Strategic Report | Governance | Financial Statements ![img-0.jpeg](img-0.jpeg) ## OUR PURPOSE To enable trusted and intuitive access to financial opportunities for our customers - Across devices and platforms Through best-in-class proprietary technology - Across the globe Through global scale with localised services - Across financial instruments Through a broad range of innovative products Read more on pages 6 to 8 ![img-1.jpeg](img-1.jpeg) ## OUR STRATEGY Well positioned to access a range of significant growth opportunities Plus500's strategy is to continue to develop its position as a leading global multi-asset fintech group by: - Deepening engagement with customers - Expanding its offering in existing markets - Launching new products - Entering new markets Read more on pages 12 to 15 ![img-2.jpeg](img-2.jpeg) ## OUR VALUES - Strive for excellence Offering a best-in-class technology - Customer-centric approach Customers are at the centre of every decision the Group makes, to ensure high service levels - Committed to operating sustainably and responsibly Plus500 is focused on carrying out a range of sustainability initiatives to deliver tangible value for stakeholders - Unique organisational culture Plus500 operates an entrepreneurial and high-performance organisational culture to empower employee development Read more on pages 30 to 36 # OUR COMPETITIVE ADVANTAGES AND DIFFERENTIATORS ### Our technology Powers our products, operations, marketing and our approach to risk management - Proprietary, wholly owned, managed and operated by Plus500 - Drives our customer-centric approach - Continued significant investment in R&D to drive on-going innovation - Supports our continued alignment with relevant global regulatory standards and best practices ### Our track record Strong financial performance since IPO in 2013 - 20% compound annual revenue growth rate - Flexible cost base with average annual EBITDA margin of c.56% - Reinforced financial position, with a strong balance sheet, high levels of cash generation and debt-free since inception - Approximately $2.1bn returned to shareholders in dividends and share buybacks, including $175.0m announced in February 2024 ### Our leadership, people and culture Technological expertise embedded across the business - Highly skilled leadership team with long-standing technological experience - Strong track record in attracting and retaining the best technology talent in Israel, the "start-up nation" - Entrepreneurial, high-performance culture, to empower employee development ### Our agile business model Ensuring a customer-centric approach - Unique edge in attracting and retaining customers through multiple online marketing channels - Proven business model serving customers globally - Highly focused on customer care and protection - Continuing to develop a leading position as a global multi-asset fintech group Plus500 Ltd. 2023 Annual Report 5 --- Strategic Report | Governance | Financial Statements # CHAIR'S STATEMENT # PLUS500 CONTINUES TO FOCUS ON EXECUTION OF ITS STRATEGIC GOALS ![img-3.jpeg](img-3.jpeg) “Plus500 delivered further financial and operational progress during FY 2023. This included working to deliver our strategic roadmap and maintaining our high standards of governance and focusing on our ESG priorities. The Board and I look to 2024 and beyond with confidence.” **Prof. Jacob A. Frenkel** Chair ## Introduction In FY 2023, Plus500 delivered excellent strategic and operational progress, including growth in new markets, product expansion and technological innovation, all combined with significant shareholder returns of over $365m during the year. The Board and I are proud to be part of Plus500 at this important point in the Group’s history. There are a number of substantial growth avenues ahead of us and we remain committed to continue to deliver results for the benefit of our stakeholders. I would like to thank everyone in the Group for their hard work, diligence and focus on delivering the collective ambitions that we have for Plus500, including providing customers with intuitive trading platforms in various markets around the world. We deploy our proprietary technology, which has been developed in-house, and is a source of significant competitive advantage for us. ## A robust financial performance coupled with significant shareholder returns Plus500 delivered a robust financial performance in FY 2023, despite lower levels of trading activity seen across the global financial markets during the year. This performance was enabled by the Group’s superior technology, its focus on higher value customers and its on-going investment in its technological capabilities. The Group also continued to focus on its extremely high standards of corporate governance and its priorities within ESG. Reflecting the Board’s confidence in the outlook for the Group, further shareholder returns totalling $175.0m were announced in February 2024, which includes dividends of $75.0m and share buyback programmes of $100.0m, building on the c.