | 615 | 76 | – | 691 | – | 866 | 2,022 | 2,888 | 3,579 | | C Rozes | 2023 | 509 | 56 | 5 | 570 | – | 449 | 1,047 | 1,496 | 2,066 | | | 2022 | 494 | 55 | 4 | 553 | 230 | 557 | 1,299 | 2,086 | 2,639 | | J Noble | 2023 | 423 | 46 | 5 | 474 | – | 373 | 870 | 1,243 | 1,717 | | | 2022 | 400 | 44 | 4 | 448 | – | 451 | 1,052 | 1,503 | 1,951 | 1 Benefits can include dental cover, income protection cover, life assurance 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. Assistance was provided to J Felix and these costs came to £16,000 (including any applicable tax costs). J Felix, C Rozes and J Noble and receive 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. 2 The 2022 and 2023 benefits figure for J Felix include the £1.8s of matching shares. J Felix received as a participant in the all employee share-incentive plan. 3 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. For details of the portion of the buyout award which vested in June 2022 please refer to p90 of the Annual Report 2022. 4 Figures provided are the values of the SPP contributions in respect of performance for the period ending 31 May 2023 (i.e., plan year 10). 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 (35% 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 2028 and 50% of the total amount in July 2027, both subject to continued employment. 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 114. 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. Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 111IG GROUP HOLDINGS PLC Annual Report 2023 Company Information Annual Report on Remunerationcontinued Total single figure of remuneration – Non-Executive Directors (audited) Sustained performance plan (SPP) Fees 2,3 Benefits 4 Total Determination of SPP contribution for FY23 (audited) Name of Director Year £000 £000 £000 Performance targets for plan year 10 (FY23) comprised Adjusted EPS targets, TSR and non- M McTighe 2023 302 – 302 financial measures. TSR performance was measured over the three-year period from 1 June 2022 302 – 302 2020 to 31 May 2023, and Adjusted EPS and non-financial measures over the financial year ending 31 May 2023. J Moulds 2023 109 – 109 | | | | | Threshold | | Target | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | 2022 109 – 109 | | (25% payout for | | (50% payout | | | | | | Percentage of | | | | | Performance | TSRand 0% for | | for Adjusted | | | Maximum | | Actual | maximum award | | | R Bhasin 2023 72 – 72 | | measure Weighting | Adjusted EPS) | | | EPS only) | (100% payout) | | performance | | to Directors | | | | 2022 72 – 72 | | | | | | | | | | | 1 | Adjusted EPS 55% 76.7p 85.22p 98.0p 94.7p 87% A Didham 2023 97 – 97 TSR 25% Median N/A Upper +18.8% TSR 25.9% 2022 97 – 97 | | | | ranking | quartile | | 77th out | | | --- | --- | --- | --- | --- | --- | --- | --- | | Wu Gang 2023 69 – 69 | | | | ranking | | of 154 | | | | 2022 69 – 69 | | | | companies | | | | S-A Hibberd 2023 97 – 97 | | Non-financial 20% 0% N/A 100% 96% of | | | | | 96% | | | 2022 97 – 97 | | | | | maximum | | awarded M Le May 2023 157 24 181 (see below 2022 114 4 118 for details) 1 S Skerritt 2023 114 14 128 Total 100% 73.55% 2022 83 14 97 1 Straight line vesting occurs between threshold and target (85.22p) and between target and maximum H Stevenson 2023 94 – 94 2022 94 – 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. 1 S Skerritt joined the Board on 9 July 2021. Remuneration for FY22 is shown from this date 2 Other than in respect of the Chair, basic Non-Executive Director fees were £65,500 per annum in FY23 (no change from FY22) with an Performance measures: how these are set, and a review of performance for FY23 additional £25,000 paid for chairing a Board Committee (other than the Nomination Committee) and £3,000 for membership of a Adjusted EPS (55% weighting) Committee (excluding the Nomination Committee). The Senior Independent Director also receives an additional fee. With effect from 1 November 2021, taking into account the additional responsibilities and time commitment, an additional fee of £65,000 was At the start of the financial year, the Committee established an Adjusted EPS range in order to 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 measure the performance and determine the payouts under the SPP. In doing this, the American Board. The Chair of the North American Board also receives an additional £20,000 per annum to compensate them for the Committee took into account a number of relevant factors, including the Board-approved additional time spent in travel to attending Board meetings 3 S Skerritt receives an additional £20,000 per annum to compensate her for the additional time spent in travel attending Group budget and market consensus expectations. Boardmeetings 4 Certain Non-Executive Directors’ expenses relating to the performance of a Director’s duties, such as travel to and from Company Adjusted EPS performance for FY23 was 94.7 pence, which is ahead of internal and external meetings and related accommodation, have been classified as taxable benefits. In such cases, the Company will ensure that the expectations of performance at the start of the year. Adjusted EPS is significantly ahead of our Director is kept whole by settling the expense and any related tax. The figures shown include the cost of the taxable benefit plus the performance for FY20 and prior years, demonstrating that the Group has maintained its strong related personal tax charge performance and growth over the last three years. 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. Shareholder and ### 112 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information Annual Report on Remunerationcontinued For the award to be granted in respect of the year to 31 May 2023, TSR was measured over the three-year period from 1 June 2020 to 31 May 2023. Actual TSR performance for the three- year period was 18.8% (FY22: 74.9%). TSR was positioned just above the median compared tothe comparator group over the three-year period and therefore 25.9% of this element will beawarded. Non-financial measures (20% weighting) The Committee approved a series of non-financial measures comprising strategic enablers, client experience and people and culture during the year ended 31 May 2023. 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 96% (FY22: 95%) of the potential payout under this element. The table below provides details of the individual measures considered and their performance assessment for the year ended 31 May 2023. Component Detail FY23 outcome Strategic IG demonstrated strong progress in contributing to its growth 96% enablers and diversification targets. tastytrade launched their first major 50% weighting brand campaign, which delivered a significant beat on web traffic projections and search interest for, and supported an increase in aided brand awareness exceeding targets. Spectrum met the target to launch two new products through two new issuers, but missed the stretch goal to add a third product. tastycrypto released the digital wallet on time in the US. From asocial and environmental perspective, the Group maintained its carbon neutral status, continued to improve accuracy of reporting on emissions, and met internal delivery targets for ouraccessibility and vulnerable client initiatives. | Client | IG maintained high customer satisfaction during a more | 93% | | --- | --- | --- | | experience | challenging external environment. Average CSAT scores were | | | 25% weighting | held and NPS was improved, both higher than externally-tracked | | benchmarks. The Group slightly missed its target to reduce significantly the friction points in the payments user journeys, but performed on target for holding new client retention in line with previous years. | People and | IG demonstrated strong progress in developing our people and | 98% | | --- | --- | --- | | culture | culture in FY23. The Group met its internal D&I target for female | | | 25% weighting | representation and increased employee engagement to 87% | | ina period when most firms' engagement fell. The Group exceeded its internal volunteering and participation target as part of our social contribution commitments. Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 113IG GROUP HOLDINGS PLC Annual Report 2023 Company Information Annual Report on Remunerationcontinued Overall summary The Committee believes that the formulaic outcome of the FY23 SPP is appropriate in the context of overall business performance and that no discretion will be applied to the outcome. Based on the performance for FY23, we will grant awards under the SPP at 73.55% of the maximum potential payout to the Executive Directors after the announcement of the results. Of this, 30% will be delivered in cash, with 20% award in share options vesting in July 2026 and 50% awarded in share options vesting July 2027. 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 ten years ago, the average payout under the SPP is 66.9% 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. 10-year Financial year 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 average SPP contribution (% maximum) 54.0% 41.0% 90.0% 27.0% 80.0% 18.6% 97.2% 93.4% 94.0% 73.6% 66.9% Awards granted during FY23 (audited) The SPP awards granted during FY23 in respect of performance to 31 May 2022 (plan year 9) are as follows: Contribution Number of | | | | | | options in the plan | | | | | Number of | | | | | | Number of | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | account after plan | | | | options vested | | | | | options in the plan | | | | | Value of options | | | Number of | | | year 9 | | and exercised | | | | Number of | | account at the | | | 1 | | awarded | options awarded | | 2 | contribution | | 3 | during the year | | 4 | options lapsed | | | end of the year% of salary | | J Felix 470% £2,021,701 254,847 694,228 71,590 – 622,638 C Rozes 376% £1,298,886 163,732 308,071 – – 308,071 J Noble 376% £1,051,916 132,600 414,501 56,998 – 357,503 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 2022 of 793.3 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 FY22 SPP awards and the assessment of performance against targets are set on out pages 92 and 93 of Annual Report 2022 3 In addition to the awards made in respect of plan year 9, this also includes the brought forward number of options in the plan account from plan years 1 to 7 (where relevant) with its respective accrued dividend shares 4 All options were exercised on the same day. The closing share price on 4 August 2022, the date of exercise, was 818 pence and the exercise price of the share options was 0.005 pence The SPP has now reached the end of its ten-year life. For awards granted in respect of years up to and including the financial year ending 31 May 2020 (plan years 1 to 7), in accordance with the scheme rules 50% of the cumulative awards in the plan account will vest in July 2023, with a further 25% released in both July 2024 and July 2025. 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. Buyout 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’ buyout was in the form of nil-cost options which vested in equal tranches subject to continued employment on 1 May 2021, 1 May 2022 and 1 May 2023. The final tranche of the award granted in respect of the nil-cost options resulted in 2,179 shares vesting, with an additional 390 shares accrued in respect of dividends. Shareholder and ### 114 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information Annual Report on Remunerationcontinued | Awards to be granted in respect of FY23 | Other share awards outstanding (audited) | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | SPP awards for FY23 will be delivered 30% in | | | | | | | | Number | | | | Share price at | Number as at | Number awarded | Number lapsed | Number released | outstanding at | | cash after the announcement of results for Award date award date 31 May 2022 during the year during the year during the year 31 May 23 FY23, 20% in share options released in July 2026 and 50% in share options released in J Felix July2027. SIP: matching shares 6 Aug 19 565.29p 318 0 0 318 0 SIP: matching shares 6 Aug 20 743.66p 242 0 0 0 242 Details of the 70% of the SPP award due to be SIP: matching shares 5 Aug 21 909.24p 198 0 0 0 198 awarded in shares, using an estimate of the SIP: matching shares 4 Aug 22 815.38p 0 221 0 0 221 options to be granted in respect of plan year 10 (i.e., performance to 31 May 2023), are set Total 758 221 0 318 661 out below: Number Plan contribution in respect Share price at Number as at Number awarded Number lapsed Number released outstanding at ofperiodended 31 May Award date award date 31 May 2022 during the year during the year during the year 31 May 23 2023 (estimated number of Event options) 1 J Noble J Felix Plan year 10 242,485 SIP: matching shares 6 Aug 19 565.29p 318 0 0 318 0 C Rozes Plan year 10 155,834 Total 318 0 0 318 0 J Noble Plan year 10 129,478 1 Executive Directors will be granted awards, in respect of 70% of | the amount earned, for plan year 10 following the | | | | | | | Number of | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | announcement of results for the year ended 31 May 2023 on | | | | | | | dividend | | | Number | | 20 July 2023. The share price used to calculate the number of | | Share price at | Number as at | Number awarded | Number lapsed | equivalents added | | Number vested | outstanding at | | | awards to be granted will be the ten-day average share price | Award date | award date | 31 May 2022 | during the year | during the year | | at vesting | during the year | | 31 May 23 | 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 1 C Rozes awards has been estimated using a share price of 672 pence, 2 Buyout award 6 Aug 20 734.00p 35,616 0 2,244 3,828 37,200 0 being the share price on 31 May 2023. Share awards have an 3 4 exercise price of 0.005 pence Buyout award 6 Aug 20 734.00p 2,179 0 0 390 2,569 0 Total 37,795 0 2,244 4,218 39,769 0 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. For details of these awards see the 2020 Annual Report 2 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 3 An award of restricted shares vesting in equal tranches on 1 May 2021, 1 May 2022 and 1 May 2023 (subject to continued employment) 4 The closing share price on 2 May 2023 (markets were closed on 1 May 2023), the date restrictions lifted, was 718.5 pence Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 115IG GROUP HOLDINGS PLC Annual Report 2023 Company Information Annual Report on Remunerationcontinued Table of Directors’ share interests (audited) % of salary held under Share options | Legally owned | 1 | | | | | | Total | shareholdingpolicy | 4 | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | Share with | | without | | | | | | 31 May | | 31 May | performance | performance | | | Vested but | 31 May | | | 2022 | | 2023 | conditions | conditions | | 2,3 | unexercised | 2023 % salary | | Executive Directors J Felix 318,628 368,876 – 623,299 – 992,175 743% C Rozes 48,120 73,662 – 308,071 – 381,733 313% J Noble 83,207 83,525 – 357,503 – 441,028 434% Non-Executive Directors M McTighe 6,600 6,600 – – – 6,600 – J Moulds 100,000 100,000 – – – 100,000 – R Bhasin – – – – – – – A Didham 4,894 4,894 – – – 4,894 – S-A Hibberd – – – – – – – Wu Gang – 1,300 – – – 1,300 – M Le May – – – – – – – S Skerritt – – – – – – – H Stevenson – – – – – – – 1 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 2 These figures include the number of matching shares held at 31 May 2023 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 3 This figure excludes awards under the SPP scheme for performance year ending 31 May 2023, which will be granted following the announcement of the Group’s results on 20 July 2023. The awards held in the SPP plan account include those in respect of plan years 1 to 9 as at 31 May 2023 4 Calculated as total shares owned as a percentage of salary on 31 May 2023 including the unvested shares held within the SPP on a net of tax basis at the closing mid-market share price of 672 pence on 31 May 2023 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. There have been no changes to any of the Directors’ share interests between 31 May 2023 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 2023 are not included in this table (see page 110 for details). 116 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and Company Information Annual Report on Remuneration continued **Payments to past Directors (audited)** No payments were made to past Directors in the year. **Payments for Loss of Office (audited)** No payments for loss of office 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 three 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 | | | FY23/FY22 | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Base salary % change | Taxable benefits % change | Performance-related remuneration % change | 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% | 3.0% | 24.0% | (19.4%) | | C Rozes^{1} | - | - | - | 0.7% | (1.7%) | 1.4% | 3.0% | 5.1% | (19.4%) | | J Noble | 1.7% | 1.7% | (2.3%) | 6.3%^{2} | 7.3% | 6.7% | 5.8% | 6.3% | (17.3%) | | **Non-Executive Directors** | | | | | | | | | | | M McTighe | 300.0% | - | - | 0.7% | - | - | 0.0% | - | - | | J Moulds | (39.0%) | - | - | 0.68% | - | - | 0.0% | - | - | | R Bhasin^{3} | - | - | - | 14.2% | - | - | 0.0% | - | - | | A Didham | 72.0% | - | - | 19.7% | - | - | 0.0% | - | - | | S-A Hibberd | 32.0% | (100.0%) | - | 3.1% | - | - | 0.0% | - | - | | Wu Gang^{4} | - | - | - | 53.0% | - | - | 0.0% | - | - | | M Le May | (23.0%) | - | - | 44.3% | - | - | 37.7% | 600.0% | - | | S Skerritt^{5} | - | - | - | - | - | - | 8.4% | - | - | | H Stevenson | 614.0% | - | - | 9.3% | - | - | 0.0% | - | - | | **Group UK employees^{6}** | **10.0%** | **10.0%** | **17.0%** | **12.0%** | **12.0%** | **33.0%** | **2.2%** | **2.8%** | **(31.0%)** | 1 C Rozes joined the Board on 1 June 2020 2 J Noble salary change percentage restated from FY22 annual report 3 R Bhasin joined the Board on 6 July 2020 4 Wu Gang joined the Board on 30 September 2020 5 S Skerritt joined the Board on 9 July 2021 6 Employee group consists of individuals employed by IG Index Limited the main UK employing entity as IG Group Holdings 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 Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 117IG GROUP HOLDINGS PLC Annual Report 2023 Company Information Annual Report on Remunerationcontinued Relative importance of spend on pay The CEO pay ratio has been rounded to the nearest whole number. The ratios for FY23 are The following table sets out the shareholder distributions, which include dividends and share lower than FY22 and FY21, which reflects the lower SPP outturn for FY23 (since the CEO’s buybacks by the Company during the financial year and overall spend on pay over the past package comprises of a larger proportion of at risk, variable pay) and the increase in salaries financial year: applied to UK employees during FY23 (which was higher than that awarded to the CEO). The Company believes the median pay ratio is consistent with its reward policies for the Company’s 2023 2022 Percentage UK employees. £m m change Shareholder distributions 363.4 182.2 95% During the year the Board has received presentations from management on the approach to Employee remuneration costs 248.6 214.2 16% the Company’s wider policies on employee pay, reward and progression. The Committee also reviewed year-end incentive outcomes. As the table shows, there has been a significant increase in shareholder distributions in 2023. Taking into account the above, the Committee believes that the CEO’s pay ratio and the This increase is a result of the Company returning more capital to shareholders via our share year-on-year change is fair in the context of our approach to remuneration more broadly buy back program in line with our published capital allocation framework. withinthe organisation. CEO to all employees pay ratio Statement of shareholder voting The CEO’s total remuneration as a ratio against the full-time equivalent remuneration of The Directors’ Remuneration Policy was approved at the 2020 AGM. The Directors’ UKemployees is detailed in the table below: Remuneration Report for FY22 was approved at the 2022 AGM. The following votes 25th percentile 75th percentile werereceived: Year Method pay ratio Median pay ratio pay ratio 2020 Remuneration Policy | 2023 A 43:1 31:1 22:1 | | | Total number of | | | --- | --- | --- | --- | --- | | 2022 A 50:1 36:1 25:1 | | | | votes (000s) % of votes cast | | 2021 A 55:1 40:1 29:1 | | 1 | | | | | For | | | 268,201 88.1% | 2020 A 65:1 46:1 34:1 Against 36,221 11.9% Total 304,422 100% The Company has calculated the ratio in line with the reporting regulations using ‘Option A’ Withheld 9,350 – (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 1 ‘For’ includes votes at the Chair’s discretion 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 2022 Annual Report on Remuneration 31 May 2023 and any part-time employees’ salary and bonus have been pro-rated to convert Total number of votes (000s) % of votes cast them into a full-time equivalent. 1 | | | | For | 318,596 93.25% | | --- | --- | --- | --- | --- | | Base | | Total | | | | salary | remuneration | | Against 23,058 6.75% | | Total 341,654 100% 25th percentile £55,000 £71,850 Withheld 64 – 50th percentile £79,150 £99,598 75th percentile £102,000 £136,990 1 ‘For’ includes votes at the Chair’s discretion Shareholder and ### 118 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information Annual Report on Remunerationcontinued | Total Shareholder Return chart | CEO earnings history | | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | This graph shows the value, by 31 May 2023, of £100 invested in the Group on 31 May 2013 | | | T Howkins P Hetherington J Felix | | | | | | | | | | compared with the value of £100 invested in the FTSE 250 Index and the FTSE 350 Financial | | | | LTIP/ VSP/SPP | | | LTIP/ VSP/SPP | | | LTIP/ VSP/SPP | | | Services Index. As the Group is a member of both of these indices, the Committee believes | | Single figure | | | vesting | Single figure | | vesting | Single figure | | vesting | | | | remuneration | | | outcome | remuneration | | outcome | remuneration | | outcome | it is appropriate to compare the Group’s performance against them. 1 2014 1,970 3.00% – – – – 2 £300 54.00% 2015 1,519 41.00% – – – – £250 3 2016 210 0.00% 2,641 90.00% – – 2017 – – 1,452 27.10% – – £200 2018 – – 2,974 80.00% – – 4 5,6 2019 – – 777 18.64% 823 18.64% £150 2020 – – – – 3,640 97.20% £100 2021 – – – – 3,544 93.40% 2022 – – – – 3,577 94.00% £50 2023 – – – – 3,055 73.55% 1 Relates to Value Sharing Plan (VSP) award to T Howkins 0 2 Relates to SPP award to T Howkins 3 P Hetherington was appointed CEO on 15 October 2015; prior to this he was COO. This figure includes a portion of the remuneration 31 May 31 May 31 May 31 May 31 May 31 May 31 May 31 May 31 May 31 May 31 May that he received during this period 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 4 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 5 P Mainwaring performed the role of acting CEO for the period between 26 September 2018 and 30 October 2018 but received no IG Group FTSE 250 Index FTSE 350 Financial Services Index additional remuneration for this period. This figure therefore includes one month of P Mainwaring’s compensation equating to £66k 6 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 This report was approved by the Board of Directors on 19 July 2023 and signed on its behalf by: Helen Stevenson Chair of the Remuneration Committee Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 119IG GROUP HOLDINGS PLC Annual Report 2023 Company Information ### Directors’ Report | Directors’ Report | Section 414A of the CA2006 requires the | Branch offices | Certain nominee companies representing | | --- | --- | --- | --- | | The Directors present their report, together | Directors to present a Strategic Report in the | As at 31 May 2023, we had the following | ourEmployee Benefit Trusts hold shares in | | with the Group Financial Statements, for | Annual Report and Financial Statements. The | overseas branches within the meaning | the Company, in connection with the | | FY23. The Directors’ Report comprises pages | information can be found on pages 9–55. | of the CA2006: offices in Australia, China | operation of the Company’s share plans. | | 119–121 of this report, together with the | | (Representative Office), France, Germany, | Evergreen dividend waivers remain in place | The Company has chosen, in accordance with sections of the Annual Report incorporated Hong Kong, Italy, New Zealand, the onshares held by them that have not been Section 414C (11) of the CA2006 and as noted by reference as located below: Netherlands, Norway, Poland, South Africa, allocated to employees. in this Directors’ Report, to include certain Spain and Sweden. Contents Page matters in its Strategic Report that would otherwise be disclosed in this Directors’ Articles of Association Governance Report 56 | | | Report, including the Non-Financial | Corporate Governance Statement | The Company’s Articles of Association are | | --- | --- | --- | --- | --- | | Statement of Directors’ | | Information Statement required by Section | In compliance with the UK FCA’s Disclosure | available on our website, or by writing to the | | Responsibilities 122 | | 414C of the CA2006, which can be found | Guidance and Transparency Rules (DTR) 7.2.1, | Company Secretary at the Group’s registered | | | | onpage 35. | the disclosures required by the DTR are set | office. The Articles of Association were last | | Financial instruments and financial | 131– | | | | | | | | out in this Directors’ Report and in the | amended by shareholders by means of a | | risk management | 189 | In line with the IFPR and the Capital | | | | | | | Governance Report. | special resolution on 22 September 2021. | Requirements (Country-by-Country Greenhouse gas emissions 29–31 Reporting) Regulations 2013, requiring credit Workforce engagement, Profit and dividends Board of Directors and their interests institutions and investment firms to publish communication and 26, The Group’s statutory profit for the year after The Directors who held office during FY23 annually certain tax and financial data for equalopportunities 32–34 taxation amounted to £363.7 million (FY22: areset out below: each country where they operate, the Group’s £503.9 million), all of which is attributable to UK-regulated subsidiaries will make available Chair Employees, Customers, Suppliers the equity members of the Company. their country-by-country reporting on Mike McTighe and Others Reporting Requirements our website. The Directors recommend a final ordinary Under the Companies Independent Non-Executive Directors (Miscellaneous Reporting) dividend of 31.94 pence per share, making Jonathan Moulds Regulations 2018 20 –21 Disclosures required pursuant to Listing a total of 45.2 pence per share for the year Rakesh Bhasin | | | | Rule 9.8.4R | (FY22: 44.2 pence per share). Dividends | | | --- | --- | --- | --- | --- | --- | | Policy concerning the employment | | 26, | | | Andrew Didham | | | | | In compliance with the UK FCA’s Listing Rules, | are recognised in the Financial Statements | | | of disabled persons | 32–34 | | | | Wu Gang | | | | | the information in Listing Rule 9.8.4R to be | for the year in which they are paid or, in the | | Sally-Ann Hibberd Going Concern and included in the Annual Report and Accounts, case of a final dividend, when approved by Malcolm Le May ViabilityStatement 54–55 where applicable, can be found on the the shareholders. The amount recognised Susan Skerritt following pages: in the Financial Statements, as described in Directors’ Remuneration Report and Helen Stevenson note 11, includes this financial year’s interim | Policy, service contracts and details | | Detail Page | | | | --- | --- | --- | --- | --- | | | | | dividend and the final dividend from the | Executive Directors | | of Directors’ interest in shares | 89 –118 | | | | | | | Waiver of dividends 120 | previous year, both of which were paid. | June Felix | | Likely future developments 12–13 | | | | Jon Noble | The final ordinary dividend, if approved, Charlie Rozes Risk management and willbe paid on 19 October 2023 to those Modern slavery internalcontrol 48–53 shareholders on the register as at In compliance with Section 4 (I) of the Modern 22 September 2023. Anti-bribery and corruption 27 Slavery Act 2015, we have published our slavery and human trafficking statement onour website. Shareholder and ### 120 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information Directors’ Reportcontinued | Appointment and retirement of Directors | in place. These provisions remain in force for | Variation of rights | Powers of the Directors to issue or purchase | | --- | --- | --- | --- | | The rules concerning the appointment and | the benefit of the Directors, in relation to | Subject to the provisions of applicable | the Company’s shares | | replacement of Directors are set out in the | certain losses and liabilities which they may | statutes, the rights attached to any class of | The Articles of Association permit the | | Articles of Association. The Board has the | incur (or have incurred) to third parties in the | shares may be varied, either with the consent | Directors to issue or repurchase the | | power to appoint any person as a Director to | course of acting as Directors of the Company. | in writing of the holders of at least three- | Company’s own shares, subject to obtaining | | fill a casual vacancy or as an additional | | quarters in nominal value of the issued shares | shareholders’ prior approval. The | | Director, provided the total number of | | of that class, or with the sanction of a special | shareholders gave this approval at the 2022 | Research and development Directors does not exceed the maximum resolution passed at a separate meeting of AGM. The authority to issue or buy back In the ordinary course of business, we prescribed in the Articles of Association. Any the holders of the shares of that class. shares will expire at the 2023 AGM, and it will regularly develop new products and services. such Director holds office only until the next be proposed at the meeting that the Directors AGM and is then eligible to offer themselves be granted new authorities to issue or Restrictions on transfer of securities Political donations for election. buyback shares. The Directors currently have There are no specific restrictions on the The Company made no political donations to authority to purchase up to 43,015,803 of the The Articles of Association also require that all transfer of securities in the Company, other political organisations or independent Company’s ordinary shares. 