$350m of shareholder returns announced previously during FY 2023. ## Strategic progress and continued innovation delivered in FY 2023 In last year’s Annual Report, I shared the strategic vision for our businesses in the US futures market and Japan. I am pleased to report that we have delivered good progress in these areas during FY 2023. In FY 2023, Plus500 made significant strides towards its strategic roadmap of accessing new markets and developing new products and services for its customers. During the year, Plus500’s US futures businesses made great progress, in both its B2B (Institutional) and its B2C (Retail) offerings. ## Delivering growth through new markets and new products Plus500 has a well-established track record of delivering growth and innovation for its stakeholders, and the Board and I remain committed to making sure the Group is continuing to deliver such important innovation in the future. Over the medium-term, the Group’s strategic roadmap aims to deliver new products, including non-OTC products, as well as access to new markets. It also aims to expand the Group’s existing OTC offering while deepening the engagement we have today with our customers. Plus500 Ltd. 2023 Annual Report | 6 --- Strategic Report | Governance | Financial Statements ## The Board remains focused on corporate governance and investor engagement I would like to honour the memory of Ms. Sigalia Heifetz, one of our Non-Executive Directors, who sadly passed away in December 2023. Sigalia joined the Board in February 2021 and her experience, wisdom and counsel during that time were invaluable to us all. The Board and I would like to express our sincere appreciation for her significant contribution. Corporate governance remained a key theme for the Board during FY 2023, and I am delighted that we have managed to preserve the Board's diversification, in line with the UK Corporate Governance Code 2018 (the "Code") and the recommendations of the FTSE Women Leaders Review and the Listing Rules on gender equality in leadership positions. At our recent Extraordinary General Meeting held on 8 January 2024, our shareholders approved the appointment of Ms. Anne Grim as an Independent Non-Executive Director for a one-year term commencing as of that date and of Ms. Tami Gottlieb for her second three-year term as an Independent Non-Executive Director and External Director commencing as of 16 March 2024. Also in this EGM, our shareholders approved the appointment of Mr. Daniel King as an additional Independent Non-Executive Director and External Director, and he will join our Board in June 2024 as an additional External Director, alongside Tami Gottlieb. Shareholder engagement remained highly important to us, and during the year I met with a number of our major shareholders to ask for feedback on the Company's approach to governance, its strategic priorities and its operational and financial performance. I will continue to meet regularly with key investors to ensure we keep representing investors' interests. For further details, please see our Governance Report on page 54 onwards. ## THE PLUS500 INVESTMENT CASE Our purpose is being delivered by a clear investment case ![img-4.jpeg](img-4.jpeg) Consistent track record of growth and delivery, supported by our long-term, high value customer base ![img-5.jpeg](img-5.jpeg) Proprietary technology is Plus500's key source of competitive advantage and enabler ![img-6.jpeg](img-6.jpeg) Plus500 is diversified across its product portfolio and global geographic footprint ![img-7.jpeg](img-7.jpeg) Growth supported by organic investments and targeted bolt-on acquisitions ![img-8.jpeg](img-8.jpeg) Robust financial position with a significant cash balance and no debt since inception ![img-9.jpeg](img-9.jpeg) Attractive and sustainable shareholder returns through dividends and share buybacks Plus500 Ltd. 2023 Annual Report 7 --- Strategic Report | Governance | Financial Statements # CHAIR'S STATEMENT CONTINUED ## Continued focus on key ESG priorities During FY 2023, the Board has continued to develop and strengthen Plus500's ESG framework, led by its ESG Committee, to further assess the Group's priorities and risks in the continually developing area of ESG. Chaired by Mr. Steve Baldwin, and supported by our ESG internal working group, alongside external ESG advisors, the ESG Committee reviewed the Group's Environmental Policy and made sure we continue to be aligned with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. We also remain focused on a number of other important ESG priorities, including customer care and protection, employee welfare, well-being and development, as well as engagement and volunteering in the communities in which the Group operates. Further details are available in our ESG Report, TCFD Report and in the Report of the ESG Committee. ## Regulatory compliance remains a major area of Board and management focus The Group maintains a highly robust, customer-centric approach to compliance, supported by our expertise in the relevant global regulatory standards and our teams' long-standing relationships with the regulators in the markets and industries in which we operate. We also have the relevant technological skills and capabilities to ensure that we can efficiently react with speed to any regulatory changes that occur. This approach has continued to deliver consistent results and has helped to support our performance since Plus500's inception. With an established global regulatory network, managed by our regulated subsidiaries and coordinated centrally, the Group remains well positioned to cater for the regulatory framework across the markets in which we operate. ## Established track record of shareholder returns The Board has a clear capital allocation framework, based on the on-going assessment of the availability of excess capital going forward, to ensure there continues to be an optimal balance between shareholder returns, investments in future growth and in driving business continuity over the long-term. In particular, and aligned to this framework, the Board will continue to ensure that appropriate levels of capital are maintained for working capital and other factors to drive future growth. During FY 2023, Plus500 announced approximately $350m of total shareholder returns, comprising share buyback programmes of $257.5m, including $127.5m through the repurchase of shares executed on 13 June 2023, and total dividends of $90.0m. In addition, in February 2024, additional share buyback programmes and dividends were announced as part of the Group's FY 2023 preliminary results, including buyback programmes of $100.0m and dividends of $75.0m. Since the Company's IPO in 2013, Plus500 has delivered attractive returns to shareholders of approximately $2.1 billion in aggregate through dividends and share buybacks (including the returns announced in February 2024). I look forward to updating our valued shareholders regarding the Group's further progress during 2024 in next year's Annual Report. Prof. Jacob A. Frenkel Chair of the Board 29 March 2024 Plus500 Ltd. 2023 Annual Report | 8 --- Strategic Report | Governance | Financial Statements CHIEF EXECUTIVE OFFICER REVIEW # DELIVERING VALUE FOR SHAREHOLDERS THROUGH OUR PROPRIETARY TECHNOLOGY ![img-10.jpeg](img-10.jpeg) "I am pleased to report on another excellent set of results for Plus500. During 2023, the Group continued to go from strength to strength, delivering strategic, financial and operational progress." David Zruia Chief Executive Officer ## Review of 2023 ### Introduction Three years ago, Plus500 formulated its new strategic roadmap to become a global, multi-asset fintech group supported by its proprietary technology and robust financial position. The strategic roadmap included targets to expand into new markets, develop new products (including non-OTC products), services and features, and to deepen relationships with customers. Since then, Plus500 has evolved from being a technology company with a leading OTC proprietary offering, to a diversified, multi-asset global business, offering a wide range of technologies which provides access to a variety of financial trading products and services in the futures and options on futures markets, as well as the Group's share dealing platform. The Group also continued to enhance its existing OTC offering by harnessing its market-leading technology and expertise in AI and big-data models to improve its customer retention efforts. After more than a decade as a highly successful publicly listed company on the London Stock Exchange, Plus500 has responsibly extended its footprint through a number of bolt-on acquisitions, deploying capital to acquire businesses in the US futures market and in the Japanese retail OTC market, providing the Group with an established position in these strategic, high-growth regions. In the US, Plus500's B2B (Institutional) business experienced significant growth across FY 2023 and 'Plus500 Futures', its retail trading platform, which was launched in 2023, has experienced good levels of traction with retail traders. The speed with which both the B2B (Institutional) and B2C (Retail) businesses have developed reflects the innovative and agile nature of the Group's operational and technological capabilities. In addition, the Group has developed enhanced trading platforms based on new technological solutions for these businesses and provides optimised service support, risk management and other solutions. In Japan, the Group has developed an FX OTC localised proprietary trading platform for retail traders, which went live in September 2023. ### Focus on higher value customers and customer retention The Group now has more than 26 million customers registered on its platforms globally, reflecting its continued focus on higher value customers and the strengths of its intuitive trading platforms. Customer deposits in FY 2023 stood at $2.4 billion and the average deposit per Active Customer rose to a record high of approximately $10,300 versus approximately $8,000 a year earlier. This progress demonstrates the successful nature of the Group's strategic decision to focus on attracting and retaining higher value customers, as well as the intuitive nature and reliability of its market-leading technology. ### Strategic progress made in the US futures market, in both the B2B (Institutional) and B2C (Retail) businesses The opportunities available to Plus500 in the US futures market are substantial and the Group is focused on delivering real value to shareholders through its expansion efforts in this market. The US futures market is sizeable and Plus500's technology-driven value proposition is unlocking a material, multi-year earnings opportunity through new and growing lines of business, spanning both B2B (Institutional) and B2C (Retail) channels. In an industry that has undergone little technological change in recent years, the Group has developed additional technological capabilities for institutional customers and launched a unique trading platform for retail customers. Plus500 now operates in the futures market at a structural advantage thanks to its high quality technology, enabling superior customer service, attractive commercial terms and other innovative operational capabilities new to this market. Plus500 Ltd. 2023 Annual Report 9 --- Strategic Report | Governance | Financial Statements # CHIEF EXECUTIVE OFFICER REVIEW CONTINUED The Group's US futures business performed well during FY 2023, growing revenue and customer numbers year-on-year. The Group is focused on continuing this positive momentum in the US and will launch new technologies to support its already enhanced customer offerings to drive revenue and profit growth. ## New memberships secured from Eurex Clearing AG (Eurex) and the Futures Industry Association (FIA) The Group is now a provider of market infrastructure services, including brokerage-execution and clearing services for institutional customers in the US futures market. During 2023, the business worked to increase the number of clearing memberships it possesses with other international clearing houses and will continue to do so. Since the acquisitions of Cunningham Commodities, a regulated Futures Commission Merchant (FCM) and Cunningham Trading Systems, a technology trading platform provider, the Group