22,819,706 those Directors who have been in office at the than as contained in the Articles of election candidates and incurred no political shares were purchased during the year. time of the two previous AGMs, and who did Association, this paragraph and certain laws expenditure in the year (FY22: £nil). not retire at either of them, must retire as or regulations, such as those related to insider During the year, the Company instructed the Directors by rotation. Such Directors are trading, which may be imposed from time to trustees of the Employee Benefit Trusts to Share capital eligible to stand for re-election. However, in time. The Directors and certain employees are purchase shares in order to satisfy awards The Company has three classes of shares: line with the Code’s recommendation, all required to obtain approval prior to dealing in under our share-incentive plan schemes and ordinary shares, deferred redeemable shares Directors will stand for re-election at the the Company’s securities. Certain parties who also issued shares in respect of the sustained and preference shares. As at 31 May 2023, 2023AGM. were previously shareholders in tastytrade performance plan. Details of the shares held our issued shares comprised 408,947,842 are subject to contractual restrictions on by our Employee Benefit Trusts, and the ordinary shares of 0.005 pence each | | | transfer in accordance with the terms of the | amounts paid during the year, are disclosed in | | --- | --- | --- | --- | | Directors’ conflicts of interest | (representing 99.97% of the total issued share | | | | | | sale arrangements. We are not aware of any | note 24 to the Financial Statements. | | In accordance with the CA2006, all Directors | capital), 65,000 deferred redeemable shares | | | agreements between holders of securities must disclose both the nature and extent of of 0.001 pence each (representing 0.01% of At the AGM held on 21 September 2022, the that may result in restrictions on the transfer any potential, actual or perceived conflicts the total issued share capital) and 40,000 Company was granted authority to allot of securities or on voting rights. with the interests of the Company. We explain preference shares of £1.00 each ordinary shares in the Company up to an the procedure for this on page 61. (representing 0.01% of the total issued share aggregate nominal amount of £7,000, being Exercise of rights of shares in employee capital). Details of movement in our share 33% of the total issued share capital at that share schemes Insurance and indemnities capital and rights attached to the issued date, amounting to 142,419,570 ordinary The trustees of the IG Group Employee The Group has Directors’ and Officers’ liability shares are given in note 23 to the Financial shares. In addition, the Company was granted Benefit Trusts do not seek to exercise voting insurance in place, providing appropriate Statements. Information about the rights authority to allot further ordinary shares in rights on shares held in the employee trusts, cover for any legal action brought against its attached to our shares can also be found in the Company up to an aggregate nominal other than on the direction of the underlying Directors. Qualifying third-party indemnity the Articles of Association. Details of the amount of £7,000 pursuant to a rights issue, beneficiaries. No voting rights are exercised in provisions (as defined by Section 234 of the Group’s required regulatory capital are being 33% of the total issued share capital at relation to shares unallocated to individual CA2006) were in force during FY23 and a disclosed in the Business Performance Review that date, amounting to 142,419,570 ordinary beneficiaries. The trustees have a dividend Deed of Indemnity with the Directors was put on pages 39–47. shares. No ordinary shares were issued under waiver in place in respect of unallocated these authorities during the year. shares held in the trust. IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and Company Information < > 121 # Directors' Report continued # **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 DTRS, from holders of notifiable interests in the Company's issued share capital as at 31 May 2023. 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. | Major interest in shares | No. of shares | Percentage^{1} | | --- | --- | --- | | Artemis Investment Management LLP | 18,510,435 | 5.01% | | BlackRock, Inc. | 19,820,667 | 5.36% | | Massachusetts Financial Services Company | 20,960,928 | 5.08% | | Tom Sosnoff | 14,888,162 | 3.40% | | Standard Life Aberdeen | 11,137,095 | 3.01% | $^{1}$ The percentage is as at the date of notification The Company has not been informed of any other changes to the notifiable interests between 31 May 2023 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 19 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 20 September 2023. Details of the resolutions to be proposed will be provided in the AGM Notice. # **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 20 September 2023. # **Subsequent events** Please refer to note 35 to the Financial Statements. On behalf of the Board **Charles A. Rozes** Chief Financial Officer 19 July 2023 Shareholder and ### 122 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information ### Statement of Directors’ Responsibilities in respect of the Financial Statements | The Directors are responsible for preparing | The Directors are also responsible for keeping | In the case of each Director in office at the | | --- | --- | --- | | the FY23 Annual Report and Financial | adequate accounting records that are | date the Directors’ Report is approved: | | Statements in accordance with applicable law | sufficient to show and explain the Group’s and | |  So far as the Director is aware, there is and regulation. Company’s transactions and disclose with no relevant audit information of which reasonable accuracy at any time the financial Company law requires the Directors to the Group’s and Company’s Auditor position of the Group and Company and prepare Financial Statements for each are unaware enable them to ensure that the Financial financial year. Under that law the Directors Statements and the Directors’ Remuneration  They have taken all the steps that they have prepared the Group and the Company Report comply with the CA2006. ought to have taken as a Director in order Financial Statements in accordance with UK- to make themselves aware of any relevant adopted International Accounting Standards. The Directors are responsible for the audit information and to establish that the maintenance and integrity of the Company’s Under company law, Directors must not Group’s and Company’s Auditor is aware of website. Legislation in the UK governing the approve the Financial Statements unless they that information preparation and dissemination of Financial are satisfied that they give a true and fair view Statements may differ from legislation in On behalf of the Board of the state of affairs of the Group and other jurisdictions. Company and of the profit or loss of the Group for that period. In preparing the Financial Statements, the Directors are Directors’ confirmations required to: The Directors consider that the FY23 Annual Report and Financial Statements, taken as a  Select suitable accounting policies and whole, is fair, balanced and understandable then apply them consistently; and provides the information necessary for shareholders to assess the Group’s and  State whether applicable UK-adopted Charles A. Rozes Company’s position and performance, Chief Financial Officer International Accounting Standards have business model and strategy. 19 July 2023 been followed, subject to any material departures disclosed and explained in the Each of the Directors, whose names and Financial Statements; functions are listed on pages 58–61 confirm that, to the best of their knowledge:  Make judgements and accounting estimates that are reasonable and  The Group and Company Financial prudent; and Statements, which have been prepared in accordance with UK-adopted International  Prepare the Financial Statements on the Accounting Standards, give a true and fair going concern basis unless it is view of the assets, liabilities and financial inappropriate to presume that the Group position of the Group and Company, and of and Company will continue in business. the profit of the Group The Directors are responsible for  The Strategic Report includes a fair review safeguarding the assets of the Group and of the development and performance of Company and hence for taking reasonable the business and the position of the Group steps for the prevention and detection of and Company, together with a description fraud and other irregularities. of the principal risks and uncertainties that it faces Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 123IG GROUP HOLDINGS PLC Annual Report 2023 Company Information ### Independent Auditors’ Report ### to the Members of IG Group Holdings plc Report on the audit of the Basis for opinion Key audit matters context of our audit of the financial Financial Statements We conducted our audit in accordance with  Estimation of the recoverable amount statements as a whole, and in forming our Opinion International Standards on Auditing (UK) of the US cash generating unit – opinion thereon, and we do not provide a In our opinion, IG Group Holdings plc’s Group (“ISAs (UK)”) and applicable law. Our tastytrade, Inc. (Group) separate opinion on these matters. Financial Statements and Company Financial responsibilities under ISAs (UK) are further  OTC derivative revenue (Group) This is not a complete list of all risks identified Statements (the “financial statements”): described in the Auditors’ responsibilities for by our audit. the audit of the financial statements section  Carrying value of the investments in  give a true and fair view of the state of the of our report. We believe that the audit subsidiaries (Company) The Fair value of customer relationships Group’s and of the Company’s affairs as at | | evidence we have obtained is sufficient and | | recognised on the acquisition of tastytrade, | | --- | --- | --- | --- | | 31 May 2023 and of the Group’s profit and | | Materiality | | | | appropriate to provide a basis for our opinion. | | Inc. (Group), which was a key audit matter last | | the Group’s and Company’s cash flows for | |  Overall Group materiality: £22,400,000 | | year, is no longer included because the initial the year then ended; Independence (2022: £23,800,000) based on 5% of fair value was determined as part of the We remained independent of the Group in adjusted profit before tax.  have been properly prepared in purchase price allocation exercise, which accordance with the ethical requirements accordance with UK-adopted international  Overall Company materiality: £19,900,000 could have been revised up to 12 months post that are relevant to our audit of the financial accounting standards as applied in (2022: £17,600,000) based on 1% of acquisition. As this timeframe has passed we statements in the UK, which includes the accordance with the provisions of the total assets. do not consider the initial valuation of the FRC’s Ethical Standard, as applicable to listed Companies Act 2006; and customer relationships to be a key audit public interest entities, and we have fulfilled  Performance materiality: £16,800,000 matter in the current year. The customer  have been prepared in accordance with our other ethical responsibilities in (2022: £17,800,000) (Group) and relationships asset does not generate cash the requirements of the Companies accordance with these requirements. £14,900,000 (2022: £13,200,000) inflows that are largely independent and is | | Act2006. | | | (Company). | | | --- | --- | --- | --- | --- | --- | | | | To the best of our knowledge and belief, we | | | included within the US cash generating unit | | We have audited the financial statements, | | declare that non-audit services prohibited by | The scope of our audit | | for purposes of impairment testing. | | included within the Annual Report, which | | the FRC’s Ethical Standard were not provided. | As part of designing our audit, we determined | | Otherwise, the key audit matters below | | comprise: the Consolidated and Company | | | materiality and assessed the risks of material | | are consistent with last year. | Other than those disclosed in Note 5, we have Statements of Financial Position as at misstatement in the financial statements. provided no non-audit services to the 31 May 2023; the Consolidated Income Company or its controlled undertakings in the Key audit matters Statement, the Consolidated Statement of period under audit. Key audit matters are those matters that, in Comprehensive Income, the Consolidated the auditors’ professional judgement, were of and Company Statements of Changes in Our audit approach most significance in the audit of the financial Equity and Consolidated and Company Overview statements of the current period and include Statements of Cash Flows for the year This was the third year that it has been my the most significant assessed risks of material then ended; and the notes to the financial responsibility to form this opinion on behalf misstatement (whether or not due to fraud) statements, which include a description of PricewaterhouseCoopers LLP (“PwC”), who identified by the auditors, including those of the significant accounting policies. you first appointed on 8 December 2010 in which had the greatest effect on: the overall relation to that year’s audit. In addition to Our opinion is consistent with our reporting audit strategy; the allocation of resources in forming this opinion, in this report we have to the Audit Committee. the audit; and directing the efforts of the also provided information on how we engagement team. These matters, and any approached the audit and how it changed comments we make on the results of our from the previous year. procedures thereon, were addressed in the Shareholder and ### 124 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information Independent Auditors’ Reportcontinued Key audit matter How our audit addressed the key audit matter Estimation of the recoverable amount of the US cash generating unit We understood and evaluated the design and implementation of controls relating to the Group's impairment assessment. – tastytrade, Inc. (Group) We obtained management’s value-in-use impairment model. We assessed the methodology used by management and The US cash generating unit ("CGU") had £509.2m of goodwill their experts against the requirements of IAS 36 and we tested the mathematical accuracy of the calculations. We allocated to it as at 31 May 2023. This is a result of the acquisition of agreed the carrying amount of the US CGU to underlying accounting records, compared the cash flows used in the tastytrade, Inc in June 2021. As the goodwill is associated with a impairment models to the approved plan and assessed the reasonableness of the adjustments made to the cash flows business operating in the United States of America it is retranslated to ensure their compliance with IAS 36. into sterling at each reporting date. We utilised our in-house valuation experts to evaluate the appropriateness of the methodology used in the impairment As required by IAS 36 ‘Impairment of assets’ ("IAS 36"), management model. We also assessed the competency and objectivity of our in-house and management experts so that we were has performed their annual goodwill impairment assessment. The able to use their work. goodwill impairment assessment is dependent on an estimate of the recoverable amount of the US CGU. Management used a value-in-use In respect of management’s assumptions, our in-house valuation experts assessed the reasonableness of the discount model to determine the recoverable amount of the US CGU in their rate and long-term growth rate used in the impairment model, including the relationship between these assumptions impairment assessment, as they determined this exceeded the fair and management’s estimated future cash flows. value less costs of disposal valuation. We performed the following procedures over the significant assumptions relating to the estimated future cash flows: A number of assumptions principally relating to revenue growth,  Challenged the appropriateness of management’s assumptions and, where relevant, their interrelationships; earnings before interest, tax, depreciation and amortisation, long term growth rates, and tax and discount rates were required to be assessed  Identified the key drivers in management’s forecasts and obtained evidence to support the reasonableness of these by management, when performing their impairment assessment. To assumptions including historic experience, third-party sources including market reports and information available assist with the determination of the value-in-use, management from tastytrade, Inc management; and engaged their own external valuation experts.  Assessed whether judgements made in deriving the assumptions gave rise to indicators of possible management bias. We have focused on this area as the value-in-use calculation of the US We evaluated the appropriateness of the critical accounting estimate and key sources of estimation uncertainty in note CGU involves a significant degree of judgement and the estimation 1 to the Consolidated Financial Statements and the disclosures on goodwill in note 12 and considered these to be uncertainty is high. reasonable. We also performed independent sensitivity calculations for the relevant assumptions included in note 12. As part of our risk assessment procedures we also assessed the Based on the procedures performed, we considered the directors’ conclusion that the goodwill within the US CGU is sensitivity of the value-in-use to reasonable variations in certain not impaired to be reasonable. significant assumptions. No impairment charge has been recorded for the year ended 31 May 2023. Refer to note 1 – General information and basis of preparation and note 12 – Goodwill for further details. Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 125IG GROUP HOLDINGS PLC Annual Report 2023 Company Information Independent Auditors’ Reportcontinued Key audit matter How our audit addressed the key audit matter OTC derivative revenue (Group) We focused firstly on understanding the control environment in which revenue is recorded. We understood and The Group’s trading revenue is still predominantly generated from evaluated the design and implementation of key controls in place and tested their operating effectiveness. over the counter (“OTC”) derivatives placed by clients, offset by net These controls included: gains or losses from the hedging trades that the Group places with external market counterparties to manage its market risk. The  IT general controls over key revenue systems in scope; Group’s revenue on these activities arises principally from spreads,  Automated business controls such as interfaces between in-scope systems, key reports and automated calculations; overnight funding charges and commissions. The audit of revenue from OTC derivatives is a focus of our audit given the magnitude of  Cash and settlement reconciliations; and the balance, the large volume of transactions and the automated  Market counterparty and other third party reconciliations. nature of the revenue calculations. We concluded that we could place reliance on these controls for the purpose of our audit. Refer to note 2 – Significant accounting policies and note 3 – Segment analysis for further details. Our substantive testing included, but was not limited to, the following:  Using data enabled auditing techniques, recalculating the revenue recorded in relation to a sample of trades and agreeing these to the underlying accounting records;  Testing commission, overnight funding, guaranteed stop premium and cash currency transfer rates on a sample basis;  Testing the valuation of selected client and broker positions to third party pricing sources;  Agreeing all cash account balances to external third-party evidence at year-end through a combination of independent confirmations and examination of bank statements;  Agreeing all amounts and balances held with market counterparties to independent confirmations or other external third party evidence; and  Testing manual client ledger postings on a sample basis. Based on the procedures performed, no material issues arose from this work. Shareholder and ### 126 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information Independent Auditors’ Reportcontinued Key audit matter How our audit addressed the key audit matter Carrying value of the investments in subsidiaries (Company) We have assessed management’s consideration of IAS 36 impairment indicators and their impairment assessment, The Company has total investments in subsidiaries of £1,087m, of which were both found to be reasonable. which the full amount is an investment in IG Group Limited (“IGGL”). We obtained management’s value-in-use calculation that was used to estimate the recoverable amount of the IGGL is the Group Holding Company which, via a series of other investment in subsidiaries and performed the following substantive procedures: holding companies, owns all the operating entities of the Group. This investment is held at cost less any provision for impairment. IAS 36  Assessed the reliability of management’s data used as inputs to management’s value-in-use calculation; requires that investments are subject to an impairment review when  Assessed the discount rate used for reasonableness; there is an indication that an asset may be impaired.  Assessed the long-term growth rate for reasonableness; and Management identified an indicator of impairment as the carrying value of the net assets of IGGL was lower than the investment in  Tested the mathematical accuracy of management’s value-in-use model. subsidiaries balance recorded in the Company, and performed an In respect of management’s assumptions, our in-house valuation experts assessed the reasonableness of the discount impairment assessment and estimated the recoverable amount using rate used in the impairment model. a value-in-use model. We concluded that the carrying value of the investment is supported by the recoverable amount of the underlying The value-in-use was determined by management to be higher than operating companies and consider the directors’ conclusion that the investment in subsidiaries balance is not impaired the fair value less costs of disposal. We have focused on this area as to be reasonable. the calculation of value-in-use involves judgement. Management’s impairment assessment showed significant headroom at year-end, We evaluated the appropriateness of the disclosures on the investment in subsidiaries in the Company Financial and consequently no impairment provision is held against this Statements and found these to be reasonable. investment. Refer to note 2 – Significant accounting policies and note 6 – Investment in subsidiaries of the Company Financial Statements for further details. How we tailored the audit scope the Group and the Company, the accounting of tastytrade, Inc. was performed by a PwC was performed by the Group engagement We performed a risk assessment, giving processes and controls, and the industry in member firm in the United States. team in London, supported by the PwC consideration to relevant external and internal which they operate. We continually assessed member firm in Poland, reflecting the The other significant financial reporting factors including industry dynamics, litigation, risks and changed the scope of our audit centralised nature of the Group’s financial component was determined to be the OTC climate change, relevant accounting and where necessary. reporting activities. Some of this work was derivative business. As the accounting regulatory developments, the Group's also relied upon by the PwC engagement The Group consists of a UK Holding Company records and related controls for both the UK, strategy and the changes taking place across team auditing tastytrade, Inc. with a number of subsidiary entities and United States and overseas businesses are the Group. We also considered our branches containing the operating businesses primarily maintained and operated by the All remaining components, which are knowledge and experience obtained in prior of both the UK, United States and overseas Group’s finance teams in London and Krakow Exchange Traded Derivative and Stock trading year audits. | | territories. Our risk assessment and scoping | this was considered one financial reporting | and investments businesses, were subject to | | --- | --- | --- | --- | | Using our risk assessment, we tailored the | identified tastytrade, Inc. as a significant | component. The technology and business | procedures which mitigated the risk of | | scope of our audit to ensure that we | component of the Group. We obtained a full | process controls that are relevant to our | material misstatement including Group level | | performed enough work to be able to give an | scope audit opinion for the financial position | financial statement audits are operated by the | analytical review procedures. | | opinion on the financial statements as a | as at 31 May 2023 and results of tastytrade, | Group in London, Krakow and Bangalore. As a | | The Company audit was performed by the whole, taking into account the structure of Inc for the year ended 31 May 2023. The audit result, the audit work over this component Group engagement team. Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 127IG GROUP HOLDINGS PLC Annual Report 2023 Company Information Independent Auditors’ Reportcontinued We asked the partner and engagement team Materiality We use performance materiality to reduce reporting to us on tastytrade, Inc. to work to The scope of our audit was influenced by our application of materiality. We set certain to an appropriately low level the probability an assigned materiality reflecting the size of quantitative thresholds for materiality. These, together with qualitative considerations, helped that the aggregate of uncorrected and the tastytrade, Inc. component. We were in us to determine the scope of our audit and the nature, timing and extent of our audit undetected misstatements exceeds active dialogue throughout the year with the procedures on the individual financial statement line items and disclosures and in evaluating overall materiality. Specifically, we use partner and engagement team responsible the effect of misstatements, both individually and in aggregate on the financial statements as performance materiality in determining for the audit, including consideration of how awhole. the scope of our audit and the nature and they planned and performed their work. extent of our testing of account balances, Based on our professional judgement, we determined materiality for the financial statements Senior members of our team undertook at classes of transactions and disclosures, for as a whole as follows: | least one in-person site visit to Krakow and | | | | example in determining sample sizes. Our | | --- | --- | --- | --- | --- | | Chicago prior to the year end. We obtained | | Financial statements – Group Financial statements – Company | | performance materiality was 75% (2022: | | direct access to their working papers to | | | | 75%) of overall materiality, amounting | | | Overall | £22,400,000 | £19,900,000 | | | oversee and review their work. We also | | | | to £16,800,000 (2022: £17,800,000) | | | materiality | (2022: £23,800,000). | (2022: £17,600,000). | | | attended meetings with tastytrade, Inc. | | | | for the Group financial statements and | | management at year-end. | How we | 5% of adjusted profit before tax 1% of total assets | | £14,900,000 (2022: £13,200,000) for | | | determinedit | | | the Company financial statements. | We continued to make use of evidence | provided by others. We used the work of PwC | Rationale for | We believe that 5% of adjusted | We have used a benchmark of | In determining the performance | | --- | --- | --- | --- | --- | | experts, for example, valuation experts for our | benchmark applied | profit before tax is an appropriate | total assets as the Company’s | materiality, we considered a number of | | work over the estimation of the recoverable | | quantitative benchmark of | primary purpose is to act as a | factors – the history of misstatements, | | amount of the US CGU – tastytrade, Inc (see | | materiality. | Holding Company with | risk assessment and aggregation risk | | related key audit matter). | | | investments in the Group’s | and the effectiveness of controls – and | A profit before tax benchmark is subsidiaries, not to generate concluded that an amount at the upper The impact of climate risk on our audit standard for listed entities like IG, operating profits and therefore end of our normal range was appropriate. As part of considering the impact of climate and has been adjusted in the a profit based measure is not change in our risk assessment, we evaluated current period to exclude income We agreed with the Audit Committee that relevant. | management's assessment of the impact of | received in relation to the Nadex | | we would report to them misstatements | | --- | --- | --- | --- | | climate risk, the detail of which is set out on | disposal, as in our opinion this is | The benchmark used is consistent | identified during our audit above £1,100,000 | | page 30, including their conclusion that there | non-recurring and does not form | with last year. | (Group audit) (2022: £1,100,000) and | | are no material risks. Management’s | part of the ongoing business | | £995,000 (Company audit) (2022: £880,000) | | assessment gave consideration to a number | performance. | | as well as misstatements below those | | of matters, including the results of their | | | amounts that, in our view, warranted | The benchmark used is consistent climate related risks and opportunities reporting for qualitative reasons. with last year. exercise that was performed during the year. We have also understood the impact of the For each component in the scope of our Group audit, we allocated a materiality that is less than Group's carbon reduction targets, which are our overall Group materiality. The range of materiality allocated across components was outlined on page 30 and these are not between £4,230,000 and £21,280,000. Certain components were audited to a local statutory considered to have a material impact on the audit materiality that was also less than our overall Group materiality. financial statements. Shareholder and ### 128 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information Independent Auditors’ Reportcontinued Conclusions relating to going concern However, because not all future events or or a material misstatement of the other of the corporate governance statement Our evaluation of the directors’ assessment of conditions can be predicted, this conclusion information. If, based on the work we have relating to the Company’s compliance with the Group's and the Company’s ability to is not a guarantee as to the Group's and performed, we conclude that there is a the provisions of the UK Corporate continue to adopt the going concern basis of theCompany's ability to continue as a material misstatement of this other Governance Code specified for our review. accounting included: goingconcern. information, we are required to report that Our additional responsibilities with respect to fact. We have nothing to report based on the corporate governance statement as other  Performing a risk assessment to identify In relation to the directors’ reporting on how these responsibilities. information are described in the Reporting on factors that could impact the going they have applied the UK Corporate other information section of this report. concern basis of accounting. Governance Code, we have nothing material With respect to the Strategic Report and to add or draw attention to in relation to the Directors' Report, we also considered Based on the work undertaken as part of our  Obtaining and evaluating management's directors’ statement in the financial whether the disclosures required by the UK audit, we have concluded that each of the going concern assessment. statements about whether the directors Companies Act 2006 have been included. following elements of the corporate  Understanding and evaluating the Group’s considered it appropriate to adopt the going governance statement is materially consistent Based on our work undertaken in the course financial forecasts and the Group’s stress concern basis of accounting. with the financial statements and our of the audit, the Companies Act 2006 testing of liquidity and capital, including knowledge obtained during the audit, and we Our responsibilities and the responsibilities of requires us also to report certain opinions and the severity of the stress scenarios that have nothing material to add or draw the directors with respect to going concern matters as described below. were used. attention to in relation to: are described in the relevant sections of Strategic Report and Directors' Report  Validation of year end financial resources thisreport.  The directors’ confirmation that they have In our opinion, based on the work undertaken such as cash and debt securities in issue. carried out a robust assessment of the Reporting on other information in the course of the audit, the information emerging and principal risks; |  Evaluating the adequacy of the disclosures | The other information comprises all of the | given in the Strategic Report and Directors' | | | --- | --- | --- | --- | | made in the Financial Statements in | information in the Annual Report other than | Report for the year ended 31 May 2023 is |  The disclosures in the Annual Report that | | relation to going concern. | the financial statements and our auditors’ | consistent with the financial statements and | describe those principal risks, what | | | report thereon. The directors are responsible | has been prepared in accordance with | procedures are in place to identify |  Consideration of the regulatory capital for the other information. Our opinion on the applicable legal requirements. emerging risks and an explanation of how andliquidity requirements applicable to financial statements does not cover the other these are being managed or mitigated; the Group. In light of the knowledge and understanding information and, accordingly, we do not of the Group and Company and their  The directors’ statement in the financial Based on the work we have performed, we express an audit opinion or, except to the environment obtained in the course of the statements about whether they considered have not identified any material uncertainties extent otherwise explicitly stated in this audit, we did not identify any material it appropriate to adopt the going concern relating to events or conditions that, report, any form of assurance thereon. misstatements in the Strategic report and basis of accounting in preparing them, individually or collectively, may cast significant In connection with our audit of the financial Directors' Report. and their identification of any material doubt on the Group's and the Company’s statements, our responsibility is to read the uncertainties to the Group’s and ability to continue as a going concern for a Directors' Remuneration other information and, in doing so, consider Company’s ability to continue to do so period of at least twelve months from when In our opinion, the part of the Directors' whether the other information is materially over a period of at least twelve months the financial statements are authorised Remuneration Report and Policy to be audited inconsistent with the financial statements or from the date of approval of the forissue. has been properly prepared in accordance our knowledge obtained in the audit, or financial statements; with the Companies Act 2006. In auditing the financial statements, we otherwise appears to be materially misstated.  The directors’ explanation as to their haveconcluded that the directors’ use of If we identify an apparent material Corporate governance statement assessment of the Group's and Company’s thegoing concern basis of accounting in inconsistency or material misstatement, The Listing Rules require us to review the prospects, the period this assessment thepreparation of the financial statements we are required to perform procedures to directors’ statements in relation to going covers and why the period is appropriate; isappropriate. conclude whether there is a material concern, longer-term viability and that part and misstatement of the financial statements Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 129IG GROUP HOLDINGS PLC Annual Report 2023 Company Information Independent Auditors’ Reportcontinued  The directors’ statement as to whether  The section of the Annual Report describing misstatement, whether due to fraud or error, estimates. The Group engagement team they have a reasonable expectation that the work of the Audit Committee. and to issue an auditors’ report that includes shared this risk assessment with the the Company will be able to continue in our opinion. Reasonable assurance is a high component auditors so that they could We have nothing to report in respect of our operation and meet its liabilities as they fall level of assurance, but is not a guarantee that include appropriate audit procedures in responsibility to report when the directors’ due over the period of its assessment, an audit conducted in accordance with ISAs response to such risks in their work. Audit statement relating to the Company’s including any related disclosures drawing (UK) will always detect a material procedures performed by the Group compliance with the Code does not properly attention to any necessary qualifications misstatement when it exists. Misstatements engagement team and/or component disclose a departure from a relevant provision or assumptions. can arise from fraud or error and are auditors included: of the Code specified under the Listing Rules considered material if, individually or in the Our review of the directors’ statement for review by the auditors.  Enquiries of management, internal audit, aggregate, they could reasonably be regarding the longer-term viability of the and those charged with governance in Responsibilities for the financial statements expected to influence the economic decisions Group and Company was substantially less in relation to known or suspected instances and the audit of users taken on the basis of these financial scope than an audit and only consisted of of non-compliance with laws and Responsibilities of the directors for the statements. making inquiries and considering the regulation and fraud; financial statements directors’ process supporting their statement; Irregularities, including fraud, are instances of As explained more fully in the Statement of  Review of correspondence with regulators, checking that the statement is in alignment non-compliance with laws and regulations. Directors' Responsibilities, the directors are and internal audit reports in so far as they with the relevant provisions of the UK We design procedures in line with our responsible for the preparation of the are related to the Financial Statements; Corporate Governance Code; and responsibilities, outlined above, to detect financial statements in accordance with the considering whether the statement is material misstatements in respect of  Specific written enquiries of external legal applicable framework and for being satisfied consistent with the financial statements and irregularities, including fraud. The extent to counsel to assist with our evaluation of that they give a true and fair view. The our knowledge and understanding of the which our procedures are capable of known instances of non-compliance with directors are also responsible for such Group and Company and their environment detecting irregularities, including fraud, is laws and regulations, including their internal control as they determine is obtained in the course of the audit. detailed below. potential impact; necessary to enable the preparation of In addition, based on the work undertaken as financial statements that are free from Based on our understanding of the Group and  Challenging assumptions and judgements part of our audit, we have concluded that material misstatement, whether due to fraud industry, we identified that the principal risks made by management in its significant each of the following elements of the or error. of non-compliance with laws and regulations accounting estimates, in particular in corporate governance statement is materially related to breaches of the rules of the relation to the carrying value of the In preparing the financial statements, the consistent with the financial statements and Financial Conduct Authority, and we goodwill and the investment in subsidiaries directors are responsible for assessing the our knowledge obtained during the audit: considered the extent to which non- (see related key audit matters); Group’s and the Company’s ability to continue compliance might have a material effect on  The directors’ statement that they as a going concern, disclosing, as applicable,  Identifying and testing journal entries, the financial statements. We also considered consider the Annual Report, taken as matters related to going concern and using including those posted to certain account those laws and regulations that have a direct a whole, is fair, balanced and the going concern basis of accounting unless combinations, posted with certain impact on the financial statements such as understandable, and provides the the directors either intend to liquidate the descriptions, backdated journals or posted the Companies Act 2006 and relevant tax information necessary for the members Group or the Company or to cease by unexpected users; legislation. We evaluated management’s to assess the Group’s and Company's operations, or have no realistic alternative but incentives and opportunities for fraudulent  Incorporating unpredictability into the position, performance, business model to do so. manipulation of the financial statements nature, timing and/or extent of our testing; and strategy; Auditors’ responsibilities for the audit of the (including the risk of override of controls), and and  The section of the Annual Report that financial statements determined that the principal risks were describes the review of effectiveness of Our objectives are to obtain reasonable related to posting inappropriate journal risk management and internal control assurance about whether the financial entries to increase revenue or reduce costs systems; and statements as a whole are free from material and management bias in accounting Shareholder and ### 130 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information Independent Auditors’ Reportcontinued |  Review of reporting to the Audit | Use of this report | Appointment | | --- | --- | --- | | Committee and minutes of Board of | This report, including the opinions, has been | We were appointed by the directors on | | Directors' meetings and made enquiries of | prepared for and only for the Company’s | 8 December 2010 to audit the financial | | management to understand the business | members as a body in accordance with | statements for the year ended 31 May 2011 | | rationale for unusual and significant | Chapter 3 of Part 16 of the Companies Act | and subsequent financial periods. The period | | transactions. | 2006 and for no other purpose. We do not, in | of total uninterrupted engagement is 13 | | | giving these opinions, accept or assume | years, covering the years ended 31 May 2011 | There are inherent limitations in the audit responsibility for any other purpose or to any to 31 May 2023. procedures described above. We are less other person to whom this report is shown or likely to become aware of instances of non- into whose hands it may come save where compliance with laws and regulations that are Other matter expressly agreed by our prior consent not closely related to events and transactions In due course, as required by the Financial inwriting. | reflected in the financial statements. Also, the | | Conduct Authority Disclosure Guidance and | | --- | --- | --- | | risk of not detecting a material misstatement | | Transparency Rule 4.1.14R, these financial | | due to fraud is higher than the risk of not | Other required reporting | statements will form part of the ESEF- | | detecting one resulting from error, as | Companies Act 2006 exception reporting | prepared annual financial report filed on the | | fraud may involve deliberate concealment | Under the Companies Act 2006 we are | National Storage Mechanism of the Financial | | by, for example, forgery or intentional | required to report to you if, in our opinion: | Conduct Authority in accordance with the | | misrepresentations, or through collusion. | | ESEF Regulatory Technical Standard ("ESEF |  we have not obtained all the information RTS"). This auditors’ report provides no Our audit testing might include testing and explanations we require for our assurance over whether the annual financial complete populations of certain transactions audit; or report will be prepared using the single and balances, possibly using data auditing  adequate accounting records have not electronic format specified in the ESEF RTS. techniques. However, it typically involves been kept by the Company, or returns selecting a limited number of items for adequate for our audit have not been Carl Sizer (Senior Statutory Auditor) testing, rather than testing complete received from branches not visited by for and on behalf of PricewaterhouseCoopers LLP populations. We will often seek to target us; or Chartered Accountants and Statutory Auditors particular items for testing based on their size London or risk characteristics. In other cases, we will  certain disclosures of directors’ 19 July 2023 use audit sampling to enable us to draw a remuneration specified by law are not conclusion about the population from which made; or the sample is selected.  the Company financial statements and the A further description of our responsibilities part of the Directors' Remuneration Report for the audit of the financial statements is and Policy to be audited are not in located on the FRC’s website at: www.frc.org. agreement with the accounting records uk/auditorsresponsibilities. This description and returns. forms part of our auditors’ report. We have no exceptions to report arising from this responsibility. IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and Company Information < > 131 # Financial Statements # Primary Statements | Consolidated Income Statement | 132 | | --- | --- | | Consolidated Statement of Comprehensive Income | 133 | | Consolidated Statement of Financial Position | 134 | | Consolidated Statement of Changes in Equity | 135 | | Consolidated Statement of Cash Flows | 136 | # Notes to the Financial Statements | 1. General information and basis of preparation | 137 | | --- | --- | | 2. Significant accounting policies | 138 | | 3. Segmental analysis | 146 | | 4. Operating costs | 148 | | 5. Auditor/ remuneration | 148 | | 6. Staff costs | 149 | | 7. Finance income | 149 | | 8. Finance costs | 149 | | 9. Taxation | 150 | | 10. Earnings per ordinary share | 152 | | 11. Dividends paid and proposed | 153 | | 12. Goodwill | 153 | | 13. Intangible assets | 155 | | 14. Property, plant and equipment | 156 | | 15. Financial investments and financial assets pledged as collateral | 157 | | 16. Cash and cash equivalents | 157 | | 17. Trade receivables | 157 | | 18. Other assets | 158 | | 19. Debt securities in issue | 158 | | 20. Lease liabilities | 158 | | 21. Trade payables | 158 | | 22. Other payables | 159 | | 23. Contingent liabilities and provisions | 159 | | 24. Share capital and share premium | 159 | | 25. Other reserves | 160 | | 26. Employee share plans | 161 | | 27. Related party transactions | 165 | | 28. Financial instruments | 166 | | 29. Financial risk management | 170 | | 30. Cash flow information | 175 | | 31. Business acquisition | 176 | | 32. Discontinued operations | 176 | | 33. Investment in associates | 177 | | 34. Investments in subsidiaries | 178 | | 35. Subsequent events | 180 | ![img-4.jpeg](img-4.jpeg) Shareholder and ### 132 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information Financial Statements ## Consolidated Income Statement ### for the year ended 31 May 2023 | | Year ended | | Year ended | | | --- | --- | --- | --- | --- | | | 31 May 2023 | | 31 May 2022 | | | Note | | £m | | £m | Continuing operations Trading revenue 949.7 982.0 Introducing partner commissions (7.9) (9.7) Net trading revenue 3 941.8 972.3 Betting duty and financial transaction taxes (10.4) (2.5) Interest income on client funds 81.8 3.5 Interest expense on client funds (1.0) (2.7) Other operating income 11.2 8.6 Net operating income 1,023.4 979.2 Operating costs 4 (583.8) (499.2) Net credit losses on financial assets 29 (1.1) (2.7) Operating profit 438.5 477.3 Finance income 7 30.2 3.4 Finance costs 8 (16.2) (14.8) Gain on disposal of associates – 4.1 Share of loss after tax from associates 33 (2.6) (2.3) Fair value gain on convertible loan note – 9.3 Profit before tax 449.9 477.0 Tax expense 9 (86.2) (80.9) Profit for the year from continuing operations 363.7 396.1 Profit for the year from discontinued operations 32 1.3 107.8 Profit for the year attributable to owners of the parent 365.0 503.9 Earnings per ordinary share for profit from continuing operations: Basic 10 86.9p 92.9p Diluted 10 86.1p 92.1p Earnings per ordinary share for profit attributable to owners of the parent: Basic 10 87.2p 118.2p Diluted 10 86.4p 117.2p IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and^{}[] Company Information < > 133 Financial Statements continued ## Consolidated Statement of Comprehensive Income for the year ended 31 May 2023 | | Year ended 31 May 2023 | | Year ended 31 May 2022 | | | --- | --- | --- | --- | --- | | | £m | £m | £m | £m | | **Profit for the year** | | **365.0** | | 503.9 | | Other comprehensive income | | | | | | Items that may be subsequently reclassified to the Consolidated Income Statement: | | | | | | Changes in the fair value of financial assets held at fair value through other comprehensive income, net of tax | (11.9) | | (4.0) | | | Foreign currency translation gain attributable to continuing operations | 3.2 | | 67.4 | | | Foreign currency translation loss attributable to discontinued operations | - | | (3.0) | | | Other comprehensive (loss)/income for the year, net of tax | | (8.7) | | 60.4 | | **Total comprehensive income for the year** | | **356.3** | | 564.3 | | **Total comprehensive income attributable to owners of the parent arising from:** | | | | | | Continuing operations | | 