has secured full clearing memberships with the CME Group exchanges, as well as with the Minneapolis Grain Exchange (MGEX). In addition, the Group has recently secured a clearing membership of Eurex, the clearing house for the entire suite of products traded at Eurex Exchange, the leading European derivatives exchange and one of the largest futures and options markets globally. This significant milestone followed the recent receipt of a primary membership of the Futures Industry Association (FIA), the leading global trade organisation for futures, options and centrally cleared derivatives markets. Obtaining further clearing memberships will enable Plus500 to expand its network and customer services further and, subsequently, drive revenue growth. ## US B2B (Institutional) opportunity Good progress was made during the year in increasing the number of onboarded Introducing Brokers (IBs) and efforts to onboard further IBs will continue during 2024. Additionally, new technologies dedicated to the needs of the B2B (Institutional) line of business are expected to be launched later this year. ## US B2C (Retail) opportunity The launch of 'Plus500 Futures' during the period marked a significant strategic step for the Group in the US futures retail market, a market with compelling long-term growth characteristics. Plus500 is proud to offer an omni set solution enabling customers to be onboarded, deposit and trade with a seamless and unified experience across all elements of the customer journey. This significant milestone was enabled by Plus500's technological expertise and innovative approach. 'Plus500 Futures' is live and already benefiting from the full support of Plus500's sophisticated proprietary marketing technology, as well as other offline marketing initiatives such as the Chicago Bulls sponsorship. In 2024, the Group will continue to invest and support the 'Plus500 Futures' platform by expanding its product offering with new innovative features. ## Global portfolio of regulatory licences increased to 13 In 2023, Plus500 obtained two new regulatory licences, in the UAE and the Bahamas, which together take the Group's global portfolio of regulatory licences to 13. This global portfolio provides a significant source of competitive advantage and inherent value for Plus500, both in a monetary and operational sense. The UAE represents a significant and growing market for the Group and its business in this region is fully operational and developing quickly. The Group's customer base in the UAE is growing and Plus500's localised offering is benefiting from a greater understanding of this particular market. The Group will continue to develop its localised offering tailored for the UAE market. Building on its success of securing new regulatory licences, the Group will continue to target new regulatory licences globally, in 2024 and beyond, to support its strategic objective of entering new markets and offering new products. The Group's experience in obtaining new regulatory licences leaves it extremely well positioned to execute successfully against this objective. ## Plus500 remains committed to sustainability and inclusive access to financial trading products Plus500's objective is to provide trusted and intuitive access to financial products. It seeks to achieve this by offering a broad range of financial products, aligning its global scale with locally tailored offerings, all of which are powered by a best-in-class proprietary technology stack. Enabling customers to access the financial markets through the Group's intuitive, secure and user-friendly platforms forms a core part of Plus500's purpose-led mission, as is the Group's focus on customer care and best-in-class service. ![img-11.jpeg](img-11.jpeg) --- Strategic Report | Governance | Financial Statements The Group has greatly enhanced its educational content available to its customers, including the launch of an innovative Trading Academy portal in 2022 and 'Insights', a big-data, analytical tool designed to provide access to real time and historical trends, based on the Group's registered customer base. Plus500 also provides customers with greater technological solutions which enable more established customer experience and retention benefits. ## Operational and trading overview In terms of operational performance during FY 2023, the Group delivered a strong performance in its key metrics despite lower trading volumes in the global financial markets, supported by its on-going focus on attracting and retaining higher value customers. Customer retention has improved in recent years, with 88% of FY 2023 OTC revenue being derived from customers trading with Plus500 for more than a year (FY 2022: 87%), 59% from customers trading for more than three years (FY 2022: 40%) and 29% for more than five years (FY 2022: 24%), highlighting the increasing loyalty of its customers and their confidence in the Plus500 trading platforms. In addition, over 87% of OTC revenue was generated through mobile or tablet devices (FY 2022: over 85%), highlighting the strength of the Group's mobile offerings. ARPU reached a record annual level of $3,116 in FY 2023 (FY 2022: $2,966), which highlights the depth of the Group's product offering and the quality of its intuitive trading platforms. In addition, customer deposits continued to grow, with the average deposit per Active Customer also reaching a record annual level of approximately $10,300 (FY 2022: approximately $8,000), highlighting the continued strong level of confidence that customers have in Plus500 and the resilience of the Group's trading platforms. Total customer deposits in FY 2023 increased to $2.4 billion (FY 2022: $2.3 billion). With continued investment in strategic markets to attract higher value customers for the