355.0 | | 459.5 | | Discontinued operations | | 1.3 | | 104.8 | | | | **356.3** | | 564.3 | Shareholder and ### 134 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information Financial Statementscontinued ## Consolidated Statement of Financial Position ### as at 31 May 2023 | | | 31 May 2023 | | 31 May 2022 | | | | 31 May 2023 | | 31 May 2022 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Note | | £m | | £m | | Note | | £m | | £m | | Assets | | | | | | Liabilities | | | | | | | Non-current assets | | | | | | Non-current liabilities | | | | | | | Goodwill 12 611.0 604.7 | | | | | | Debt securities in issue 19 297.6 297.2 | | | | | | | Intangible assets 13 276.5 292.1 | | | | | | Other payables 1.2 – | | | | | | | Property, plant and equipment 14 36.1 36.6 | | | | | | Lease liabilities 20 13.3 13.0 | | | | | | | Financial investments 15 379.6 134.8 | | | | | | Deferred income tax liabilities 9 60.8 67.2 | | | | | | Financial assets pledged as collateral 15 – 25.3 372.9 377.4 Investment in associates 33 12.5 14.8 | Other investments 1.2 – | Current liabilities | | --- | --- | | Prepayments 0.3 – | Trade payables 21 478.0 571.2 | | Deferred income tax assets 9 23.2 17.5 | Other payables 22 116.2 119.5 | Lease liabilities 20 7.4 8.9 1,340.4 1,125.8 Income tax payable 9 6.1 20.5 Current assets 607.7 720.1 Cash and cash equivalents 16 798.5 1,246.4 Trade receivables 17 570.4 469.5 Liabilities directly associated with assets classified as held for sale – 0.8 Financial investments 15 226.8 200.9 Financial assets pledged as collateral 15 – 35.1 TOTAL LIABILITIES 980.6 1,098.3 Other assets 18 15.0 14.2 Prepayments 25.3 23.2 Equity Other receivables 10.0 9.8 Share capital and share premium 24 125.8 125.8 Income tax receivable 9 8.8 – Translation reserve 120.8 117.6 1,654.8 1,999.1 Merger reserve 590.0 590.0 Other reserves 25 (16.9) 8.4 Assets classified as held for sale – 1.2 Retained earnings 1,194.9 1,186.0 TOTAL ASSETS 2,995.2 3,126.1 TOTAL EQUITY 2,014.6 2,027.8 TOTAL EQUITY AND LIABILITIES 2,995.2 3,126.1 The Consolidated Financial Statements on pages 132–180 were approved by the Board of Directors on 19 July 2023 and signed on its behalf by: Charles A. Rozes Chief Financial Officer Registered Company number: 04677092 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and Company Information < > 135 Financial Statements continued ## Consolidated Statement of Changes in Equity for the year ended 31 May 2023 | | Note | Share capital £m | Share premium £m | Translation reserve £m | Merger reserve £m | Other reserves £m | Retained earnings £m | Total £m | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | **At 1 June 2021** | | - | 125.8 | 53.2 | 81.0 | 12.8 | 860.5 | 1,133.3 | | 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 | 25 | - | - | - | - | (6.7) | - | (6.7) | | Transfer of vested awards from the share-based payment reserve | 25 | - | - | - | - | (7.3) | 7.3 | - | | Equity-settled employee share-based payments | 26 | - | - | - | - | 13.6 | - | 13.6 | | Issue of ordinary share capital for the acquisition of tastytrade | | - | - | - | 509.0 | - | - | 509.0 | | **At 31 May 2022** | | - | 125.8 | 117.6 | 590.0 | 8.4 | 1,186.0 | 2,027.8 | | **At 1 June 2022** | | - | 125.8 | 117.6 | 590.0 | 8.4 | 1,186.0 | 2,027.8 | | Profit for the year and attributable to owners of the parent | | - | - | - | - | - | 365.0 | 365.0 | | Other comprehensive (loss)/income for the year | | - | - | 3.2 | - | (11.9) | - | (8.7) | | Total comprehensive income/(loss) for the year | | - | - | 3.2 | - | (11.9) | 365.0 | 356.3 | | Tax recognised directly in equity on share-based payments | 9 | - | - | - | - | - | 1.0 | 1.0 | | Equity dividends paid | 11 | - | - | - | - | - | (188.1) | (188.1) | | Share buyback | | - | - | - | - | (2.1) | (176.6) | (178.7) | | Employee Benefit Trust purchase of own shares | 25 | - | - | - | - | (14.6) | - | (14.6) | | Transfer of vested awards from the share-based payment reserve | 25 | - | - | - | - | (7.6) | 7.6 | - | | Equity-settled employee share-based payments | 26 | - | - | - | - | 13.3 | - | 13.3 | | Share-based payments converted to cash-settled liabilities | | - | - | - | - | (2.4) | - | (2.4) | | **At 31 May 2023** | | - | 125.8 | 120.8 | 590.0 | (16.9) | 1,194.9 | 2,014.6 | Shareholder and ### 136 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information Financial Statementscontinued ## Consolidated Statement of Cash Flows ### for the year ended 31 May 2023 | | Year ended | | Year ended | | | --- | --- | --- | --- | --- | | | 31 May 2023 | | 31 May 2022 | | | Note | | £m | | £m | Operating activities 1 Cash generated from operations 30 221.4 810.6 Interest received on client funds 75.8 3.5 Interest paid on client funds (1.0) (2.7) Income taxes paid (116.6) (99.2) Net cash flows generated from operating activities 179.6 712.2 Investing activities Interest received 25.6 3.2 Net cash flow to investment in associates – (1.9) Purchase of property, plant and equipment (11.6) (8.5) Payments to acquire and develop intangible assets (14.6) (9.0) Net proceeds from disposal of subsidiaries 32 1.8 143.3 Net proceeds from disposal of investments in associates 0.2 24.5 Net cash flow from financial investments (225.8) (57.1) Net cash flow to acquire subsidiaries (4.8) (193.5) Net cash flows used in investing activities (229.2) (99.0) Financing activities Interest paid (12.2) (11.0) Financing fees paid (3.2) (5.4) Interest paid on lease liabilities (0.5) (0.6) Repayment of principal element of lease liabilities (7.1) (7.5) Drawdown on term loan – 150.0 Repayment of term loans – (250.0) Net proceeds from issue of debt securities – 299.2 Payments made for share buyback (175.2) – Equity dividends paid to owners of the parent 11 (188.1) (186.2) Employee Benefit Trust purchase of own shares (14.6) (6.7) Net cash flows used in financing activities (400.9) (18.2) Net (decrease)/increase in cash and cash equivalents (450.5) 595.0 Cash and cash equivalents at the beginning of the year 1,246.4 655.2 Impact of movement in foreign exchange rates (0.7) (3.8) Cash and cash equivalents at the end of the year 16 795.2 1,246.4 1 Cash generated from operations includes cash generated from both continuing and discontinued operations and excludes net interest on client funds IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and^{}[] Company Information 137 Financial Statements continued # 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 2023 were authorised for issue by the Board on 19 July 2023 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) The Group 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 2023 affecting these consolidated Group Financial Statements. These Financial Statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets and financial liabilities 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 2023 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 judgements and estimates that affect the application of accounting policies and the amounts reported for assets and liabilities as at the reporting date, and the amounts reported for revenue and expenses during the year. The nature of estimates and judgements means that actual outcomes could differ from those estimates and judgements. 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 Group Financial Statements are the following: *Recoverable amount of US cash-generating unit (CGU) (estimate)* – The Group has estimated the recoverable amount of its US CGU, which includes goodwill of £509.2 million (31 May 2022: £502.8 million) and other acquisition-related intangibles. 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 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 12. #### (c) New accounting standards and interpretations There were no new standards, amendments or interpretations issued and made effective during the current year 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 amendments to IFRSs that are effective for annual reporting periods beginning on or after 1 January 2023. These include amendments published to IFRS 16 – Leases, IFRS 3 – Business Combinations, IAS 12 – Income Taxes, IAS 37 – Contingent Liabilities and IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors. The Group has assessed the impact of these amendments and expects they will not have a material impact, when adopted, on the Group Financial Statements. #### (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 total revenue as the primary measure of performance of the various segments of the Group. Further information regarding alternative performance measure has been provided in note 3. #### (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 Consolidated Income Statement. Non-monetary assets and liabilities 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 the 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 the translation reserve. On disposal of an overseas operation, exchange differences previously recognised in other comprehensive income are recycled to the Consolidated Income Statement as income or expense. 138 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and^{}[] Company Information # Financial Statements continuedNotes to the Financial Statements continued # **1. General information and basis of preparation continued** # **(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 Group Financial Statements. The Group meets its day-to-day working capital requirements through its available liquid assets and debt 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 Group 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 considers 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 Group Financial Statements. # **(g) Business acquisition** On 29 March 2023, the Group acquired the entire share capital of Small Exchange, Inc. (Small Exchange). The results of Small Exchange have been consolidated in the Group since the date of acquisition. Where necessary, comparative information is presented in US dollars alongside sterling. Further details are disclosed in note 31. # **(h) Reclassification of comparatives** To ensure consistency with the current period, comparative figures have been reclassified where the presentation of the Consolidated Financial Statements has been changed. The adjustments are: (i) Interest received on client funds of £81.8 million (31 May 2022: £3.5 million) and interest paid on client funds of £1.0 million (31 May 2022: £2.7 million) have been presented as separate line items in the Consolidated Statement of Cash Flows, as well as in note 30 cash flow information. (ii) The ordering of the financial statement line items in the Consolidated Income Statement has been updated in the current year, to reflect a more appropriate presentation given changes in the business. As a result of changing interest rates, finance income (31 May 2023: £30.2 million; 31 May 2022: £3.4 million) and finance costs (31 May 2023: £16.2 million; 31 May 2022: £14.8 million) have become more significant. Accordingly, these line items are now presented immediately below the operating profit line. # **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 2022, except the following accounting policies adopted due to new transactions in the year: ¼ Equity arising from transactions with shareholders (Share capital) ¼ Notional pooling arrangement (Cash and cash equivalents) # **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 34. 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 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 results of subsidiaries to align the accounting policies used with those used by 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 Consolidated 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 Consolidated Income Statement in the year of acquisition. The results of subsidiaries acquired or disposed of during the year are included in the Consolidated Income Statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 139IG GROUP HOLDINGS PLC Annual Report 2023 Company Information Financial Statementscontinued Notes to the Financial Statementscontinued 2. Significant accounting policiescontinued Investment 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 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 of the joint venture which is recognised from the date that joint control begins, up until the date that joint control ceases. 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 Consolidated 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. 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. OTC derivatives Revenue from OTC derivatives 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 28. Revenue from OTC derivatives is recognised on a trade-date basis. Exchange traded derivatives Revenue from exchange traded derivatives represents: i) fee and commission income earned through facilitation of client trades; and 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 client trades and the administration of client assets. 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. Interest income and expense Interest income and expense is accrued on a time basis, by reference to the principal amount outstanding and at the applicable interest rate. Interest income and expense on client funds held with banks and clearing brokers are included in net operating income, which is consistent with the nature of the Group’s operations. Finance income and costs All interest income and costs other than interest income and expense on client funds, are disclosed within finance income and costs. Further details are disclosed in note 7 and note 8 respectively. Dividends Dividends declared but not yet distributed to the Company’s shareholders are recognised as a liability 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 Consolidated 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. Shareholder and ### 140 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information Financial Statementscontinued 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 consider specific financial and non-financial measures. Liabilities for the Group’s cash-settled portion of the Sustained Performance Plan are recognised as variable remuneration over the relevant service period and are 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 right-of-use asset with a corresponding lease liability from the lease commencement date. 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 Lease payments made at or before the commencement date less any lease incentives received ¼ 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 in the Consolidated Income Statement. 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 Consolidated 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. 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 Consolidated 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 within 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. Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 141IG GROUP HOLDINGS PLC Annual Report 2023 Company Information Financial Statementscontinued Notes to the Financial Statementscontinued 2. Significant accounting policiescontinued 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 – over the lease term of up to 15 years Office equipment, fixtures and fittings – over 5 years Computer and other equipment – over 2, 3 or 5 years Right-of-use asset – 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. The amount of write-down is immediately charged to the Consolidated Income Statement. 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 Consolidated 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 Consolidated 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. 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 assets are identifiable and under the Group’s control ¼ The costs in relation to the project can be accurately measured ¼ The project’s technical feasibility and commercial viability can be demonstrated ¼ The availability of adequate technical and financial resources ¼ Management’s intention to complete the project has been confirmed ¼ Probable future economic benefit has been established Research and development expenditure on internally developed intangible assets, which do not meet these criteria is taken to the Consolidated Income Statement in the year in which it is incurred. Intangible assets with a finite life are amortised over their expected useful lives on a straight- line basis, as follows: Internally developed software – over 3 to 5 years Software and licences – over the contract term of up to 5 years Trade names – 2 to 15 years Customer relationships – 9 years Non-compete arrangements – 5 years Domain names – 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. Shareholder and ### 142 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information Financial Statementscontinued Notes to the Financial Statementscontinued 2. Significant accounting policiescontinued 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 in the Consolidated Income Statement 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 under IFRS 9 – Financial Instruments and re-evaluates this designation annually. The classification of financial assets takes into consideration the Group’s business model for managing those financial assets and the nature of their contractual cash flows. 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 liabilities is measured net of directly attributable transaction costs. Financial instruments are disclosed in note 28 of the Group Financial Statements. (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), money market funds, trade payables (excluding amounts due to clients) and other investments. 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 Consolidated 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 than amounts due from brokers), other receivables, cash and cash equivalents and fixed term deposits that are categorised under financial investments. Interest on financial assets measured at amortised cost 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 and 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 financial asset 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. Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 143IG GROUP HOLDINGS PLC Annual Report 2023 Company Information Financial Statementscontinued Notes to the Financial Statementscontinued 2. Significant accounting policiescontinued Unrealised gains or losses, other than loss allowances for expected credit losses, arising from financial assets 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 assets are sold, collected or otherwise disposed of. On disposal of a financial asset, the accumulated unrealised gain or loss included in equity is recycled to the Consolidated Income Statement for the period and reported in gains/losses from FVOCI reserve on disposal of financial assets. Gains and losses on disposal are determined using the fair value of the asset at the date of derecognition. Interest on financial assets is included in finance income and calculated 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. UK Government securities held by the Group where brokers have the right to rehypothecate the assets are separately recognised as ‘financial assets pledged as collateral’ on the Statement of Financial Position. (d) Financial liabilities The Group’s financial liabilities include trade payables, lease liabilities, debt securities in issue 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 open derivative element of trade payables, which is measured at fair value through profit or loss. 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 Consolidated Income Statement. (e) Determination of fair value Financial instruments arising from client positions, financial derivative included in trade receivables (due from brokers), trade payables (excluding amounts due to clients), money market funds, 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 Consolidated 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 Contracts 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. Shareholder and ### 144 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information Financial Statementscontinued Notes to the Financial Statementscontinued 2. Significant accounting policiescontinued 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 Consolidated Income Statement. Derecognition of financial assets and liabilities A financial asset or liability is 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. 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. Offsetting financial instruments Assets or liabilities resulting from gains or losses on financial derivatives are carried at fair value. Amounts due from or to clients are offset with the net amount reported in the Consolidated Statement of Financial Position. Similarly, amounts due from and to brokers are offset, also presented net on the Consolidated 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 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. 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. 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. 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. For all other trade receivables, the general approach has been applied for measuring impairment. Other assets Other assets represent rights to cryptocurrency assets controlled by the Group. The Group offers financial derivatives with cryptocurrency as an underlying asset. The Group purchases and sells cryptocurrency assets as part of its hedging activity associated with offering for products. 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 Consolidated Income Statement in the period in which they arise. Cryptocurrency assets are not financial instruments, and they are categorised as non-financial assets. The Group also act as a broker for the custody and trade of cryptocurrency related assets. The Group does not provide custody or safeguarding services in relation to these assets. Customers are instead required to contract directly with a third party custodian for the custody of their cryptocurrency assets. The cryptocurrency assets where the Group acts as a broker are not recognised on the Consolidated Statement of Financial Position. Other receivables Other receivables are the 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. Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 145IG GROUP HOLDINGS PLC Annual Report 2023 Company Information Financial Statementscontinued Notes to the Financial Statementscontinued 2. Significant accounting policiescontinued 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 of 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. Cash and cash equivalents Cash comprises of cash on hand and demand deposits which may be accessed within 90 days without penalty. Cash equivalents are 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 Group deposits a certain amount of its own cash into segregated client money accounts as buffers to prevent shortfalls. As the Group retains rights to these balances, they are recognised on the Statement of Financial Position within trade receivables. These buffer balances do not meet the criteria for cash and cash equivalents. 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 whether there has been a significant increase in credit risk since initial recognition. 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. Segregated client funds are held in segregated client money accounts which are held off- balance sheet. The Group’s ability to control these funds is restricted by local client money regulations. Furthermore, the Group is not exposed to credit risk in the event of insolvency of the financial institutions in which the funds are held, nor is the Group able to use these funds for its own operations. Client 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 recognised with cash and cash equivalents with a corresponding liability to clients within trade payables. Fixed term deposits do not meet the criteria of cash and cash equivalents under IAS 7 – Statement of Cash Flows 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. The Group has a notional multi-currency pooling arrangement (the Pool), where there is no legally enforceable right to offset the amounts due to the Pool against the amounts due from the Pool across different currencies, nor is there an intention for settlement to take place on a net basis, the Group shows a gross presentation for these balances on the Consolidated Statement of Financial Position. The balance due to the Pool is included in other payables. Please refer to note 22 for further details of this arrangement. Other payables Non-derivative financial liabilities are recognised initially at fair value and subsequently measured 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. Contingent liabilities are assessed continually to determine whether an outflow of economic benefits has become probable. If it becomes probable that an outflow of future economic benefits will be required for an item previously dealt with as a contingent liability, a provision is recognised in the financial statements of the period in which the change in probability occurs. 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 Consolidated Income Statement over the period of borrowings. Shareholder and ### 146 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information Financial Statementscontinued Notes to the Financial Statementscontinued 2. Significant accounting policiescontinued 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 Consolidated Income Statement over the lifetime of the security using the effective interest rate method. Transaction fees are recognised on the Consolidated 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 for the Group is presented as a liability on the Consolidated Statement of Financial Position; 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 Consolidated Income Statement. Equity instruments issued by the Company are recorded as the proceeds are 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 Consolidated 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 Consolidated 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 Consolidated 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. (d) Equity arising from transactions with shareholders Upon entering into a contract with a bank or broker which includes an obligation for that bank or broker to acquire the Company’s own shares, a financial liability is recognised at the present value of the amount payable to the bank or broker, taking into consideration the contractual terms of the broker agreement, with a corresponding debit to the share buyback reserve, which is included within other reserves. Following initial recognition, the financial liability is measured in accordance with the Group’s existing accounting policies for financial liabilities. The amount recognised in the share buyback reserve is reduced by the consideration paid for the purchase of own shares and transferred to retained earnings. The amount of the Group’s issued share capital is reduced by the nominal value of the shares repurchased and transferred to the capital redemption reserve, which forms part of other reserves. Where the contract to repurchase shares expires prior to completing the repurchase, and incomplete delivery of the shares has taken place, the remaining balance recognised in the share buyback reserve is reversed along with the remaining financial liability. Any consideration paid to acquire own shares which exceeds the amount initially recognised is a transaction related cost and recognised directly in equity. 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 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. The CODM are presented a view of total revenue split by product. Total revenue is an alternative performance measure which comprises of net trading revenue and net interest on client funds. In the prior year, the CODM were presented with a view of net trading revenue split by product. This change is due to net interest on client funds being a more significant source of revenue for the year ended 31 May 2023. The presentation for prior year comparatives has been updated to reflect this. IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and Company Information 147 # Financial Statements continued Notes to the Financial Statements continued # **3. Segmental analysis continued** # **Total revenue by reportable segment** Net trading revenue represents trading revenue that the Group generates from client trading activity after deducting introducing partner commissions. Net interest on client funds represents interest earned on segregated client money balances after deducted interest paid in relation to the same balances. These two balances collectively make up total revenue earned for the Group. The CODM uses total 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, stock trading and investments and net interest on client funds. The products shown in the segmental analysis are aggregated where these products are economically similar in nature. The segmental breakdown of total revenue is as follows: | | Year ended 31 May 2023 £m | Year ended 31 May 2022 £m | | --- | --- | --- | | OTC derivatives | 782.0 | 817.3 | | Exchange traded derivatives | 137.1 | 121.2 | | Stock trading and investments | 22.7 | 33.8 | | **Net trading revenue** | **941.8** | **972.3** | | Net interest on client funds | 80.8 | 0.8 | | **Total revenue from continuing operations^{1}** | **1,022.6** | **973.1** | | **Total revenue from discontinued operations^{1}** | **-** | **9.4** | $^{1}$ Please refer to Appendix I for reconciliation to the Consolidated Income Statement. 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. | | Year ended 31 May 2023 £m | Year ended 31 May 2022 £m | | --- | --- | --- | | **Net trading revenue by geography** | | | | UK | 322.0 | 365.3 | | Japan | 99.3 | 98.5 | | Australia | 99.8 | 96.2 | | Singapore | 68.8 | 74.1 | | EMEA Non-EU | 55.3 | 53.5 | | Emerging markets | 39.5 | 43.2 | | **UK, APAC & Emerging markets** | **684.7** | **730.8** | | US | 140.9 | 128.6 | | EU | 116.2 | 112.9 | | **Net trading revenue** | **941.8** | **972.3** | | Net interest on client funds – US | 50.4 | 1.9 | | Net interest on client funds – Other | 30.4 | (1.1) | | **Total revenue from continuing operations** | **1,022.6** | **973.1** | | **Total revenue from discontinued operations** | **-** | **9.4** | The Group does not derive more than 10% of revenue from any one single client. In relation to prior year comparative information, the UK geographic segment, and the OTC derivatives segment, includes a £5.8 million foreign exchange gain arising from financing of the tastytrade acquisition in prior year. No such gains have been recognised in the current year. 148 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and Company Information # Financial Statements continued Notes to the Financial Statements continued # **3. Segmental analysis continued** 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: | | 31 May 2023 £m | 31 May 2022 £m | | --- | --- | --- | | US | 770.7 | 795.1 | | UK | 152.6 | 133.8 | | EU | 5.7 | 5.5 | | EMEA Non-EU | 4.7 | 7.3 | | Australia | 0.4 | 0.8 | | Japan | 1.9 | 0.8 | | Singapore | 0.3 | – | | Emerging markets | 0.1 | 3.4 | | **Total non-current assets** | **936.4** | **946.7** | # **4. Operating costs** | | Note | Year ended 31 May 2023 £m | Year ended 31 May 2022 £m | | --- | --- | --- | --- | | **Employee-related expenses** | | | | | Fixed remuneration | | 193.0 | 151.5 | | Variable remuneration | | 55.6 | 62.7 | | | | **248.6** | **214.2** | | Advertising and marketing | | 93.5 | 87.2 | | Premises-related costs | | 10.8 | 9.1 | | IT, market data and communications | | 51.9 | 45.1 | | Trading related costs | | 38.7 | 32.5 | | Legal and professional costs | | 25.8 | 19.6 | | Regulatory fees | | 8.5 | 12.9 | | Depreciation and amortisation | 13,14 | 61.6 | 56.5 | | Other costs | | 44.4 | 22.1 | | **Total operating costs from continuing operations** | | **583.8** | **499.2** | | **Total operating costs from discontinued operations** | | **0.2** | **9.9** | Trade related costs of £38.7 million as at 31 May 2023 (31 May 2022: £32.5 million), which were previously presented in the other costs line, are now presented as a separate line item. This presentation better reflects the nature of these costs. Included in premises-related costs is £0.6 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 2022: £0.5 million). # **5. Auditors' remuneration** | | Year ended 31 May 2023 £m | Year ended 31 May 2022 £m | | --- | --- | --- | | **Audit fees** | | | | Parent | 1.3 | 1.2 | | Subsidiaries | 1.4 | 1.1 | | **Total audit fees** | **2.7** | **2.3** | | **Audit related fees** | | | | Services supplied pursuant to legislation | 0.6 | 0.6 | | **Total audit related fees** | **0.6** | **0.6** | | **Non-audit fees** | | | | Other services | 0.2 | 0.3 | | **Total non-audit fees** | **0.2** | **0.3** | 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. IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and^{}[] Company Information < > 149 # Financial Statements continued # Notes to the Financial Statements continued # 6. Staff costs Staff costs for the year, including Directors, were as follows: | | Year ended 31 May 2023 £m | Year ended 31 May 2022 £m | | --- | --- | --- | | Wages and salaries, performance-related bonus and share-based payment awards | 214.9 | 185.1 | | Social security costs | 23.2 | 20.2 | | Other pension costs | 10.5 | 8.9 | | **Total staff costs from continuing operations** | **248.6** | **214.2** | | **Total staff costs from discontinued operations** | **-** | **4.5** | 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 2023 and 31 May 2022 is set out in the Directors' Remuneration Report on page 89. The average monthly number of employees, including Directors, split into the key activity areas was as follows: | | Year ended 31 May 2023 | Year ended 31 May 2022 | | --- | --- | --- | | Marketing | 362 | 315 | | Sales and client management | 426 | 439 | | Technology and change management | 1,119 | 977 | | Trading and operations | 342 | 321 | | Support functions | 416 | 372 | | | **2,665** | **2,424** | The Group has changed the categorisation of functions by which it splits employees in order to better reflect the activities carried out. The comparative number of average employees has been restated based on this new categorisation. The total number of average employees remains unchanged. # 7. Finance income | | Year ended 31 May 2023 £m | Year ended 31 May 2022 £m | | --- | --- | --- | | Bank interest receivable | 7.5 | 1.5 | | Interest receivable on cash held at brokers | 5.9 | 0.8 | | Interest receivable on financial investments | 9.1 | 0.4 | | Interest receivable on money market funds | 7.6 | 0.3 | | Other interest | 0.1 | 0.4 | | | **30.2** | **3.4** | # 8. Finance costs | | Year ended 31 May 2023 £m | Year ended 31 May 2022 £m | | --- | --- | --- | | Interest and fees on debt securities | 10.0 | 5.3 | | Term loan interest and fees | - | 3.5 | | Revolving credit facility interest and fees | 2.7 | 1.6 | | Interest and fees on sale and repurchase agreements | 0.2 | - | | Interest payable to brokers | 2.2 | 2.7 | | Interest payable on lease liabilities | 0.5 | 0.6 | | Bank interest payable | 0.6 | 1.1 | | | **16.2** | **14.8** | 150 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and Company Information # Financial Statements continued Notes to the Financial Statements continued # 9. Taxation # Tax on profit on ordinary activities Tax charged in the Consolidated Income Statement: | | Year ended 31 May 2023 £m | Year ended 31 May 2022 £m | | --- | --- | --- | | **Current income tax** | | | | UK corporation tax | 75.1 | 79.1 | | Non-UK corporation tax | 24.3 | 39.3 | | Adjustment in respect of prior years | (6.1) | (6.1) | | **Total current income tax** | **93.3** | **112.3** | | **Deferred income tax** | | | | Origination and reversal of temporary differences | (7.4) | (1.6) | | Adjustment in respect of prior years | 0.8 | (1.0) | | Impact of change in tax rates on deferred tax balances | (0.1) | 0.3 | | **Total deferred income tax** | **(6.7)** | **(2.3)** | | **Total tax expense** | **86.6** | **110.0** | | **Total tax expense attributable to:** | | | | Continuing operations | 86.2 | 80.9 | | Discontinued operations | 0.4 | 29.1 | | **Tax not charged to Consolidated Income Statement** | | | | Tax recognised in other comprehensive income | (6.2) | 0.5 | | Tax recognised directly in equity | (1.0) | (0.5) | # Reconciliation of the total tax expense The standard UK corporation tax rate for the year ended 31 May 2023 is 20%1 (31 May 2022: 19%). Taxation outside the UK is calculated at the rates prevailing in the relevant jurisdictions. The tax expense in the Consolidated Income Statement for the year can be reconciled as set out below: | | Year ended 31 May 2023 £m | Year ended 31 May 2022 £m | | --- | --- | --- | | **Profit before taxation** | | | | From continuing operations | 449.9 | 477.0 | | From discontinued operations | 1.7 | 136.9 | | **Total profit before tax** | **451.6** | **613.9** | | Profit multiplied by the UK standard rate of corporation tax of 20%1 (31 May 2022: 19.0%) | 90.3 | 116.7 | | Higher taxes on overseas earnings | 3.4 | 7.9 | | Adjustment in respect of prior years | (5.3) | (8.2) | | Expenses not deductible for tax purposes | 1.6 | 0.8 | | Patent Box deduction | (3.2) | (7.0) | | Impact of change in tax rates on deferred tax balances | (0.1) | 0.3 | | Recognition and utilisation of losses previously not recognised | (0.4) | (1.2) | | Current year losses not recognised as deferred tax assets | 0.3 | 0.7 | | **Total tax expense attributable to:** | **86.6** | **110.0** | | Continuing operations | 86.2 | 80.9 | | Discontinued operations | 0.4 | 29.1 | 1 Blended UK corporation tax rate, being 10 months of 19% and 2 months of 25%. The effective tax rate for the year is 19.2% (31 May 2022: 17.9%). The UK substantively enacted a corporation tax rate of 25% (effective from 1 April 2023) on 24 May 2021. This will impact the Group's future tax charge accordingly. The deferred tax assets and liabilities have been assessed at the tax rates that are expected to apply when the related asset is realised or liability settled. IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and Company Information 151 # Financial Statements continued Notes to the Financial Statements continued # 9. Taxation continued # Deferred income tax assets | | 31 May 2023 £m | 31 May 2022 £m | | --- | --- | --- | | Tax losses available for offset against future profits | 3.8 | 3.7 | | Temporary differences arising on share-based payments | 4.8 | 3.7 | | Temporary differences arising on fixed assets | 1.1 | 2.1 | | Other temporary differences | 13.5 | 8.0 | | | **23.2** | 17.5 | # Deferred income tax liabilities | | 31 May 2023 £m | 31 May 2022 £m | | --- | --- | --- | | Temporary differences arising on business combinations | (57.6) | (62.9) | | Temporary differences arising on fixed assets | (0.2) | (0.2) | | Other temporary differences | (3.0) | (4.1) | | | **(60.8)** | (67.2) | # Deferred income tax recovery | | 31 May 2023 £m | 31 May 2022 £m | | --- | --- | --- | | Deferred tax assets to be recovered within 12 months | 4.4 | 5.4 | | Deferred tax assets to be recovered after 12 months | 18.8 | 12.1 | | | **23.2** | 17.5 | # Deferred income tax settlement | | 31 May 2023 £m | 31 May 2022 £m | | --- | --- | --- | | Deferred tax liabilities to be settled within 12 months | (7.4) | (7.7) | | Deferred tax liabilities to be settled after 12 months | (53.4) | (59.5) | | | **(60.8)** | (67.2) | 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. Share-based payment awards have been charged to the income statement but are not allowable as a tax deduction until the awards exercise. 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 2023 | | | | --- | --- | --- | --- | | | Gross unrecognised losses for tax purposes £m | Tax value of loss £m | Expiry date | | Overseas trading losses | 16.1 | 4.1 | N/A | | UK capital losses | 23.5 | 5.9 | N/A | | | **39.6** | **10.0** | | | | 31 May 2022 | | | | --- | --- | --- | --- | | | Gross unrecognised losses for tax purposes £m | Tax value of loss £m | Expiry date | | Overseas trading losses | 14.6 | 3.9 | N/A | | UK capital losses | 23.5 | 5.9 | N/A | | | **38.1** | **9.8** | | The Group has an unrecognised deferred tax asset of £10.0 million (31 May 2022: £9.8 million) in respect of prior and current year losses, the recoverability of which is dependent on sufficient taxable profits of the entities. The movement in the deferred income tax assets included in the Consolidated Statement of Financial Position is as follows: | | Year ended 31 May 2023 £m | Year ended 31 May 2022 £m | | --- | --- | --- | | At the beginning of the year | 17.5 | 12.9 | | Amounts arising on acquisitions in the year | – | 7.4 | | Tax (charged) to the income statement | (0.3) | (2.2) | | Tax credited to other comprehensive income | 6.2 | – | | Tax credited directly to equity | 0.6 | (0.3) | | Impact of movement in foreign exchange rates | – | – | | Reallocations between deferred tax assets and liabilities | (0.8) | (0.3) | | At the end of the year | **23.2** | 17.5 | 152 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and Company Information # Financial Statements continued Notes to the Financial Statements continued # 9. Taxation continued The movement in the deferred income tax liability included in the Consolidated Statement of Financial Position is as follows: | | Year ended 31 May 2023 £m | Year ended 31 May 2022 £m | | --- | --- | --- | | At the beginning of the year | (67.2) | (0.8) | | Amounts arising on acquisitions in the year | (0.6) | (66.1) | | Tax credited to the income statement | 7.0 | 4.5 | | Tax charged to other comprehensive income | - | (0.5) | | Impact of movement in foreign exchange rates | (0.8) | (4.6) | | Reallocations between deferred tax assets and liabilities | 0.8 | 0.3 | | At the end of the year | (60.8) | (67.2) | # 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. On 20 June 2023, Finance (No.2) Act 2023 was substantively enacted in the UK, introducing a global minimum effective tax rate of 15%. The legislation implements a domestic top-up tax and a multinational top-up tax, effective for accounting periods starting on or after 31 December 2023. The Group does not account for deferred tax on top-up taxes and therefore, there was no impact on the recognition and measurement of deferred tax balances as a result of the legislation being substantively enacted. 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 owners 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 and shares repurchased and cancelled under the share buyback programme. 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. | | Year ended 31 May 2023 | Year ended 31 May 2022 | | --- | --- | --- | | Earnings attributable to owners of the parent (£m) | 365.0 | 503.9 | | Weighted average number of shares | | | | Basic | 418,693,685 | 426,289,898 | | Dilutive effect of share-based payments | 3,869,357 | 3,614,236 | | Diluted | 422,563,042 | 429,904,134 | | | Year ended 31 May 2023 | Year ended 31 May 2022 | | Basic earning per ordinary share | 87.2p | 118.2p | | % Attributable to continuing operations | 86.9p | 92.9p | | % Attributable to discontinued operations | 0.3p | 25.3p | | Diluted earning per ordinary share | 86.4p | 117.2p | | % Attributable to continuing operations | 86.1p | 92.1p | | % Attributable to discontinued operations | 0.3p | 25.1p | IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and Company Information 153 Financial Statements continued Notes to the Financial Statements continued # **11. Dividends paid and proposed** | | Year ended 31 May 2023 £m | Year ended 31 May 2022 £m | | --- | --- | --- | | Final dividend for FY22 at 31.24 pence per share (FY21: 30.24p) | **133.2** | 130.3 | | Interim dividend for FY23 at 13.26 pence per share (FY22: 12.96p) | **54.9** | 55.9 | | | **188.1** | 186.2 | The final dividend for the year ended 31 May 2023 of 31.94 pence per share was proposed by the Board on 19 July 2023 and has not been included as a liability at 31 May 2023. This dividend will be paid on 19 October 2023, following approval at the Company's AGM, to those members on the register at the close of business on 22 September 2023. # **12. Goodwill** The movement in the goodwill balance for the year is as follows: | | 31 May 2023 £m | 31 May 2022 £m | | --- | --- | --- | | At the beginning of the year | **604.7** | 107.3 | | Additions – business acquisition | – | 462.4 | | Disposals | – | (13.4) | | Impact of foreign exchange movement | **6.3** | 48.4 | | At the end of the year | **611.0** | 604.7 | Goodwill has been allocated for impairment testing purposes to cash-generating units (CGU) as follows: | | 31 May 2023 £m | 31 May 2022 £m | | --- | --- | --- | | US | **509.2** | 502.8 | | UK | **100.9** | 100.9 | | South Africa | **0.8** | 0.9 | | Australia | **0.1** | 0.1 | | | **611.0** | 604.7 | Goodwill arose as follows: - ¼ US – from the acquisition of tastytrade on 28 June 2021 - ¼ UK – from the reorganisation of the UK business on 5 September 2003 - 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 above CGUs (31 May 2022: £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 estimated recoverable amount for each CGU was determined using the value-in-use (VIU) method. For all CGUs, the recoverable amount was higher than the carrying value. The Group's largest goodwill balance is associated with the US CGU. # **Key assumptions used in the calculation of the recoverable amount of the US CGU** The key assumptions for the VIU calculations are those regarding the future cash flow projections, long-term growth rate and the discount rates. # **Future cash flow projections:** The future cash flow projections cover a period of four years, reflecting the period over which the Board strategically assess performance. A declining growth rate of 16.0%–6.0% was used to extrapolate the final year of the four-year forecast period for a further three years. The terminal value was calculated based on the seventh year. The growth rate for the years five to seven was applied as the US business is not expected to reach a steady state growth rate by the end of year four. The cash flow projections are based on the most recent four year plan and take into account historical performance, together with the Group's views on future achievable growth relating to growth of market share and increased client acquisition. Key assumptions are the projected annual growth of net trading revenue and cost growth, which impacts the EBITDA margin. Net trading revenue growth is driven by increasing client numbers based on assumptions relating to acquisition, conversion and retention of clients. EBITDA margin is based on net trading revenue, interest on client money and cost assumptions. Interest on client money is based on our expectation of future longer term interest rates and increases in total client money balances as the underlying client base increases during the forecasted period. 154 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and Company Information # Financial Statements continued Notes to the Financial Statements continued # **12. Goodwill continued** Revenue related costs are forecasted to increase over the four-year period in line with revenue projections and cost growth reflects higher marketing expenditure and continued investment in technology. The cashflow projections also take into account assumptions relating to working capital requirements and capital expenditure. The forecasts do not include revenues arising from tastytrade's planned expansion outside of the US market. # **Long term-growth:** The regional long-term growth is used to extrapolate the cash flows to perpetuity for each CGU. The forecast period of four years is extrapolated for a further three years using a declining growth rate, reducing the rate down to a long-term growth rate of 2.0% (31 May 2022: 2.0%) which has been applied to derive a terminal value based on the cash flows in year seven. # **Discount rate:** The discount rate used to calculate the recoverable amount of the US CGU is based on a post-tax weighted average cost of capital (WACC). 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 flows which are subject to management's judgement. A pre-tax discount rate is derived from a post-tax WACC. At the date of the 2023 impairment assessment the pre-tax discount rate applied to the seven-year cash flow period and thereafter, to determine the recoverable amount is 19.6%. For the 2022 impairment assessment, if the four-year cash flows were extrapolated for three years in line with the current year methodology, a discount rate of 19.8% would have been applied. The year on year movement in the discount rate is as a result of the impact of rising interest rates being offset by a reduction in entity specific risk premiums included in the discount rate. The recoverable amount determined for a seven-year cash flow period for 31 May 2023 and 31 May 2022 would be the same as that determined for a four-year cash flow period with an adjusted pre-tax discount rate applied. # **Sensitivity to changes in key assumptions** The recoverable amount at 31 May 2023 exceeds the carrying amount of the cash-generating unit by £27.0 million. The assessment excludes the projected future cash flows arising from tastytrade's planned expansion outside the US market. Were the projected cash flows from international expansion included this would add headroom. The impact of sensitivities to reasonable changes in a single variable and the change required to reduce headroom to nil are shown in the following table: | Assumption | Sensitivity applied | Reduction in recoverable amount £m | Impairment £m | Changes required to reduce headroom to nil | | --- | --- | --- | --- | --- | | Net trading revenue growth | (5.0)% | (104.7) | (77.7) | 1.2% underperformance | | EBITDA margin | (10.0)% | (85.1) | (58.1) | 3.2% underperformance | | Discount rate | 0.5% | (29.3) | (2.3) | 0.6% increase | | Long-term growth rate | (0.5)% | (17.9) | - | 0.8% reduction | # **Key assumptions used in the calculation of the recoverable amount of CGUs excluding the US CGU** # **Future cash flow projections:** The future cash flow projections cover a period of four years, reflecting the period over which the Board strategically assess performance. Projected revenue is based on assumptions relating to client acquisition and trading activity, and assumptions on interest earned on client funds. Projected costs are based on assumptions relating to revenue-related costs, including trading and client transaction fees, and structural costs. 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. # **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 long-term growth rate of 2.0% (31 May 2022: 2.0%) has been applied to the cash flows to derive a terminal value. # **Discount rates:** The discount rates used to calculate the recoverable amount of each CGU are based on a post-tax 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 2023 | 31 May 2022 | | --- | --- | --- | | UK | 14.0% | 12.0% | | South Africa | 21.0% | 18.0% | | Australia | 16.0% | 13.0% | # **Sensitivity to changes in key assumptions excluding the US CGU** The VIU calculation has been subject to a sensitivity analysis reflecting reasonable changes in individual key assumptions. For all goodwill balances, there is sufficient headroom in the recoverable amount of the CGU based on the assumptions made, and there is no reasonably likely scenario under which material impairment could be expected to occur based on the testing performed. IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and Company Information 155 # Financial Statements continued 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 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 | | At 1 June 2022 | **179.4** | **62.4** | **31.6** | **64.1** | **37.0** | **33.6** | **408.1** | | Additions | - | - | - | 7.0 | - | 7.6 | 14.6 | | Additions – business acquisition (Small Exchange) | - | - | - | 8.0 | - | - | 8.0 | | Disposals | - | - | - | (2.8) | - | (11.7) | (14.5) | | Impact of movement in foreign exchange rates | **2.3** | **0.8** | **0.4** | **0.1** | **0.1** | - | **3.7** | | **At 31 May 2023** | **181.7** | **63.2** | **32.0** | **76.4** | **37.1** | **29.5** | **419.9** | | **Accumulated amortisation** | | | | | | | | | At 1 June 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 | | At 1 June 2022 | **17.5** | **3.7** | **5.8** | **37.4** | **22.3** | **29.3** | **116.0** | | Charge during the year | **17.3** | **4.4** | **6.6** | **7.1** | **3.7** | **3.2** | **42.3** | | Disposals | - | - | - | (2.8) | - | (11.7) | (14.5) | | Impact of movement in foreign exchange rates | **(0.2)** | **(0.1)** | **(0.1)** | **(0.1)** | **0.1** | - | **(0.4)** | | **At 31 May 2023** | **34.6** | **8.0** | **12.3** | **41.6** | **26.1** | **20.8** | **143.4** | | Net book value – 31 May 2022 | 161.9 | 58.7 | 25.8 | 26.7 | 14.7 | 4.3 | 292.1 | | **Net book value – 31 May 2023** | **147.1** | **55.2** | **19.7** | **34.8** | **11.0** | **8.7** | **276.5** | 156 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and Company Information Notes to the Financial Statements continued # **14. 