long-term, AUAC was $1,489 in FY 2023 (FY 2022: $1,481). The Group continues to expect that AUAC will rise steadily over time, as the Group's customer profile further shifts to higher value, long-term customers and as the Group invests in attracting customers to the new trading products in its portfolio and targeting additional high value customers in strategic geographies. The Group onboarded a total of 90,944 New Customers during the year (FY 2022: 106,549). This was underpinned by the continued investment in the Group's diversified marketing approach, which included its sophisticated proprietary marketing technology and a range of strategic initiatives and advertising campaigns. The number of Active Customers during FY 2023 remained robust at 233,037 (FY 2022: 280,769) thanks to the Group's customer retention, monetisation and activation technological capabilities. ## Outlook Based on Plus500's significant strategic, operational and financial progress over recent years, and the Group's robust financial position, the Board remains confident about the Group's future prospects. Plus500's strategic roadmap is designed to position the Group for key growth opportunities, including new products, services and markets, the expansion of its OTC, futures and share dealing offerings and the deepening of its customer engagement and retention initiatives. These growth opportunities will be accessed by the Group's on-going investment in developing its position as a global multi-asset fintech group, in particular through further organic investments in technology, marketing and people, as well as by actively targeting additional bolt-on acquisitions in selected markets and geographies. Over the medium-term, the Group is well placed to take advantage of the compelling growth opportunities in its end markets. Thanks to its proven business model, strong financial position and disciplined approach to capital allocation, the Group is focused on driving the sustainability of its revenues as it develops and invests in its position as a provider of market-leading B2C (Retail) and B2B (Institutional) infrastructure services in the US futures market. David Zruia Chief Executive Officer 29 March 2024 "In 2023, we achieved a record high average deposit per Active Customer reflecting our focus on higher value customers and the strength of our technology." Plus500 Ltd. 2023 Annual Report | 11 --- Strategic Report | Governance | Financial Statements STRATEGIC ROADMAP # OUR PURPOSE, STRATEGY AND KEY DIFFERENTIATORS Plus500's competitive advantages ensure that it is well positioned to continue diversifying its revenue streams, product range and geographic footprint. Our purpose is to enable trusted and intuitive access to financial opportunities for our customers, across a wide range of financial instruments, geographies and devices. Our position as a global multi-asset fintech group is well established and is supported by four key differentiators. ![img-12.jpeg](img-12.jpeg) ## 1. OUR POWERFUL PROPRIETARY TECHNOLOGY Plus500's proprietary technology remains its fundamental competitive advantage, enabling the Group to respond with agility and speed to customer requirements, fast-emerging market developments and regulatory changes. It has taken many years to develop this technology, enabling Plus500 to build upon a proven reputation for innovation and a market-leading technological capability. ## 88% of OTC revenue generated by customers trading with Plus500 for more than 1 year ![img-13.jpeg](img-13.jpeg) ## 2. OUR LONG TRACK RECORD Plus500 has built a long track record of financial performance, with 20% CAGR in revenue since IPO year 2013, and an average annual EBITDA margin of c.56% over that time. The Group has remained debt-free since inception and has continued to be highly cash generative over that time. ## $2.1BN Shareholder returns since IPO in 2013, including $175.0m announced in February 2024 Read more on pages 16 to 19 Read more on pages 42 to 44 Plus500 Ltd. 2023 Annual Report 12 --- Strategic Report | Governance | Financial Statements ![img-14.jpeg](img-14.jpeg) ### 3. OUR LEADERSHIP, PEOPLE AND CULTURE Plus500's operating track record and technology development are a testament to the quality of its people. The Group has fostered a high-performance organisational culture, reflecting Israel's innovative technology sector and environment. This has been led by a highly skilled management team, with specialist expertise and experience in technology. ### 550+ Our people at the end of FY 2023 ![img-15.jpeg](img-15.jpeg) ### 4. OUR AGILE BUSINESS MODEL Plus500's agile, customer-centric business model, with its unique edge in attracting and retaining customers through multiple channels, strong brand and continued focus on customer care and protection, has ensured that Plus500 has consistently driven an attractive marketing Return on Investment ("ROI") over time. ### 26+ MILLION Registered customers on Plus500's platforms globally Read more on pages 30 to 36 Read more on pages 22 to 23 Plus500 Ltd. 2023 Annual Report 13 --- Strategic Report | Governance | Financial Statements STRATEGY IN ACTION # CONTINUED OPERATIONAL AND STRATEGIC PROGRESS MADE IN THE US FUTURES MARKET ![img-16.jpeg](img-16.jpeg) Strategic progress was delivered in the US futures market in both the B2B (Institutional) and B2C (Retail) businesses and the opportunities available to Plus500 in this market are substantial. ## The US futures market presents a significant opportunity for Plus500 The opportunities available to Plus500 in the US futures market are substantial and the Group is focused on delivering real value to shareholders through its expansion efforts in this market. The US futures market is sizeable and Plus500's technology-driven value proposition is unlocking a material, multi-year earnings opportunity through new and growing lines of business, spanning both B2B (Institutional) and B2C (Retail) channels. In an industry that has undergone little technological change in recent years, the Group has developed additional technological capabilities for institutional customers and launched a unique trading platform for retail customers. Plus500 now operates in the futures market at a structural advantage thanks to its high quality technology, enabling superior customer service, attractive commercial terms and other innovative operational capabilities new to this market. The Group's US futures business performed well during FY 2023, growing revenue and customer numbers year-on-year. The Group is focused on continuing this positive momentum in the US and will launch new technologies to support its already enhanced customer offerings to drive revenue and profit growth. ![img-17.jpeg](img-17.jpeg) ![img-18.jpeg](img-18.jpeg) Plus500 Ltd. 2023 Annual Report 14 --- Strategic Report | Governance | Financial Statements ![img-19.jpeg](img-19.jpeg) ### New memberships secured from Eurex Clearing AG (Eurex) and the Futures Industry Association (FIA) The Group is now a provider of market infrastructure services, including brokerage-execution and clearing services for institutional customers in the US futures market. During 2023, the business worked to increase the number of clearing memberships it possesses with other international clearing houses and will continue to do so. Since the acquisitions of Cunningham Commodities, a regulated Futures Commission Merchant (FCM) and Cunningham Trading Systems, a technology trading platform provider, the Group has secured full clearing memberships with the CME Group exchanges, as well as with the Minneapolis Grain Exchange (MGEX). In addition, the Group has recently secured a clearing membership of Eurex, the clearing house for the entire suite of products traded at Eurex Exchange, the leading European derivatives exchange and one of the largest futures and options markets globally. This significant milestone followed the recent receipt of a primary membership of the Futures Industry Association (FIA), the leading global trade organisation for futures, options and centrally cleared derivatives markets. Obtaining further clearing memberships will enable Plus500 to expand its network and customer services further and, subsequently, drive revenue growth. ![img-20.jpeg](img-20.jpeg) ### US B2B (Institutional) opportunity Good progress was made during the year in increasing the number of onboarded IBs and institutional clients, and efforts to onboard further IBs will continue during 2024. Additionally, new technologies dedicated to the needs of the B2B (Institutional) line of business are expected to be launched later this year. ### US B2C (Retail) opportunity The launch of 'Plus500 Futures' during the period marked a significant strategic step for the Group in the US futures retail market, a market with compelling long-term growth characteristics. Plus500 is proud to offer an omni set solution, enabling customers to be onboarded, deposit and trade with a seamless and unified experience across all elements of the customer journey. This significant milestone was enabled by Plus500's technological expertise and innovative approach. 'Plus500 Futures' is live and already benefiting from the full support of Plus500's sophisticated proprietary marketing technology, as well as other offline marketing initiatives such as the Chicago Bulls sponsorship. In 2024, the Group will continue to invest and support the 'Plus500 Futures' platform by expanding its product offering with new innovative features. Plus500 Ltd. 2023 Annual Report 15 --- Strategic Report | Governance | Financial Statements LEADING MOBILE OFFERING # INNOVATIVE AND INTUITIVE PRODUCT OFFERING ACROSS MOBILE DEVICES ![img-21.jpeg](img-21.jpeg) Plus500's mobile offering provides customers with a seamless trading experience across mobile devices. ## Plus500's leading mobile offering across devices Plus500 has designed and developed a unique system architecture and mobile product offering, supported by its proprietary technology. A core part of the Plus500 customer experience is how well the Group's trading platforms are supported on mobile and tablet devices. Every customer interaction is designed to have the same look and feel, irrespective of how the customer accessed the platform. This provides a more consistent trading experience for the customer. As a result, over 87% of OTC revenue in FY 2023 was generated from customers trading with Plus500 on mobile or tablet devices, highlighting the strength of the Group's mobile offering, and over 82% of OTC trades took place on mobile or tablet devices. Plus500 will continue to invest in its mobile offering to ensure that customers continue to benefit from the reliable trading platforms and the seamless experience it offers. ![img-22.jpeg](img-22.jpeg) ![img-23.jpeg](img-23.jpeg) Plus500 Ltd. 2023 Annual Report 16 --- Strategic Report | Governance | Financial Statements # A FOCUSED TRADING EXPERIENCE FOR CUSTOMERS ![img-24.jpeg](img-24.jpeg) Our core OTC product offering, available across over 2,500 underlying financial instruments internationally ![img-25.jpeg](img-25.jpeg) Our proprietary trading platform designed for US retail customers to access the futures market ![img-26.jpeg](img-26.jpeg) Our proprietary share dealing platform, available in mobile applications across European markets ![img-27.jpeg](img-27.jpeg) Our big-data, analytical tool designed to provide OTC customers with access to real-time and historical trends, based on our registered customer base ![img-28.jpeg](img-28.jpeg) Our educational portal for customers, which includes training