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 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 | | At 1 June 2022 | **24.1** | **7.1** | **55.3** | **36.6** | **123.1** | | Additions | **0.4** | **0.4** | **10.8** | **8.9** | **20.5** | | Additions – business acquisition | **0.2** | **0.5** | – | – | **0.7** | | Disposals | **(0.6)** | **(0.2)** | **(2.1)** | **(4.4)** | **(7.3)** | | Impact of movement in foreign exchange rates | – | **(0.2)** | **(0.4)** | **(0.3)** | **(0.9)** | | **At 31 May 2023** | **24.1** | **7.6** | **63.6** | **40.8** | **136.1** | | **Accumulated depreciation** | | | | | | | At 1 June 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 | | At 1 June 2022 | **20.4** | **6.2** | **43.2** | **16.7** | **86.5** | | Charge for the year | **1.7** | **0.5** | **8.5** | **8.0** | **18.7** | | Disposals | **(0.5)** | **(0.2)** | **(1.4)** | **(2.2)** | **(4.3)** | | Impact of movement in foreign exchange rates | **(0.1)** | **(0.4)** | **(0.2)** | **(0.2)** | **(0.9)** | | **At 31 May 2023** | **21.5** | **6.1** | **50.1** | **22.3** | **100.0** | | Net book value – 31 May 2022 | 3.7 | 0.9 | 12.1 | 19.9 | 36.6 | | **Net book value – 31 May 2023** | **2.6** | **1.5** | **13.5** | **18.5** | **36.1** | IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and^{}[] Company Information 157 # Financial Statements continuedNotes to the Financial Statements continued # 15. Financial investments and financial assets pledged as collateral | | 31 May 2023 £m | 31 May 2022 £m | | --- | --- | --- | | UK Government securities | 606.4 | 351.1 | | Term deposits | – | 45.0 | | | 606.4 | 396.1 | | Split as: | | | | Non-current portion | 379.6 | 160.1 | | Current portion | 226.8 | 236.0 | | | 606.4 | 396.1 | The Group held £372.3 million UK Government securities as at 31 May 2023 (31 May 2022: £289.9 million) to satisfy margin requirements. Prior to 1 January 2022, the Group had to meet its liquid asset buffer requirement under the previous BIPRI12 regime by holding gilts. From 1 January 2022, this was replaced by a new regime within the Investment Firm Prudential Regime rules. The Group is now able to meet its basic liquid asset requirement and a liquid asset threshold requirement with a broader range of assets. Following the introduction of the Uncleared Margin Rules (UMR) which came into effect in September 2022, the Group is required to pledge collateral, which is held in segregated custody accounts, to meet the initial margin requirements of certain brokers. Previously initial margin requirements were met with a combination of cash and UK Government securities held in unsegregated accounts. As a result of this change, the UK Government securities held by the Group has increased. The business model for holding UK Government Securities is unchanged and so the Group continues to recognise and measure the assets as fair value through other comprehensive income. Additionally, as at 31 May 2023, the Group holds £35.0 million of financial assets which are not recognised on balance sheet as collateral from certain brokers to satisfy the requirements of UMR. # 16. Cash and cash equivalents | | 31 May 2023 £m | 31 May 2022 £m | | --- | --- | --- | | Cash at bank | 627.4 | 808.9 | | Money market funds | 171.1 | 437.5 | | | 798.5 | 1,246.4 | 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 2023, IG Bank S.A. was required to hold £34.8 million (31 May 2022: £35.1 million) in satisfaction of this requirement. This amount, which represents restricted cash, is included in the cash at bank balance above. The amount of segregated client funds held at 31 May 2023 was £2,303.9 million (31 May 2022: £2,577.9 million). Included within these balances is £232.5 million (31 May 2022: £236.7 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. These amounts are held off-balance sheet due to the Group being unable to use these client funds. The interest received on segregated client funds is included within net operating income. # Reconciliation to Consolidated Statement of Cash Flows | | 31 May 2023 £m | 31 May 2022 £m | | --- | --- | --- | | Cash and cash equivalents | 798.5 | 1,246.4 | | Amounts due to the Pool | (3.3) | – | | Balances as per statement of cash flows | 795.2 | 1,246.4 | # 17. Trade receivables | | 31 May 2023 £m | 31 May 2022 £m | | --- | --- | --- | | Amounts due from brokers | 486.6 | 381.0 | | Own funds in client money | 79.4 | 85.5 | | Amounts due from clients | 4.4 | 3.0 | | | 570.4 | 469.5 | 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. 158 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and Company Information # Financial Statements continued Notes to the Financial Statements continued # **17. Trade receivables continued** 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 £24.7 million (31 May 2022: £7.6 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. # **18. Other assets** Other assets are cryptocurrency assets and rights to cryptocurrency assets, which are 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 2023 £m | 31 May 2022 £m | | --- | --- | --- | | Exchange | 1.5 | 1.8 | | Vaults | 13.5 | 12.4 | | | 15.0 | 14.2 | 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 28). # **19. Debt securities in issue** In FY22 the Group issued £300.0 million 3.125% senior unsecured bonds due in 2028. The issued debt has been recognised at fair value less transaction fees. As at 31 May 2023, £1.7 million unamortised arrangement fees are recognised on the Statement of Financial Position (31 May 2022: £2.0 million). The Group also has access to a £350.0 million revolving credit facility, which has increased as a result of two accordions to the existing revolving credit facility being signed in FY23. The Group has the option to request an increase in the revolving credit facility size to £400.0 million. The Group also had the option to request a maturity extension of one year, which was exercised in FY23. The revolving credit facility will now mature in October 2025. In addition, the Group has the option to extend the maturity for a further year, subject to borrower request and lender consent. Under the terms of the 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 year. # **20. 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 2023 £m | 31 May 2022 £m | | --- | --- | --- | | Future minimum payments due: | | | | Within one year | 7.4 | 8.9 | | After one year but not more than five years | 9.9 | 13.2 | | After more than five years | 3.4 | 0.6 | | | 20.7 | 22.7 | In addition to the £20.7 million lease liability (31 May 2022: £22.7 million), the Group has £0.4 million lease commitments under non-cancellable operating leases which are not capitalised as right-of-use assets (31 May 2022: £0.3 million) which have been expensed during the year in the Consolidated Income Statement. Refer to note 29 for a maturity analysis of the undiscounted cash flows for non-cancellable leases. # **21. Trade payables** | | 31 May 2023 £m | 31 May 2022 £m | | --- | --- | --- | | **Client funds** | | | | UK | 253.9 | 359.0 | | US | 56.1 | 34.1 | | EU | 55.4 | 71.6 | | EMEA Non-EU | 49.0 | 48.8 | | Singapore | 1.1 | 1.5 | | Japan | 4.9 | 4.4 | | **Total client funds** | **420.4** | **519.4** | | Issued turbo warrants | 2.7 | 1.5 | | Amounts due to brokers | 48.6 | 28.0 | | Amounts due to clients | 6.3 | 22.3 | | | 478.0 | 571.2 | Client funds reflects the Group's liability for client monies which are recognised on balance sheet in cash and cash equivalents. Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 159IG GROUP HOLDINGS PLC Annual Report 2023 Company Information Financial Statementscontinued Notes to the Financial Statementscontinued 21. Trade payablescontinued 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. 22. Other payables 31 May 2023 £m 31 May 2022 £m Non-current Other payables 1.2 – 1.2 – Current Accruals 109.4 112.6 Payroll taxes, social security and other taxes 3.5 6.9 Amounts due to the Pool 3.3 – 116.2 119.5 The notional pooling arrangement balance above relates to the notional multi-currency pooling arrangement established with the Group’s bank during the current year in order to better manage the funding requirements of the foreign operating subsidiaries of the Group. The Pool allows the Group’s subsidiaries to draw down on funds in any denomination required for operational purposes, as long as overall the Pool has sufficient funds across all the different currencies. 23. 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 Group is subject to a group of claims that could have a financial impact of approximately £20.5 million as at 31 May 2023 (31 May 2022: £20.6 million). There have been no significant developments during the year and it is still not possible to determine whether any amounts will be payable to the clients. As a result, no provision has been recognised. The Group has received notice of a class action served against one of its operating entities during the financial year ended 31 May 2023. There has been no significant development since the claim was served and it is not possible to determine amounts that could be payable to the clients. As a result, no provision has been recognised. 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 material adverse impact on the Group Financial Statements. The Group had no material provisions as at 31 May 2023 (31 May 2022: £nil). 24. 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 2021 370,299,455 – 125.8 Issued during the year 61,275,000 – – At 31 May 2022 431,574,455 – 125.8 Issued during the year – – – Shares bought back and immediately cancelled (22,626,613) – – At 31 May 2023 408,947,842 – 125.8 (ii) Deferred redeemable shares (0.001p) At 31 May 2022 65,000 – – At 31 May 2023 65,000 – – (iii) Redeemable preference shares (£1.00) At 31 May 2022 40,000 – – At 31 May 2023 40,000 – – 160 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and Company Information Notes to the Financial Statements continued # **24. Share capital and share premium continued** In prior year, the Group issued 61,000,000 shares as part of the total consideration for the acquisition of tastytrade Inc. The shares were issued on 28 June 2021 and upon issue the total value of the shares was £509.4 million, based on the closing share price on 28 June 2021. The issue of shares was determined to qualify for merger relief under section 612 of the Companies Act 2006, and the amount in excess of the nominal value of the ordinary shares was recognised in the merger reserve, along with issue costs of £0.4 million which were directly attributable to the issue of the shares. On 21 July 2022, the Group announced a share buyback programme with a maximum aggregate market value equivalent to £150.0 million, to be completed in two tranches of £75.0 million each. It was also announced that all shares repurchased as part of the programme would be cancelled. The first tranche commenced on 21 July 2022 and completed on 12 October 2022, with the purchase and cancellation of 9,613,152 shares. The second tranche commenced on 25 October 2022 completed on 20 March 2023, with the purchase and cancellation of 9,635,113 shares. On 25 January 2023, the Board approved an additional share buyback programme of up to £50.0 million. This commenced on 1 April 2023 and as at 31 May 2023 has resulted in the purchase and cancellation of 3,571,441 shares. As at 31 May 2023 the Group has repurchased 22,819,706 shares, with an aggregate nominal value of £1,140.99, for total consideration of £176.6 million (including related costs of £0.8 million). As at 31 May 2023 the Group had 193,093 shares repurchased but not cancelled. During FY22, 275,000 ordinary shares with an aggregate nominal value of £13.75 were issued to the Employee Benefit Trust to satisfy the exercise of Sustained Performance Plan and Long-term Incentive Plan awards for consideration of £13.75. No shares were issued in the current year. Except as the ordinary shareholders have agreed or may otherwise agree, on 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. # **Deferred redeemable share** 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. 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 2022: 8.0%). The preference shares are no longer required as part of the Group's capital structure so approval for redemption was granted by the Board on 18 May 2023. During FY23, there have been no changes to the Group's deferred redeemable shares and redeemable preference shares (31 May 2022: none). # **25. Other reserves** | | Share-based payments reserve £m | Own shares held in Employee Benefit Trusts £m | FVOCI reserve £m | Share buyback reserve £m | Total other reserves £m | | --- | --- | --- | --- | --- | --- | | **At 1 June 2021** | 14.5 | (1.6) | (0.1) | – | 12.8 | | Employee Benefit Trust purchase of shares | – | (6.7) | – | – | (6.7) | | Transfer of vested awards from share-based payment reserve | (7.3) | – | – | – | (7.3) | | Equity-settled employee share-based payments | 13.6 | – | – | – | 13.6 | | Exercise of employee share awards | (2.3) | 2.3 | – | – | – | | 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 | | **At 1 June 2022** | **18.5** | **(6.0)** | **(4.1)** | **–** | **8.4** | | Share buyback | – | – | – | (2.1) | (2.1) | | Employee Benefit Trust purchase of shares | – | (14.6) | – | – | (14.6) | | Transfer of vested awards from share-based payment reserve | (7.6) | – | – | – | (7.6) | | Equity-settled employee share-based payments | 13.3 | – | – | – | 13.3 | | Exercise of employee share awards | (11.3) | 11.3 | – | – | – | | Change in value of financial assets held at fair value through other comprehensive income | – | – | (11.9) | – | (11.9) | | Share-based payments converted to cash settled liabilities | (2.4) | – | – | – | (2.4) | | **At 31 May 2023** | **10.5** | **(9.3)** | **(16.0)** | **(2.1)** | **(16.9)** | IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and Company Information < > 161 # Financial Statements continued Notes to the Financial Statements continued # **25. Other reserves continued** 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. The share buyback relates to the amount due to the intermediary bank for the repurchase of its own shares. # **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 2023 Number | Year ended 31 May 2022 Number | | --- | --- | --- | | At the beginning of the year | 659,929 | 872,272 | | Subscribed for and purchased during the year | 2,112,631 | 1,012,130 | | Exercise and sale of own shares held in trust | (1,439,639) | (1,224,473) | | **At the end of the year** | **1,332,921** | **659,929** | 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. At 31 May 2023, 147,895 ordinary shares (31 May 2022: 161,918) were held in the Trust. The market value of the shares at 31 May 2023 was £1.0 million (31 May 2022: £1.2 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 2023 the Trust held 1,171,960 ordinary shares (31 May 2022: 488,094). The market value of the shares at 31 May 2023 was £7.9 million (31 May 2022: £3.5 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 2023, 13,066 ordinary shares (31 May 2022: 9,917) were held in the Trust. The market value of the shares at 31 May 2023 was £0.1 million (31 May 2022: £0.1 million). # **26. 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** 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). The last award that can be granted under the current SPP plan will be in August 2023. After this point the current SPP will expire as per the terms of the structure of the plan. 162 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and Company Information Financial Statements continued Notes to the Financial Statements continued **26. Employee share plans continued** The following table shows the movement of options in the SPP, the additional awards issued and dividends accrued for the year ended 31 May 2023. | 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 accrued during the year Number | At the end of the year Number | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 04-Aug-14 | 31 May 2014 | 609.90 | 01-Aug-25 | 11,851 | - | - | (4,318) | 442 | 7,975 | | 06-Aug-15 | 31 May 2015 | 742.55 | 01-Aug-25 | 13,187 | - | - | (4,778) | 496 | 8,905 | | 02-Aug-16 | 31 May 2016 | 868.55 | 01-Aug-25 | 53,215 | - | - | (18,804) | 2,020 | 36,431 | | 01-Aug-17 | 31 May 2017 | 626.50 | 01-Aug-25 | 51,606 | - | - | (20,071) | 1,851 | 33,386 | | 07-Aug-18 | 31 May 2018 | 893.00 | 01-Aug-25 | 183,260 | - | - | (70,497) | 6,623 | 119,386 | | 06-Aug-19 | 31 May 2019 | 559.20 | 01-Aug-25 | 147,469 | - | - | (54,476) | 5,461 | 98,454 | | 06-Aug-20 | 31 May 2020 | 734.00 | 01-Aug-25 | 939,253 | - | - | (330,852) | 35,744 | 644,145 | | 06-Aug-20 | - | 734.00 | 01-May-22 | - | - | - | - | - | - | | 06-Aug-20 | 31 May 2021 | 734.00 | 30-Jun-22 | 35,616 | - | - | (37,200) | 1,584 | - | | 06-Aug-20 | - | 734.00 | 01-May-23 | 2,179 | - | - | (2,569) | 390 | - | | 05-Aug-21 | 31 May 2022 | 911.50 | 01-Aug-25 | 1,326,780 | - | (13,110) | (242,073) | 63,516 | 1,135,113 | | 10-Jan-22 | - | 829.50 | 30-Jun-23 | 15,390 | - | - | - | - | 15,390 | | 10-Jan-22 | - | 829.50 | 30-Jun-24 | 12,990 | - | - | - | - | 12,990 | | 04-Aug-22 | - | 818.00 | 30-Sep-23 | - | 7,230 | - | (3,615) | - | 3,615 | | 04-Aug-22 | 31 May 2023 31 May 2024 | 818.00 | 30-Sep-24 | - | 3,605 | - | - | - | 3,605 | | 08-Aug-22 | 31 May 2023 | 822.00 | 01-Aug-27 | - | 1,799,194 | (176,250) | - | 63,762 | 1,686,706 | | 11-Aug-22 | 31 May 2023 | 834.00 | 11-Aug-25 | - | 26,976 | - | - | - | 26,976 | | 30-Sep-22 | 31 May 2023 | 763.50 | 30-Sep-25 | - | 25,539 | - | - | - | 25,539 | | **Total** | | | | **2,792,796** | **1,862,544** | **(189,360)** | **(789,253)** | **181,889** | **3,858,616** | The average share price at exercise of options during the year was 811.43 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 2023 was 2.14 years (31 May 2022: 3.11 years). The SPP awards for the year ended 31 May 2023 will be granted in August 2023 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 2023, based on the year-end share price: | Expected award date | Closing share price at 31 May 2023 | Expected full vesting date | Awards expected for the year ending 31 May 2023 Number | | --- | --- | --- | --- | | 3 Aug 2023 | 672.0p | 1 Aug 2027 | 1,332,538 | IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and^{}[] Company Information < > 163 # Financial Statements continued Notes to the Financial Statements continued # **26. Employee share plans continued** # **Long-term Incentive Plan** 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 instead, for awards granted in 2022, the remuneration committee have decided to apply a performance underpin which would take account of the underlying financial and non-financial performance of the participant and/or any relevant group member, over the vesting period. 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 | 2,435 | - | - | - | (2,435) | - | | 6 Aug 2019 | 559.20p | 6 Aug 2022 | 377,719 | - | (8,538) | 70,214 | (439,395) | - | | 6 Aug 2020 | 734.00p | 6 Aug 2023 | 324,104 | - | (21,637) | - | - | 302,467 | | 5 Aug 2021 | 911.50p | 5 Aug 2024 | 355,295 | - | (32,337) | - | - | 322,958 | | 4 Aug 2022 | 818.00p | 4 Aug 2025 | - | 619,707 | (46,201) | - | - | 573,506 | | Total | | | 1,059,553 | 619,707 | (108,713) | 70,214 | (441,830) | 1,198,931 | 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 2023 was 1.41 years (31 May 2022: 1.16 years). # **Medium-term Incentive Plan** The MTIP was made available to certain employees within the Group. Awards under the MTIP were nominal cost options, which vest after 15 months, conditional upon continued employment at the vesting date. There were no other performance targets. The exercise price of all options awarded under the MTIP was 0.005 pence. On 5 November 2022 the awards under this scheme vested. There were no new awards granted to any employee under the MTIP in the current year. The table below shows the movement in the awards during the current period: | 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 | 911.50p | 5 Nov 2022 | 195,519 | - | (8,670) | 18,503 | (200,546) | 4,806 | # **Share-Incentive Plan** 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 2022: £1,800/A$3,000) of partnership shares, with the Company matching on a one-for-one (31 May 2022: 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. 164 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and^{}[] Company Information # Financial Statements continued Notes to the Financial Statements continued # **26. Employee share plans continued** 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: (i) the opening share price; or (ii) the closing share price for the period. 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 | 6 Aug 2019 | 559.20p | 6 Aug 2022 | 53,124 | – | (1,594) | (51,530) | – | | Australia | 15 Jul 2019 | 597.00p | 15 Jul 2022 | 1,792 | – | – | (1,792) | – | | UK | 6 Aug 2020 | 734.00p | 6 Aug 2023 | 49,119 | – | (6,008) | (2,420) | 40,691 | | Australia | 15 Jul 2020 | 740.79p | 15 Jul 2023 | 2,997 | – | (444) | (444) | 2,109 | | UK | 5 Aug 2021 | 911.50p | 5 Aug 2024 | 47,769 | – | (5,155) | (1,583) | 41,031 | | Australia | 15 Jul 2021 | 851.50p | 15 Jul 2024 | 3,989 | – | (380) | (380) | 3,229 | | UK | 3 Aug 2022 | 814.00p | 3 Aug 2025 | – | 60,702 | (2,679) | (2,203) | 55,820 | | Australia | 15 Jul 2022 | 707.00p | 15 Jul 2025 | – | 6,904 | (1,044) | – | 5,860 | | **Total** | | | | **158,790** | **67,606** | **(17,304)** | **(60,352)** | **148,740** | Of the above SIP awards exercised during the year ended 31 May 2023, the average weighted share price at exercise was: | Country of award | Award date | Weighted average share price at exercise | | --- | --- | --- | | 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 | 827.89p | | UK | 4 Aug 2022 | 815.26p | | Australia | 15 Jul 2022 | 707.00p | The weighted average exercise price of the SIP awards exercised during the year ended 31 May 2023 is 810.56p. IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and^{}[] Company Information 165 # Financial Statements continuedNotes to the Financial Statements continued # **26. Employee share plans continued** # **Accounting for share schemes** The expense recognised in the Consolidated Income Statement in respect of share-based payments was £13.3 million (31 May 2022: £13.7 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 £22.5 million (31 May 2022: £15.3 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: | Deemed date of grant | 8 August 2022 | | --- | --- | | Share price at grant date (pence) | 822 | | Expected life of awards (years) | 0.81 | | Risk-free sterling interest rate (%) | 2.06 | | IG Group Holdings plc expected volatility (%) | 25.82 | 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 2023** | **683.09p** | **881.44p** | **859.71p** | **610.54p** | **759.11p** | | Year ended 31 May 2022 | 618.63p | 760.27p | 807.52p | 641.61p | 683.09p | # **27. 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 2023 £m | Year ended 31 May 2022 £m | | --- | --- | --- | | Short-term employee benefits | 10.4 | 6.8 | | Termination benefits | 0.1 | – | | Share-based payments | 9.2 | 10.6 | | | **19.7** | **17.4** | The average number of key management personnel during the year was eleven (year ended 31 May 2022: twelve). Included within short-term employee benefits are pension charges of £0.2 million (year ended 31 May 2022: £nil). 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 2023 (31 May 2022: £0.3 million). The Group has a 9.81% shareholding and 25% voting rights in Zero Hash Holdings Limited (Zero Hash) which is accounted for as investment in associate on the Group's balance sheet. Zero Hash facilitates cryptocurrency trading for clients of tastytrade, Inc. and recognised £0.1 million revenue from Zero Hash (year ended 31 May 2022: £0.6 million). There were no other related party transactions which had a material impact on the Group Financial Statements. The Group had no transactions with its Directors other than those disclosed in the Directors' Remuneration Report. 166 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and^{}[] Company Information # Financial Statements continued Notes to the Financial Statements continued # **28. 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 2023 | Note | FVTPL £m | Amortised cost £m | FVOCI £m | Total carrying amount £m | Fair value £m | | --- | --- | --- | --- | --- | --- | --- | | **Financial assets** | | | | | | | | Cash and cash equivalents | 16 | 171.1 | 627.4 | - | 798.5 | 798.5 | | Financial investments | 15 | - | - | 606.4 | 606.4 | 606.4 | | Trade receivables – amounts due from brokers | 17 | (95.6) | 582.2 | - | 486.6 | 486.6 | | Trade receivables – own funds in client money | 17 | - | 79.4 | - | 79.4 | 79.4 | | Trade receivables – amounts due from clients | 17 | - | 4.4 | - | 4.4 | 4.4 | | Other receivables | | - | 10.0 | - | 10.0 | 10.0 | | Other investments | | 1.2 | - | - | 1.2 | 1.2 | | | | **76.7** | **1,303.4** | **606.4** | **1,986.5** | **1,986.5** | | **Financial liabilities** | | | | | | | | Trade payables – client funds | 21 | 88.7 | (509.1) | - | (420.4) | (420.4) | | Trade payables – issued turbo warrants | 21 | (2.7) | - | - | (2.7) | (2.7) | | Trade payables – amounts due to brokers | 21 | (39.5) | (9.1) | - | (48.6) | (48.6) | | Trade payables – amounts due to clients | 21 | - | (6.3) | - | (6.3) | (6.3) | | Debt securities in issue | 19 | - | (297.6) | - | (297.6) | (228.8) | | Lease liabilities | 20 | - | (20.7) | - | (20.7) | (20.7) | | Amounts due to the Pool | 22 | - | (3.3) | - | (3.3) | (3.3) | | Other payables – accruals | 22 | - | (109.4) | - | (109.4) | (109.4) | | Other borrowings | 22 | - | (1.2) | - | (1.2) | (1.2) | | | | **46.5** | **(956.7)** | **-** | **(910.2)** | **(841.4)** | IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and^{}[] Company Information < > 167 # Financial Statements continued Notes to the Financial Statements continued # **28. Financial instruments continued** | 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 | 16 | 437.5 | 808.9 | – | 1,246.4 | 1,246.4 | | Financial assets pledged as collateral | 15 | – | – | 60.4 | 60.4 | 60.4 | | Financial investments | 15 | – | 45.0 | 290.7 | 335.7 | 335.7 | | Trade receivables – amounts due from brokers | 17 | (159.3) | 540.3 | – | 381.0 | 381.0 | | Trade receivables – own funds in client money | 17 | – | 85.5 | – | 85.5 | 85.5 | | Trade receivables – amounts due from clients | 17 | – | 3.0 | – | 3.0 | 3.0 | | Other receivables | | – | 9.8 | – | 9.8 | 9.8 | | | | 278.2 | 1,492.5 | 351.1 | 2,121.8 | 2,121.8 | | **Financial liabilities** | | | | | | | | Trade payables – client funds | 21 | 117.4 | (636.8) | – | (519.4) | (519.4) | | Trade payables – issued turbo warrants | 21 | (1.5) | – | – | (1.5) | (1.5) | | Trade payables – amounts due to brokers | 21 | (1.0) | (27.0) | – | (28.0) | (28.0) | | Trade payables – amounts due to clients | 21 | – | (22.3) | – | (22.3) | (22.3) | | Debt securities in issue | 19 | – | (297.2) | – | (297.2) | (269.6) | | Lease liabilities | 20 | – | (22.7) | – | (22.7) | (22.7) | | Other payables – accruals | 22 | – | (112.6) | – | (112.6) | (112.6) | | | | 114.9 | (1,118.6) | – | (1,003.7) | (976.1) | Money market funds of £171.1 million (31 May 2022: £437.5 million) have been reclassified from amortised cost to fair value through profit and loss. Accordingly, the prior year comparative balances have been restated to reflect this classification. 168 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and Company Information # Financial Statements continued Notes to the Financial Statements continued # **28. 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 2023 | Level 1 £m | Level 2 £m | Level 3 £m | Total fair value £m | | --- | --- | --- | --- | --- | | **Financial assets** | | | | | | Cash and cash equivalents | 171.1 | – | – | 171.1 | | Trade receivables – amounts due from brokers | (3.2) | (92.4) | – | (95.6) | | Financial investments | 606.4 | – | – | 606.4 | | Other investments | – | – | 1.2 | 1.2 | | **Financial liabilities** | | | | | | Trade payables – amounts due to brokers | (10.4) | (29.1) | – | (39.5) | | Trade payables – client funds | 12.3 | 76.4 | – | 88.7 | | Trade payables – issued turbo warrants | – | (2.7) | – | (2.7) | | As at 31 May 2022 | Level 1 £m | Level 2 £m | Level 3 £m | Total fair value £m | | --- | --- | --- | --- | --- | | **Financial assets** | | | | | | Cash and cash equivalents | 437.5 | – | – | 437.5 | | 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) | 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 2022: 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 2023 and 31 May 2022. # **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 2023 and 31 May 2022, except for change in the fair value of the Group's investment in CBOE Digital Intermediate Holdings LLC and balances held in money market funds. IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and Company Information < > 169 # Financial Statements continued Notes to the Financial Statements continued # 28. 