videos, an eBook, relevant news alerts and detailed FAQs on key trading dynamics Plus500 Ltd. 2023 Annual Report 17 --- Strategic Report | Governance | Financial Statements BEST-IN-CLASS TECHNOLOGY # PLUS500'S MARKET-LEADING PROPRIETARY TECHNOLOGY CAPABILITY The Group has continuously driven technological innovation to provide customers with a best-in-class experience. ![img-29.jpeg](img-29.jpeg) ## Supporting the customer journey across our technology stack Plus500's technology powers its operations and trading platforms, and is supported by an industry-leading, full-stack R&D team. The Group has continuously driven technological innovation to provide customers with a best-in-class experience. ## Marketing Plus500's technology ensures that online marketing campaigns achieve an attractive ROI. The marketing technology includes artificial intelligence characteristics and its optimisation process is made as a result of its big-data capabilities. ## Operations Once a customer has decided independently to open an account on a Plus500 platform, the operational element of our technology is initiated. At that point, customers go through a stringent, rigorous verification and onboarding process, in accordance with the applicable regulation, supported by 24/7 localised customer care and a best-in-class payment processing service, utilising a range of possible payment methods for our customers. This is all achieved "behind the scenes", ensuring the customer experience remains efficient and seamless. ## Product The on-going product experience is a critical element of the customer journey. This element of the customer experience includes a range of educational and training tools, which is continuously updated and upgraded, through new features, new analysis tools, new products and new financial instruments. All of these dynamics enable Plus500 to drive customer retention and value over time. ## Systems infrastructure The customer journey is supported and secured by a robust systems infrastructure, with a powerful proprietary CRM platform, cyber security and anti-fraud protection features and a robust risk management framework. These elements are a crucial part of Plus500's wholly owned technology. Its scalable and reliable systems architecture also facilitates the customer journey. ## Innovating products through our proprietary technology Plus500 offers its customers a range of trading products, including its market-leading and long-standing OTC product offering in many different countries around the world, share dealing and futures and options on futures to retail customers in the US. Through its OTC product portfolio, Plus500 offers over 2,500 different underlying global financial instruments for customers using its platform across more than 60 countries and in 30 languages. As an example of the Group's consistent delivery of innovative technology solutions, during 2023, Plus500's localised trading platform in Japan went live. The platform caters to the Japanese retail market, one of the largest retail investor markets globally. The platform's initial offering includes approximately 50 FX OTC pairings, and the Group aims to enhance its local product range with additional asset classes and new trading products. ## >82% of customer trades on Plus500's OTC platform took place on mobile or tablet devices in FY 2023 ## >2,500 Different underlying OTC financial instruments Plus500 Ltd. 2023 Annual Report 18 --- Strategic Report | Governance | Financial Statements # PROPRIETARY TECHNOLOGY IS OUR KEY ENABLER Front-End and Back-End CRM Cashier Technology Marketing Technology, AI & Big-Data Systems Architecture Automated Verification Technologies Analysis Tools Risk Management Technology Plus500's technology supports all of its operations, products, marketing capabilities, customer service and it is underpinned by a robust system architecture. # AGILE AND EFFICIENT CUSTOMER JOURNEY ACROSS OUR TECHNOLOGY STACK Marketing technology Onboarding Payment processing Risk management Marketing Operations Product Verification Customer service Trading solutions New product offerings The journey for a Plus500 customer is supported by technology at every stage. This includes customer acquisition, registration, onboarding, payments and cashier management. It also supports the Group's product offering, including risk management and trading. Plus500 Ltd. 2023 Annual Report 19 --- Strategic Report | Governance | Financial Statements # REPORT ON THE TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (TCFD) # MINIMISING OUR ENVIRONMENTAL IMPACT The Group is committed to managing its environmental impact, which results from the energy usage relating to the maintenance of the Group's IT infrastructure and the operation of its network of offices around the world. As a technology business, Plus500 does not carry out any industrial activity, is not involved in anything which would emit environmentally harmful substances and has a relatively low environmental impact. However, the Group aims to ensure that it conducts appropriate and necessary actions to minimise the impact of its infrastructure and operations on the environment, with commitments to: - Protect the environment; - Reduce waste, as well as water, energy and resource use; - Monitor the Group's environmental performance; - Provide environmental training for employees; and - Ensure that office services are sourced from providers that share these commitments. Plus500 received no environmental fines or penalties in FY 2023, nor in the prior two fiscal years. ## Emissions reporting The tables on page 39 outline the Group's energy and emissions output over the last two years, particularly in relation to Scope 2 emissions, which have been calculated using a location-based calculation method