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 2023 | Note | Gross amounts of recognised financial instruments £m | Gross amounts of recognised financial instruments offset £m | Net amounts of financial instruments £m | Gross amounts not offset | | Net amounts subject to offsetting arrangements £m | | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | Financial instruments £m | Collateral pledged or received £m | | | **Financial assets** | | | | | | | | | Trade receivables – amount due from/(to) brokers | 17 | 1,254.3 | (767.7) | 486.6 | – | (35.0) | 451.6 | | **Total** | | **1,254.3** | **(767.7)** | **486.6** | **–** | **(35.0)** | **451.6** | | **Financial liabilities** | | | | | | | | | Trade payables – amounts due (to)/from brokers | 21 | (816.3) | 767.7 | (48.6) | – | 48.6 | – | | Trade payables – client funds | 21 | (509.1) | 88.7 | (420.4) | – | – | (420.4) | | **Total** | | **(1,325.4)** | **856.4** | **(469.0)** | **–** | **48.6** | **(420.4)** | | As at 31 May 2023 | Note | Gross amounts of recognised financial instruments £m | Gross amounts of recognised financial instruments offset £m | Net amounts of financial instruments £m | Gross amounts not offset | | Net amounts subject to offsetting arrangements £m | | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | Financial instruments £m | Collateral pledged or received £m | | | **Financial assets** | | | | | | | | | Trade receivables – amount due from/(to) brokers | 17 | 1,187.3 | (806.3) | 381.0 | – | – | 381.0 | | **Total** | | **1,187.3** | **(806.3)** | **381.0** | **–** | **–** | **381.0** | | **Financial liabilities** | | | | | | | | | Trade payables – amounts due (to)/from brokers | 21 | (834.3) | 806.3 | (28.0) | – | – | (28.0) | | Trade payables – client funds | 21 | 121.3 | (640.7) | (519.4) | – | – | (519.4) | | **Total** | | **(713.0)** | **165.6** | **(547.4)** | **–** | **–** | **(547.4)** | Amounts due from brokers and client funds have been presented net to reflect the impact of offsetting. Prior year comparatives of amounts due from broker have been reclassified from gross amounts of recognised financial instruments into gross amounts of recognised financial instruments offset to align with an updated presentation for offsetting. The gross amounts of recognised financial instruments relating to trade receivables – amounts due from brokers, and the amount offset, has increased by £68.0 million, and the gross amounts of recognised financial instruments relating to trade payables – amounts due from brokers, and the amount offset, has increased by £738.3 million. The Group is entitled to offset amounts due from brokers on a broker account level by currency. Collateral at brokers represent UK Government Gilt 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. 170 IS GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and Company Information # Financial Statements continued Notes to the Financial Statements continued # **29. 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 provided in the risk management section on page 48. # **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. # **Non-trading interest rate risk** The interest rate risk profile of the Group's financial assets and liabilities as follows: | | Within 1 year | | Between 2 and 5 years | | More than 5 years | | Total | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | 31 May 2023 £m | 31 May 2022 £m | 31 May 2023 £m | 31 May 2022 £m | 31 May 2023 £m | 31 May 2022 £m | 31 May 2023 £m | 31 May 2022 £m | | **Fixed rate** | | | | | | | | | | Financial assets pledged as collateral | - | 35.1 | - | 25.3 | - | - | - | 60.4 | | Financial investments | **226.8** | 200.9 | **379.6** | 134.8 | - | - | **606.4** | 335.7 | | Debt securities in issue | - | - | - | - | **(297.6)** | (297.2) | **(297.6)** | (297.2) | | Other payables | - | - | - | - | **(1.2)** | - | **(1.2)** | - | | **Floating rate** | | | | | | | | | | Cash and cash equivalents | **798.5** | 1,246.4 | - | - | - | - | **798.5** | 1,246.4 | | Trade receivables – amounts due from brokers | **486.6** | 381.0 | - | - | - | - | **486.6** | 381.0 | | Trade receivables – own funds in client money | **79.4** | 85.5 | - | - | - | - | **79.4** | 85.5 | | Trade payables – amounts due to brokers | **(48.6)** | (28.0) | - | - | - | - | **(48.6)** | (28.0) | | Amounts due to the Pool | **(3.3)** | - | - | - | - | - | **(3.3)** | - | | | **1,539.4** | 1,920.9 | **379.6** | 160.1 | **(298.8)** | (297.2) | **1,620.2** | 1,783.8 | # **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 in each year would be similar to that received in the current year and is considered immaterial to the Group's profit for the year. IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and Company Information < > 171 Financial Statements continued Notes to the Financial Statements continued # **29. Financial risk management continued** # **Non-trading interest rate risk sensitivity analysis - floating rate** Interest on financial instruments classified as floating rate is repriced 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. The impact is symmetrical for an increase in interest rates. | | Year ended 31 May 2023 £m | Year ended 31 May 2022 £m | | --- | --- | --- | | **(Decrease)/increase in profit before tax** | | | | Cash and cash equivalents | (8.0) | (12.5) | | Trade receivables – amounts due from brokers | (4.9) | (0.9) | | Trade receivables – own funds in client money | (0.8) | 0.9 | | Trade payables – amounts due to brokers | 0.5 | (0.3) | Additionally, given the current interest rate environment, the Group is exposed to interest rate risk in relation to interest income earned on segregated client money balances which are not recognised on the Consolidated Statement of Financial Position. Interest rate sensitivity analysis has been performed by considering the impact of a 1% decrease in the base rate that these balances are linked to. The impact on the Group's profit before tax is shown below. | | Year ended 31 May 2023 £m | Year ended 31 May 2022 £m | | --- | --- | --- | | **Decrease in profit before tax** | | | | Interest income on client funds | (36.7) | (34.2) | # **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: | | Year ended 31 May 2023 £m | Year ended 31 May 2022 £m | | --- | --- | --- | | Decrease in FVOCI reserve (equity) | (10.3) | (2.9) | 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 predefined limits. The Group's Risk Management Framework is set out on page 48 of the Annual Report. 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. 172 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and Company Information # Financial Statements continued Notes to the Financial Statements continued # **29. Financial risk management continued** The Group's end of day market risk VaR for the year is shown in table below: | | Year ended 31 May 2023 £m | Year ended 31 May 2022 £m | | --- | --- | --- | | Market risk as at 31 May | **14.0** | 5.0 | | Average market risk (daily) | **13.4** | 3.6 | | Maximum market risk (daily) | **21.8** | 13.1 | | Minimum market risk (daily) | **9.5** | 1.3 | # **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. In FY22, the Group recognised a £5.8 million realised foreign exchange gain in net trading revenue as a result of a foreign exchange contract entered into by the Group to hedge $300 million exposure arising from the cash consideration in relation to the acquisition of tastytrade. # **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 £1.0 million (31 May 2022: £nil), are all less than 30 days past due. Amounts due from clients, which are stated net of an expected credit loss of £17.1 million at 31 May 2023 (31 May 2022: £18.0 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 – cash funds in client money | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | 31 May 2023 £m | 31 May 2022 £m | 31 May 2023 £m | 31 May 2022 £m | 31 May 2023 £m | 31 May 2022 £m | 31 May 2023 £m | 31 May 2022 £m | | **Credit rating** | | | | | | | | | | AA+ & above | **34.9** | 24.1 | – | – | – | – | – | – | | AA to AA- | **88.8** | 437.8 | – | – | – | – | **5.7** | 5.3 | | A+ to A- | **630.1** | 730.9 | **423.1** | 320.0 | – | – | **73.4** | 80.0 | | BBB+ to BBB- | **22.7** | 25.5 | **33.1** | 32.8 | – | – | **0.2** | 0.2 | | BB+ to B | **10.3** | 17.6 | **20.5** | 1.5 | – | – | – | – | | Unrated | **11.7** | 10.5 | **9.9** | 26.7 | **4.4** | 3.0 | **0.1** | – | | **Total carrying amount** | **798.5** | 1,246.4 | **486.6** | 381.0 | **4.4** | 3.0 | **79.4** | 85.5 | IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and Company Information 173 # Financial Statements continued Notes to the Financial Statements continued # **29. Financial risk management continued** # **Loss allowance** Below is a reconciliation of the total loss allowance: | | Year ended 31 May 2023 £m | Year ended 31 May 2022 £m | | --- | --- | --- | | At the beginning of the year | 18.6 | 17.0 | | Loss allowance for the year: | | | | – gross charge for the year | 5.7 | 6.5 | | – recoveries | (4.6) | (3.6) | | – debts written off | (1.4) | (1.7) | | Foreign exchange | (0.2) | 0.4 | | **At the end of the year** | **18.1** | **18.6** | 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 2023 | | | | | --- | --- | --- | --- | --- | | | Stage 1 12-month £m | Stage 2 Lifetime £m | Stage 3 Lifetime £m | Total £m | | **Credit grade** | | | | | | Investment grade | 1,313.0 | – | – | 1,313.0 | | Non-investment grade | 56.6 | 0.6 | 16.8 | 74.0 | | Gross carrying amount | 1,369.6 | 0.6 | 16.8 | 1,387.0 | | Loss allowance | (1.0) | (0.3) | (16.8) | (18.1) | | **Total carrying amount** | **1,368.6** | **0.3** | **–** | **1,368.9** | | | 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** | 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. # **Concentration risk** The Group's largest credit exposure to any one individual broker at 31 May 2023 was £85.8 million (A+ rated) (31 May 2022: £55.7 million (A+ rated)). The Group's largest credit exposure to any bank at 31 May 2023 was £118.6 million (A+ rated) (31 May 2022: £320.9 million (AA- rated)). The Group has no significant credit exposure to any one particular client or group of connected clients. 174 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and Company Information Financial Statements continued Notes to the Financial Statements continued **29. Financial risk management continued** **Liquidity risk** **Maturities of financial liabilities** The tables 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 2023 | | | | | | --- | --- | --- | --- | --- | --- | | | 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 | 37.5 | 304.4 | 351.3 | 297.6 | | Lease liabilities | 7.4 | 13.5 | 3.8 | 24.7 | 20.7 | | Trade payables – client funds | 420.4 | – | – | 420.4 | 420.4 | | Trade payables – amounts due to clients | 6.3 | – | – | 6.3 | 6.3 | | Trade payables – amounts due to brokers | 48.6 | – | – | 48.6 | 48.6 | | Trade payables – issued turbo warrants | 2.7 | – | – | 2.7 | 2.7 | | Other payables – accruals | 109.4 | – | – | 109.4 | 109.4 | | Other payables | – | – | 1.2 | 1.2 | 1.2 | | Amount due to the Pool | 3.3 | – | – | 3.3 | 3.3 | | **Total** | **607.5** | **51.0** | **309.4** | **967.9** | **910.2** | | | 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** | In the prior year, the Group entered into a rolling credit facility agreement with its bank (please refer to note 19 for further details). In the current year, following the introduction of UMR (please see note 15 for further details) the Group entered into a sale and repurchase agreement with its bank in relation to its UK Government Gilt Securities. Both these agreements help the Group to better manage its liquidity requirements, as well as mitigate liquidity risks. **Capital management** The Group manages its capital resources in line with its capital allocation framework, which includes holding sufficient capital to meet regulatory capital requirements. The regulatory capital resources of the Group is a measure of equity, adjusted for goodwill and intangible assets, deferred tax assets, declared dividends, significant investment in financial sector entities, outstanding amount of share buyback not recognised in financial statements and prudent valuation, which at 31 May 2023 totalled £996.3 million (31 May 2022: £1,025.6 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. The Group met all externally imposed capital requirements throughout the years ended 31 May 2023 and 31 May 2022. 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 19. IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and Company Information < > 175 Financial Statements continued Notes to the Financial Statements continued # **30. Cash flow information** | | Year ended 31 May 2023 £m | Year ended 31 May 2022 £m | | --- | --- | --- | | **Operating activities** | | | | Operating profit | | | | From continuing operations | **438.5** | 477.3 | | From discontinued operations | **(0.2)** | – | | Adjustments for: | | | | Depreciation and amortisation | **61.0** | 57.5 | | Profit on disposal of assets | **0.8** | (0.3) | | Interest received on client funds | **(81.8)** | (3.5) | | Interest expense on client funds | **1.0** | 2.7 | | Equity-settled share-based payments charge | **13.3** | 13.6 | | (Increase)/decrease in trade receivables, other receivables and other assets | **(103.0)** | 53.9 | | (Decrease)/increase in trade and other payables | **(108.2)** | 209.4 | | **Cash generated from operations** | **221.4** | 810.6 | Interest received on client funds of £81.8 million (31 May 2022: £3.5 million) and interest paid on client funds of £1.0 million (31 May 2022: £2.7 million) have been presented as separate line items in the table above and in the Consolidated Statement of Cash Flows, in the current year. Prior year interest balances have been presented accordingly. # **Liabilities arising from financing activities** | | Debt securities in issue £m | Borrowings £m | Leases £m | Share buyback £m | Total £m | | --- | --- | --- | --- | --- | --- | | **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 | | **As at 31 May 2022** | **297.2** | – | **22.7** | – | **319.9** | | **As at 1 June 2022** | **297.2** | – | **22.7** | – | **319.9** | | Shares repurchased (including costs) | – | – | – | **177.3** | **177.3** | | Payments made for share buyback | – | – | – | **(175.2)** | **(175.2)** | | Changes to existing lease agreements | – | – | **1.2** | – | **1.2** | | Additions to leases | – | – | **7.3** | – | **7.3** | | Disposal of leases | – | – | **(3.3)** | – | **(3.3)** | | Unwinding of discount | – | – | **0.5** | – | **0.5** | | Lease payments made in the year | – | – | **(7.6)** | – | **(7.6)** | | Financing arrangement fees | **(0.3)** | – | – | – | **(0.3)** | | Amortisation of fees | **0.7** | – | – | – | **0.7** | | Impact of movement in foreign exchange rates | – | – | **(0.1)** | – | **(0.1)** | | **As at 31 May 2023** | **297.6** | – | **20.7** | **2.1** | **320.4** | 176 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and^{}[] Company Information # Financial Statements continued Notes to the Financial Statements continued # **31. Business acquisition** On 29 March 2023, the Group completed the acquisition of Small Exchange, a company incorporated in the US and based in Chicago. Small Exchange is a registered Designated Contract Market with the Commodity Futures Trading Commission. Small Exchange facilitates the trading of the futures market for all types of market participants. The acquisition has strategic benefits as it enables the Group to continue expanding its range of products and services available to retail investors and traders in the US by leveraging the trading technology of Small Exchange. 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. # **Purchase consideration** Under the terms of the purchase agreement, the Group acquired the entire voting share capital of Small Exchange and in exchange £9.6 million ($11.9 million) cash consideration was paid. The fair value of the purchase consideration was determined as £9.6 million ($11.9 million). # **Identified assets and liabilities** | | $m | £m | | --- | --- | --- | | **Non-current assets** | | | | Intangible assets | 9.9 | 8.0 | | Property, plant and equipment | 0.9 | 0.7 | | Total non-current assets | 10.8 | 8.7 | | **Current assets** | | | | Cash and cash equivalents | 1.9 | 1.6 | | Prepayments | 0.5 | 0.3 | | Total current assets | 2.4 | 1.9 | | **Current liabilities** | | | | Other payables | (0.2) | (0.1) | | Deferred revenue | (0.3) | (0.3) | | Total current liabilities | (0.5) | (0.4) | | **Non-current liabilities** | | | | Deferred tax liability | (0.8) | (0.6) | | Total non-current liabilities | (0.8) | (0.6) | | **Total identifiable net assets acquired** | **11.9** | **9.6** | 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 21.4% (post tax) and unobservable inputs applied to the cost approach for technology assets. 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 replacement cost, the inputs are the estimated opportunity cost which represents the lost return from investing in the development of technology, obsolescence factor which assumes replacement of technology over time considering annual level of maintenance and upgrades and remaining useful life of the asset. From the date of acquisition, Small Exchange has contributed £0.8 million of operating losses during the year ended 31 May 2023. If the acquisition had occurred on 1 June 2022, the contribution to trading revenue and operating loss would have been £0.1 million and £6.8 million respectively. Operating loss includes the additional amortisation that would have been charged assuming that the fair value adjustments of intangible assets had been applied from 1 June 2022. # **Purchase consideration outflow** | | $m | £m | | --- | --- | --- | | Cash consideration | 11.9 | 9.6 | | Less: cash balance acquired | (1.9) | (1.6) | | **Net outflow of cash** | **10.0** | **8.0** | Acquisition related costs of £0.1 million are included in legal and professional fees in operating costs in the Consolidated Income Statement and in operating cash flows in the Consolidated Statement of Cash Flows. # **32. Discontinued operations** In FY22, 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, as well as any subsequent cash flows in relation to this sale, are reported in discontinued operations. IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and Company Information < > 177 Financial Statements continued Notes to the Financial Statements continued # **32. Discontinued operations continued** Financial performance and cash flow information | | Year ended 31 May 2023 £m | Year ended 31 May 2022 £m | | --- | --- | --- | | Net trading revenue | - | 9.4 | | Other operating income | - | 0.6 | | **Operating income** | **-** | **10.0** | | Operating costs | **(0.2)** | **(9.9)** | | Net credit losses | - | (0.1) | | **Operating profit** | **(0.2)** | **-** | | Other non-operating income | **1.9** | **-** | | **Profit before tax** | **1.7** | **-** | | Tax expense | **(0.4)** | **-** | | **Profit after tax** | **1.3** | **-** | | Gain on sale of subsidiary after tax | - | 107.8 | | **Profit from discontinued operations** | **1.3** | **107.8** | | | Year ended 31 May 2023 £m | Year ended 31 May 2022 £m | | --- | --- | --- | | Net cash (outflow)/inflow from ordinary activities | **(1.5)** | 1.0 | | Net cash inflow from investing activities | **1.8** | 121.6^{1} | | Net cash outflow from financing activities | - | (0.1) | | Impact of movement in foreign exchange rates | - | 1.0 | | **Net cash increase generated by discontinued operations** | **0.3** | **123.5** | 1 Includes sales proceeds net of cash retained of £142.3 million. | | Year ended 31 May 2023 £m | Year ended 31 May 2022 £m | | --- | --- | --- | | Basic earnings per ordinary share from discontinued operations | **0.3p** | 25.3p | | Diluted earnings per ordinary share from discontinued operations | **0.3p** | 25.1p | # **33. Investment in associates** | | 31 May 2023 £m | 31 May 2022 £m | | --- | --- | --- | | At the beginning of the year | **14.8** | - | | Additions – business acquisition | - | 26.9 | | Additions – increase in investment in associate | - | 1.9 | | Disposals | - | (13.1) | | Share of loss after tax | **(2.6)** | (2.3) | | Foreign exchange movement | **0.3** | 1.4 | | **At the end of the year** | **12.5** | **14.8** | | 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 Road, Suite 403-A, City of Wilmington, County of New Castle, 19805, US | Series C- preferred share | 9.81% | Digital asset trading | Shareholder and ### 178 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information Financial Statementscontinued Notes to the Financial Statementscontinued 34. 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 Daily FX Limited 2 Ordinary shares 100% Content provider IG Knowhow Limited Ordinary shares 100% Software development IG Finance 5 Limited 1 Ordinary shares – Financing IG Finance 9 Limited Ordinary shares 100% Financing Financial Domaigns Registry Holdings Limited Ordinary shares 100% Non-trading Deal City Limited Ordinary shares 100% ETF trading IG Trading and Investments Limited Ordinary shares 100% Stock trading IG Australia Pty Limited Level 15, 55 Collins Street, Melbourne, VIC 3000, Australia Ordinary shares 100% CFD trading, foreign exchange and stock 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 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 Spectrum MTF Operator GmbH Ordinary shares 100% Multilateral Trading Facility Raydius GmbH Ordinary shares 100% Issuer of turbo warrants IG Bank S.A. 42 Rue du Rhone, Geneva, 1204, Switzerland Ordinary shares 100% CFD trading and foreign exchange Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 179IG GROUP HOLDINGS PLC Annual Report 2023 Company Information Financial Statementscontinued Notes to the Financial Statementscontinued 34. Investments in subsidiariescontinued Name of company Registered office and country of incorporation Holding Voting rights Nature of business 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, United States Ordinary shares 100% Holding company Market Risk Management Inc. Ordinary shares 100% Non-trading FX Publications Inc Ordinary shares 100% Non-trading IG US LLC Ordinary shares 100% Foreign exchange trading Fox Sub 2 Limited 57/63 Line Wall Road, Gibraltar 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 foreign exchange and stock trading 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, PO Box 40111, 00100, Kenya Ordinary shares 100% Non-trading 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% Non-trading tastylive, Inc. 6 1330 W Fulton Market St, Suite 620, Chicago, IL 60607, United States Ordinary shares 100% Network and content provider tastytrade, Inc. 7 Ordinary shares 100% Brokerage firm tasty Software Solutions LLC 3 Ordinary shares 100% Software development Small Exchange, Inc. 4 Ordinary shares 100% Exchange Bad Trader LLC 5 Ordinary shares 100% Content provider tastytrade Australia, Pty Limited 8 Unit 13, 5 Gladstone Rd, Castle Hill, NSW, 2154, Australia Ordinary shares 100% Brokerage firm tastytrade Canada, Inc. 9 800–885 West Georgia Street, Vancouver BC, V6C 3H1, Canada Ordinary shares 100% Non-trading Quiet Foundation, Inc. 1330 W Fulton Street, Suite 630, Chicago, IL 60607, United States Ordinary shares 100% Dormant Dough LLC 19 N Sangamon St, Chicago, IL 60607, United States Ordinary shares 100% Dormant 180 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and Company Information # Financial Statements continued Notes to the Financial Statements continued # **34. Investments in subsidiaries continued** | Name of company | Registered office and country of incorporation | Holding | Voting rights | Nature of business | | --- | --- | --- | --- | --- | | tastytrade Singapore Pte. Limited^{10} | #28-00, One Marina Boulevard, Singapore (018989) | Ordinary shares | 100% | Non-trading | 1. 1 The subsidiary entered into Members' Voluntary Liquidation (solvent liquidation) and was handed over to liquidators on 28 May 2021. 2. 2 This company is a newly established entity, incorporated on 20 January 2023. 3. 3 This company is a newly established entity, incorporated on 3 November 2022. 4. 4 The Group acquired a controlling interest in this company on 28 March 2023. 5. 5 This company is a newly established entity, incorporated on 10 February 2023. 6. 6 During the year the company changed its official name from tastytrade, Inc. to tastylive, Inc. 7. 7 During the year the company changed its official name from tastyworks, Inc. to tastytrade, Inc. 8. 8 During the year the company changed its official name from tastyworks Australia Pty Limited to tastytrade Australia Pty Limited. 9. 9 During the year the company changed its official name from tastyworks Canada, Inc. to tastytrade Canada, Inc. 10. 10 During the year the company changed its official name from tastyworks Singapore Pte. Limited to tastytrade Singapore Pte. Limited. 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). # **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) # **35. Subsequent events** During the period from 1 June 2023 to 17 July 2023, the Group repurchased 3,386,082 ordinary shares with a nominal value of 0.005p for an aggregate purchase amount of £23.0 million (including related costs of £0.1 million), bringing the total number of shares repurchased under the share buyback programme to 26,205,788. On 19 July, the Board approved an additional share buyback programme of £250 million. It is anticipated that the programme will commence under the existing shareholder authority granted at the 2022 AGM and will conclude under the authority proposed for approval at the 2023 AGM, following approval at the 2023 AGM. There have been no other subsequent events that have a material impact on the Group's financial information. IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and Company Information < > 181 # Company Financial Statements Primary Statements | Company Statement of Financial Position | 182 | | --- | --- | | Company Statement of Changes in Equity | 183 | | Company Statement of Cash Flows | 184 | Notes to the Company Financial Statements | 1. | General information and basis of preparation | 185 | | --- | --- | --- | | 2. | Significant accounting policies | 185 | | 3. | Auditors' remuneration | 185 | | 4. | Directors' remuneration | 185 | | 5. | Staff costs | 185 | | 6. | Investment in subsidiaries | 185 | | 7. | Leases | 186 | | 8. | Cash flow information | 186 | | 9. | Other receivables | 187 | | 10. | Debt securities in issue | 187 | | 11. | Other payables | 187 | | 12. | Share capital and share premium | 187 | | 13. | Related party transactions | 187 | | 14. | Other reserves | 188 | | 15. | Directors' shareholdings | 188 | | 16. | Contingent liabilities, provisions and guarantees | 188 | | 17. | Financial risk management | 188 | | 18. | Subsequent events | 189 | | 19. | Dividends paid and proposed | 189 | Shareholder and ### 182 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information Company Financial Statementscontinued ## Company Statement of Financial Position ### as at 31 May 2023 | | | 31 May 2023 | | 31 May 2022 | | | | 31 May 2023 | | 31 May 2022 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Note | | £m | | £m | | Note | | £m | | £m | | Assets | | | | | | Liabilities | | | | | | | Non-current assets | | | | | | Non-current liabilities | | | | | | | Investment in subsidiaries 6 1,087.2 1,076.3 | | | | | | Debt securities in issue 10 297.6 297.2 | | | | | | | Right-of-use assets 7 3.6 5.0 | | | | | | Lease liabilities 7 2.2 4.3 | | | | | | Prepayments 0.3 – 299.8 301.5 Other receivables 9 298.3 298.3 Current liabilities 1,389.4 1,379.6 Other payables 11 189.0 13.9 Current assets Lease liabilities 7 2.6 2.1 Prepayments 2.5 2.2 191.6 16.0 Other receivables 9 600.7 383.1 TOTAL LIABILITIES 491.4 317.5 Cash and cash equivalents 0.9 1.8 Equity 604.1 387.1 Share capital and share premium 12 125.8 125.8 TOTAL ASSETS 1,993.5 1,766.7 Merger reserve 590.0 590.0 Other reserves 14 (5.9) 7.5 Retained earnings 792.2 725.9 TOTAL EQUITY 1,502.1 1,449.2 TOTAL EQUITY AND LIABILITIES 1,993.5 1,766.7 The Company’s profit for the year was £423.4 million (31 May 2022: profit of £375.9 million) The Financial Statements of IG Group Holdings plc (registered number 04677092) were approved by the Board of Directors on 19 July 2023 and signed on its behalf by: Charles A. Rozes Chief Financial Officer IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and^{}[] Company Information < > 183 Company Financial Statements continued ## Company Statement of Changes in Equity for the year ended 31 May 2023 | | Share capital £m | Share premium £m | Merger reserve £m | Other reserves £m | Retained earnings £m | Total equity £m | | --- | --- | --- | --- | --- | --- | --- | | **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 | | **At 1 June 2022** | – | **125.8** | **590.0** | **7.5** | **725.9** | **1,449.2** | | Profit and total comprehensive income for the year | – | – | – | – | **423.4** | **423.4** | | Equity dividends paid | – | – | – | – | **(188.1)** | **(188.1)** | | Share buyback | – | – | – | (2.1) | **(176.6)** | **(178.7)** | | Employee Benefit Trust purchase of own shares | – | – | – | (14.6) | – | (14.6) | | Transfer of vested awards from the share-based payment reserve | – | – | – | (7.6) | 7.6 | – | | Equity-settled employee share-based payments | – | – | – | 13.3 | – | 13.3 | | Share-based payments converted to cash-settled liabilities | – | – | – | (2.4) | – | (2.4) | | **At 31 May 2023** | – | **125.8** | **590.0** | **(5.9)** | **792.2** | **1,502.1** | Shareholder and ### 184 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information Company Financial Statementscontinued ## Company Statement of Cash Flows ### for the year ended 31 May 2023 | | Year ended | | Year ended | | | --- | --- | --- | --- | --- | | | 31 May 2023 | | 31 May 2022 | | | Note | | £m | | £m | Operating activities Cash generated from operations 8 392.2 203.9 Net cash flow generated from operating activities 392.2 203.9 Investing activities Loan issued to Group companies – (298.3) Net cash flow used in investing activities – (298.3) Financing activities Interest paid on lease liabilities (0.2) (0.2) Interest and other financing costs paid (13.0) (8.4) Repayment of principal element of lease liabilities (2.0) (1.9) Net proceeds from the issue of debt securities – 299.2 Payments made for share buyback (175.2) – Equity dividends paid to owners of the parent (188.1) (186.2) Employee Benefit Trust purchase of own shares (14.6) (6.7) Net cash flow (used in)/generated from financingactivities (393.1) 95.8 Net (decrease)/increase in cash and cash equivalents (0.9) 1.4 Cash and cash equivalents at the beginning of theyear 1.8 0.4 Cash and cash equivalents at the end of the year 0.9 1.8 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and^{}[] Company Information 185 Company Financial Statements continued # Notes to the Company Financial Statements ## 1. General information and basis of preparation ### General information The Financial Statements of IG Group Holdings plc (the Company) for the year ended 31 May 2023 were authorised for issue by the Board of Directors on 19 July 2023 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. ### Basis of preparation 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 2023 affecting these separate Financial Statements. The Financial Statements have been prepared under the historical cost convention and in conformity with UK-adopted International Accounting Standards require use of certain critical accounting estimates. It also require 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 the Company has not been presented in these Financial Statements. The amount of profit for the year included within the Financial Statements of the Company is £423.4 million (31 May 2022: £375.9 million). A Statement of Comprehensive Income has also not been presented in these Financial Statements. No items of other comprehensive income arose in the year (31 May 2022: £nil). The Company's functional currency and presentational currency is sterling. ## 2. Significant 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 exists. 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 VIU calculations 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 shareholder's 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 2022: nil). ## 6. Investment in subsidiaries | | 31 May 2023 £m | 31 May 2022 £m | | --- | --- | --- | | **Cost** | | | | At the beginning of the year | 1,076.3 | 553.3 | | Additions | 10.9 | 1,027.1 | | Disposals | - | (504.1) | | **At the end of the year** | **1,087.2** | **1,076.3** | The Company's direct and indirectly owned subsidiaries are disclosed in note 34 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 also includes equity-settled share-based awards for employees of subsidiaries of £10.9 million (31 May 2022: £13.6 million). Shareholder and ### 186 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information Company Financial Statementscontinued Notes to the Company Financial Statementscontinued | 7. Leases | | | | | 8. Cash flow information | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | (i) Right-of-use asset | | | | | | Year ended | | Year ended | | | | | | | | | 31 May 2023 | | 31 May 2022 | | | | 31 May 2023 | | 31 May 2022 | | | | | | | | | | | | | | | £m | | £m | | | | £m | | £m | | | | | | Operating activities Cost Operating loss (6.4) (9.0) At the beginning of the year 9.7 9.2 Dividends received 430.0 385.0 Additions 0.4 0.5 Lease asset depreciation 1.8 1.6 At the end of the year 10.1 9.7 Increase in trade and other receivables (204.9) (169.0) Accumulated depreciation Increase/(decrease) in trade and other payables 171.7 (4.7) At beginning of the year 4.7 3.1 Cash generated from operations 392.2 203.9 Provided during the year 1.8 1.6 At the end of the year 6.5 4.7 Liabilities arising from financing activities Debt securities Net book value 3.6 5.0 in issue Leases Share buyback Total £m £m £m £m The Company’s right-of-use asset represents the commercial lease for office space. The table As at 1 June 2021 – 7.8 – 7.8 below shows the discounted rental commitments under non-cancellable operating leases. Issued debt securities 299.2 – – 299.2 31 May 2023 31 May 2022 Financing arrangement fees (2.1) – – (2.1) Future minimum payments due £m £m Unwind of capitalised financing fees 0.1 – – 0.1 Lease payments made in the year – (2.1) – (2.1) Not later than one year 2.6 2.1 Unwinding of discount – 0.2 – 0.2 After one year but not more than five years 2.2 4.3 Changes to existing lease 4.8 6.4 agreements – 0.5 – 0.5 As at 31 May 2022 297.2 6.4 – 303.6 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. As at 1 June 2022 297.2 6.4 – 303.6 Shares repurchased by broker (ii) Lease liability 31 May 2023 31 May 2022 (including costs) – – 177.3 177.3 Future minimum payments due £m £m Payments made for share buyback – – (175.2) (175.2) Financing arrangement fees (0.3) – – (0.3) Within one year 2.6 2.1 Unwind of capitalised financing fees 0.7 – – 0.7 After one year but not more than five years 2.5 4.5 Lease payments made in the year – (2.2) – (2.2) 5.1 6.6 Unwinding of discount – 0.2 – 0.2 Changes to existing lease agreements – 0.4 – 0.4 As at 31 May 2023 297.6 4.8 2.1 304.5 Shareholder and ### IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements 187 Company Information Company Financial Statementscontinued Notes to the Company Financial Statementscontinued | 9. Other receivables | | | | | | 11. Other payables | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | 31 May 2023 | | | 31 May 2022 | | | 31 May 2023 | | | 31 May 2022 | | | | | | £m | | £m | | | | £m | | £m | | Amounts due from Group companies (current) | | | | | | Amounts due to Group companies | | | | | | | – IG Markets Limited 589.1 370.3 | | | | | | – IG Markets Limited 180.0 – | | | | | | | – IG Index Limited 8.6 11.1 | | | | | | – Other Group companies 0.1 – | | | | | | | – Other Group companies 3.0 0.8 | | | | | | Accruals and provisions 7.1 13.9 | | | | | | | Other debtors – 0.9 | | | | | | Other taxes and social security 1.8 – | | | | | | | | | 600.7 383.1 | | | | | | 189.0 13.9 | | | | | All amounts above are repayable on demand and are non-interest bearing. | | | | | | All amounts due to Group companies 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 12. Share capital and share premium £589.1 million due from IG Markets Limited outlined above, the Company has entered into an Share capital and share premium is disclosed within note 24 of the Group Financial Statements. agreement with IG Markets Limited to provide a £298.3 million loan to be repaid as one final | payment in November 2028. This is classified within non-current other receivables in the | 13. Related party transactions | | | | | | --- | --- | --- | --- | --- | --- | | Statement of Financial Position. | Transactions with related parties are as follows: | | | | | | | | 31 May 2023 | | 31 May 2022 | | | 10. Debt securities in issue | | | £m | | £m | In FY22 the Company issued £300.0 million 3.125% senior unsecured bonds due in 2028. The Income issued debt has been recognised at fair value less transaction fees. As at 31 May 2023, £1.7 Subsidiary – dividends 430.0 385.0 million unamortised arrangement fees remain on the Statement of Financial Position (31 May 2022: £2.0 million). 430.0 385.0 The Company also has access to a £350.0 million revolving credit facility, which has increased as a result of two accordions to the existing revolving credit facility being signed in FY23. The Finance income Company has the option to request an increase in the revolving credit facility size to £400.0 Subsidiary 13.2 5.1 million. The Company also had the option to request a maturity extension of one year, which 13.2 5.1 was exercised in FY23. The revolving credit facility will now mature in October 2025. In addition, the Company has the option to extend the maturity for a further year, subject to borrower Refer to note 9 and note 11 for balances outstanding in respect of related parties. request and lender consent. 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 year. Shareholder and ### 188 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information Company Financial Statementscontinued Notes to the Company Financial Statementscontinued | 14. Other reserves | | | | | | 17. Financial risk management | | --- | --- | --- | --- | --- | --- | --- | | | | Own shares held | | | | Financial risks arising from financial instruments are managed at a Group-wide level and details | | | Share-based | | in Employee | Share buyback | Total other | | are in the Risk Management section of the Group Annual Report. payments Benefit Trusts reserve reserves £m £m £m £m Credit risk At 1 June 2021 9.5 (1.6) – 7.9 Held within other receivables are amounts receivable by the Company from related parties that Equity-settled employee share-based are unrated. The Directors consider the Company’s receivables to be recoverable as they are payments 13.6 – – 13.6 with Group companies and the companies have adequate resource to ensure repayment in full. Therefore, credit risk is minimal. Exercise of employee share awards (2.3) 2.3 – – Employee Benefit Trust purchase of Liquidity risk shares – (6.7) – (6.7) The tables below analyse the Company’s financial liabilities into relevant maturity categories Transfer of vested awards from the based on their contractual maturities. The amounts disclosed in the table are the contractual share-based payments reserve (7.3) – – (7.3) undiscounted cash flows. The Company is able to obtain financial support from other Group companies if this is needed. Therefore, liquidity risk is minimal. At 31 May 2022 13.5 (6.0) – 7.5 31 May 2023 At 1 June 2022 13.5 (6.0) – 7.5 Within Between Over 1 year 2 and 5 years 5 years Total Carrying amount Equity-settled employee share-based £m £m £m £m £m payments 13.3 – – 13.3 Debt securities in issue 9.4 37.5 304.4 351.3 297.6 Exercise of employee share awards (11.3) 11.3 – – Lease liabilities 2.6 2.5 – 5.1 4.8 Employee Benefit Trust purchase of shares – (14.6) – (14.6) Total 12.0 40.0 304.4 356.4 302.4 Transfer of vested awards from the | share-based payments reserve (7.6) – – (7.6) | | | | | | 31 May 2022 | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Share-based payments converted to | Within | | | Between | | | Over | | | | | cash-settled liabilities (2.4) – – (2.4) | 1 year | | 2 and 5 years | | | | 5 years | Total | Carrying amount | | | | | £m | | | £m | | £m | £m | | £m | Share buyback – – (2.1) (2.1) Debt securities in issue 9.4 37.6 304.7 351.7 299.2 At 31 May 2023 5.5 (9.3) (2.1) (5.9) Lease liabilities 2.1 4.5 – 6.6 6.6 Total 11.5 42.1 304.7 358.3 305.8 15. Directors’ shareholdings The Directors of the Company hold shares as disclosed in the Remuneration Report in the Capital management Group Annual Report. The capital of the Company is managed as part of the capital of the Group. Full details are contained in the Group Financial Statements in note 29. 16. Contingent liabilities, provisions and guarantees 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 2023 was £7.0 million (31 May 2022 £0.2 million). Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 189IG GROUP HOLDINGS PLC Annual Report 2023 Company Information Company Financial Statementscontinued Notes to the Company Financial Statementscontinued 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 35. 19. Dividends paid and proposed The dividends paid and proposed by the Company are the same as those disclosed in the notes to the Group Financial Statements in note 11. Shareholder and ### 190 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information ### Shareholder and Company Information | Shareholder information | Dividend dates | Registered office | Independent Auditors | | --- | --- | --- | --- | | Shareholder communications | Ex-dividend date 21 September 2023 | Cannon Bridge House | PricewaterhouseCoopers LLP | | You can opt to receive communications | Record date 22 September 2023 | 25 Dowgate Hill | Chartered Accountants and Statutory | | from us by email rather than by post | Last day to elect | London | Auditors | | and we will email you whenever we add | for dividend | EC4R 2YA | 7 More London Riverside | | shareholder communications to the | reinvestment plan 28 September 2023 | | London | Bankers Company website. To set this up, please visit Final dividend SE1 2RT Barclays Bank plc www.investorcentre.co.uk/ecomms and payment date 19 October 2023 1 Churchill Place Solicitors register for electronic communications. | | Annual shareholder calendar | London | Linklaters LLP | | --- | --- | --- | --- | | If you wish to change this instruction | Company reporting | E14 5HP | 1 Silk Street | | you can do so by contacting our | Final results announced 20 July 2023 | | London | HSBC Holdings plc Registrar at the address shown below. Annual Report published 15 August 2023 EC2Y 8HQ 8 Canada Square You can also make this request online Annual General Meeting 20 September 2023 London Registrar via your Investor Centre account. E14 5HQ Computershare Investor Services PLC The Registrar can also be contacted by Company information The Pavilions Lloyds Banking Group plc telephone on +44 (0)371 495 2032. Calls to Directors (as at 19 July 2023) Bridgewater Road 25 Gresham Street this number cost no more than a national rate Executive Directors Bristol London call from any type of phone or provider. These J Y Felix (Chief Executive Officer) BS99 6ZZ EC2V 7HN prices are for indication purposes only; if in C A Rozes (Chief Financial Officer and Acting doubt, please check the cost of calling this Chief Executive Officer) Royal Bank of Scotland plc number with your phone line provider. Lines J M Noble (Chief Operating Officer) 36 St Andrew Square are open 8.30am to 5.30pm, Monday to Edinburgh Non-Executive Directors Friday excluding bank holidays. EH2 2YB R M McTighe (Chair) Shareholder enquiries J P Moulds Brokers If you have any queries relating to your R Bhasin Barclays Bank plc shareholding, dividend payments, lost share A Didham 5 The North Colonnade certificates, or change of personal details, Wu Gang Canary Wharf please contact Computershare by visiting S-A Hibberd London www.investorcentre.co.uk or by using the M Le May E14 4BB | contact details above. | S Skerritt | | | --- | --- | --- | | | H C Stevenson | Numis Securities Limited | | American Depositary Receipts (ADRs) | | 45 Gresham Street | | IG’s ADR programme trades in the US OTC | Company Secretary | | London market, under the symbol IGGHY. Each ADR A Gibbs EC2V 7BF currently represents one ordinary share. Registered number 04677092 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and Company Information < > 191 # Appendices Appendix 1 | Adjusted net trading revenue | | | | | --- | --- | --- | --- | | £m | FY23 | FY22 | Change % | | Net trading revenue (Note 3) | 941.8 | 972.3 | (3%) | | Interest income on client funds | 81.8 | 3.5 | Nm | | Interest expense on client funds | (1.0) | (2.7) | (63%) | | FX gain associated with tastytrade acquisition | - | (5.8) | Nm | | Adjusted total revenue | 1,022.6 | 967.3 | 6% | Adjusted operating costs | £m | FY23 | FY22 | | --- | --- | --- | | Operating costs (Note 4) | 583.8 | 499.2 | | → Net credit losses on financial assets | 1.1 | 2.7 | | Operating costs inc. net credit losses | 584.9 | 501.9 | | → Operating costs relating to the tastytrade acquisition and integration | (2.7) | (2.0) | | → Amortisation on tastytrade acquisition intangibles and recurring non-cash costs | (37.0) | (31.7) | | → Operating costs relating to the proposed Nadex sale | (4.2) | (3.3) | | Adjusted operating costs | 541.0 | 464.9 | Adjusted profit before tax and earnings per share | £m (unless stated) | FY23 | FY22 | | --- | --- | --- | | Earnings per share (p) (Consolidated Income Statement) | 86.9 | 92.9 | | Weighted average number of shares for the calculation of EPS (millions) (note 10) | 418.7 | 426.3 | | Profit after tax (Consolidated Income Statement) | 363.7 | 396.1 | | Tax expense (Consolidated Income Statement) | 86.2 | 80.9 | | Profit before tax (Consolidated Income Statement) | 449.9 | 477.0 | | → Hedging gain on tastytrade acquisition | - | (5.8) | | → Operating income relating to NADEX sale | (3.3) | (1.5) | | → Operating costs relating to the tastytrade acquisition and integration | 2.7 | 2.0 | | → Amortisation on tastytrade acquisition intangibles and recurring non-cash costs | 37.0 | 31.7 | | → Operating costs relating to NADEX sale | 4.2 | 3.3 | | → Financing costs relating to the debt issuance | - | 1.0 | | → Gains on sale of Small Exchange and disposal of Zero Hash | - | (4.1) | | → Movement in the FV of convertible debt associated with Zero Hash | - | (9.3) | | Adjusted profit before tax (A) | 490.5 | 494.3 | | Adjusted tax expense | (94.0) | (83.8) | | Adjusted profit after tax | 396.5 | 410.5 | | Adjusted earnings per share (pence per share) | 94.7 | 96.3 | | Adjusted revenue (B) | 1,022.6 | 967.3 | | Adjusted PBT margin (A/B) % | 48.0% | 51.1% | Shareholder and ### 192 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information Appendicescontinued | High Potential Markets total revenue – pro forma | | | | | | Net amounts due from brokers | | --- | --- | --- | --- | --- | --- | --- | | | Pro forma | | Change | | Pro forma | £m FY23 FY22 | | £m FY23 FY22 | | FY22 | | % | change % | | Financial investments – UK Government securities held at brokers High Potential Markets 207.0 139.7 148.3 48% 40% (note 15) 372.3 289.9 tastytrade 170.3 111.9 120.5 52% 41% Trade receivables – amounts due from broker (note 17) 486.6 381.0 Trade payables – amounts due to broker (note 21) (48.6) (28.0) Other assets (note 18) 15.0 14.2 Appendix 2 Net amounts due from brokers 825.3 657.1 Operating lease net assets Financial investments £m FY23 FY22 £m FY23 FY22 1 Right-of-use assets 18.5 19.9 Financial investments and financial assets pledged as collateral | Lease liabilities (current) (7.4) (8.9) | (note 15) 606.4 396.1 | | --- | --- | | Lease liabilities (non-current) (13.3) (13.0) | Less: Financial investments held at brokers (note 15) (372.3) (289.9) | | Operating lease liability (2.2) (2.0) | Financial investments 234.1 106.2 | 1 Amounts identified as right-of-use assets from “property, plant and equipment” Liquid asset threshold requirement Own cash £m FY23 FY22 £m FY23 FY22 Financial investments – regulatory liquidity requirements – 61.2 Cash and cash equivalents 798.5 1,246.4 Cash held to meet regulatory liquidity requirements 65.0 45.5 Financial investments – termed cash – 45.0 Net amounts due from brokers 65.0 106.7 Less: Cash held to meet regulatory liquidity requirements (65.0) (45.5) Less: Amounts due to the Pool (3.3) – Own funds in client money Own cash 730.2 1,245.9 £m FY23 FY22 Trade receivables – own funds in client money (note 17) 79.4 85.5 Issued debt 1 Less: Trade payables – amounts due to clients (4.3) (21.3) £m FY23 FY22 Own funds in client money 75.1 64.2 Debt securities in issue (297.6) (297.2) 1 Unamortised fees capitalised (1.7) (2.0) 1 Amounts considered as part of “own funds” Issued debt (299.3) (299.2) 1 Unamortised arrangement fees recognised in "debt securities in issue" IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Report Governance Report Financial Statements Shareholder and Company Information 193 Appendices continued Working capital | £m | FY23 | FY22 | | --- | --- | --- | | Prepayments (non-current) | 0.3 | – | | Prepayments (current) | 25.3 | 23.2 | | Amounts due from clients (note 17) | 4.4 | 3.0 | | Unamortised fees capitalised^{1} | 1.7 | 2.0 | | Other receivables | 10.0 | 9.8 | | Other payables (other borrowings) (note 22) | (1.2) | – | | Other payables (accruals) (note 22) | (109.4) | (112.6) | | Other payables (payroll taxes, social security and other taxes (note 22)) | (3.5) | (6.9) | | Trade payables – amounts due to clients^{2} | (2.0) | (1.0) | | **Working capital** | **(74.4)** | **(82.5)** | 1 Unamortised arrangement fees recognised in "debt securities in issue" 2 Amounts considered part of "working capital" Net own funds generated from operations | £m | FY23 | FY22 | | --- | --- | --- | | Cash generated from operations | 221.4 | 810.6 | | Interest received on client funds | 75.8 | 3.5 | | Interest paid on client funds | (1.0) | (2.7) | | Cash generated from operations | 296.2 | 811.4 | | ➔ Increase in other assets | (0.8) | (16.1) | | ➔ Increase in trade payables | 95.3 | (209.4) | | ➔ Increase in trade receivables | 102.5 | (37.7) | | ➔ Repayment of lease liabilities | (7.1) | (7.5) | | ➔ Interest paid on lease liabilities | (0.5) | (0.6) | | ➔ Fair value movement in Gilts | (18.1) | (3.6) | | **Own funds generated from operations (A)** | **467.5** | **536.5** | | **Profit before taxation (B)** | **449.9** | **477.0** | | **Conversion rate from profit to cash (A/B) %** | **104%** | **112%** | Net own funds movement from acquisitions and disposals of investments in subsidiaries and associates | £m | FY23 | FY22 | | --- | --- | --- | | Net cash flow to investment in associates | – | (1.9) | | Net proceeds from disposal of subsidiaries | 1.8 | 143.3 | | Proceeds from disposal of investments in associates, net of cash disposed | 0.2 | 24.5 | | Net cash flow to acquire subsidiaries | (4.8) | (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** | **(2.8)** | **(14.7)** | Shareholder and ### 194 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information ### Group-wide Key Performance Indicator (KPI) Definitions Net trading revenue (£m) Employee engagement score (%) Represents the transaction fees paid by Represents the average score of four key clients (client income), net of introducing questions from or annual employee survey. partner commissions, our external hedging costs, client trading profit and losses, and Gender diversity (%) corresponding hedging profits and losses. Represents the percentage of women employed across the Group. Total revenue (£m) Represents the sum of net trading revenue ESG KPI: scope 1–3 greenhouse gas and interest income. emissions per employee (TCO 2 e) Total scope 1–3 greenhouse gas emissions Net operating income (£m) in the financial year, divided by average Represents trading revenue, interest income headcount during the year. and other operating income, net of introducing partner commissions, betting ESG KPI: people benefiting from our duty and financial transaction taxes. Brighter Future initiatives globally Represents the total number of people Net trading revenue generated from benefiting from collaboration between non-OTC products (%) IG Group and charity partners such as Represents net trading revenue generated Teach First. This includes both direct and from exchange traded derivatives and stock indirect impact. trading and investments. Adjusted profit before tax margin (%) Represents 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) Represents the level of net own funds (cash) that we generate from our operations after deductions for taxes. Total number of active clients (000) Represents the total number of unique clients who have generated trading revenue from our OTC or ETD products, or stock trading and investment clients who held a balance at the period end. Shareholder and ### Introduction Strategic Repot Governance Repot Financial Statements 195IG GROUP HOLDINGS PLC Annual Report 2023 Company Information ### Notes Shareholder and ### 196 IG GROUP HOLDINGS PLC Annual Report 2023 Introduction Strategic Repot Governance Repot Financial Statements Company Information ### Notes Cautionary statement Certain statements included in our 2023 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. 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 QR CODE WATCH THE VIDEO FRONT COVER IG BRAND CAMPAIGN GERMANY