based on the Greenhouse Gas Protocol (the Group does not emit any Scope 1 emissions, given the nature of its business). The two factors within the Group's business with the most significant potential environmental impact, in relation to emissions, are: - The maintenance of Plus500's technology infrastructure, in particular the management of the various data centres and servers that are owned or leased by the Group around the world; and - The Group's global office network. In FY 2023, electricity consumption and expenditure increased compared to FY 2022 mainly due to the expansion of the Group, resulting in a higher number of employees and offices around the world, and the growth of the business. The Group has made a commitment of becoming carbon negative and net zero for Scope 1 and Scope 2 emissions by 2030. This commitment will be supported by a number of activities, including looking for opportunities to improve the efficiency and performance of its servers and third-party data centres. The Group continues to investigate ways to measure its Scope 3 emissions and, when finalised, the Group will report on these Scope 3 emissions, including them in future disclosure and, potentially, incorporating them into the Group's emissions targets. The Group is also making strides in reducing its direct emissions by shifting from data centres to the cloud, and is actively working on strategies to reduce the impact this shift to the cloud has on its Scope 3 emissions. Plus500 will continue the dialogue with its key suppliers in relation to its Scope 3 emissions and as part of its vendor management process will stress the importance of working with vendors that are managing their environmental impact. The Group has adopted an Environmental Policy, which can be found on the Company's website. The following pages cover Plus500's governance of climate change, the integration with overall risk management, strategy in managing climate-related issues and opportunities, and the metrics to measure progress towards our targets, in recognition of the requirement for mandatory climate-related disclosures arising from the Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022, as well as FCA Listing Rule 9.8.6R(B). Below, we have set out our climate-related financial disclosures, consistent with the TCFD recommendations and recommended disclosures as detailed in the 'Recommendations of the Task Force on Climate-related Financial Disclosures', 2017, with use of additional guidance from 'Implementing the Recommendations of the Task Force on Climate-Related Financial Disclosures', 2021. The Group has a net zero target for Scope 1 and Scope 2 emissions by 2030 or earlier. In turn, the Group recognises the requirement to develop a transition plan inclusive of value chain emissions, consistent with the UK Government's net zero commitment by 2050, but the Group has yet to fully quantify its Scope 3 emissions. ## Governance ### Board level The Board has overall responsibility for climate change management, including oversight of climate-related risks and opportunities, as with all matters which impact the strategy, risk management, vision and direction of the Group. ESG matters, including climate change, are discussed more than once a year at Board meetings and the Board receives training on sustainability issues that have the potential to impact the businesses, whenever necessary. The Board is supported and informed on climate-related issues via the ESG Committee, which ensures that any potential impacts of climate change are incorporated into the review of Group strategy, business plans and risk management. The ESG Committee was established in 2020 and is chaired by Steve Baldwin, an Independent Non-Executive Director. The ESG Committee monitors progress against the Group's ESG approach and priority areas, and is responsible for externally reporting these elements. The ESG Committee meets at least twice a year, as outlined in the ESG Committee Terms of Reference, and provides updates to the Board at least annually. In FY 2023, the ESG Committee met three times. Progress against the Group's net zero targets and its climate-related risks and opportunities is monitored and overseen by the Board, based on information (progress and metrics as outlined below) received from the ESG Committee. Plus500 Ltd. 2023 Annual Report 37 --- Strategic Report | Governance | Financial Statements # REPORT ON THE TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (TCFD) CONTINUED Management level As a member of Plus500's ESG Committee, David Zruia, the Group CEO, is responsible for management-level climate change oversight. The ESG Committee receives input from executive management but is predominantly supported by the Company's internal ESG working group. The ESG working group was established in 2021 to assist the ESG Committee in monitoring and reviewing ESG risks and opportunities. The ESG working group comprises the Company Secretary and Head of Investor Relations, who work with a specialist ESG consultancy for external guidance. The ESG Committee receives reports on ESG risks, including climate-related risks, identified through the Group's Risk Management Framework and, with support from the ESG working group, determines the nature and potential impact of climate-related risks and opportunities facing the Group in achieving its purpose and strategic objectives. The ESG Committee subsequently advises the Board, when necessary, on current and future strategies regarding climate-related risks and opportunities. Risk management Plus500's climate-related risk management is integrated into the Group's overall Risk Management Framework. All climate-related risks are assessed in the same manner as other Group risks, so that their relative significance is comparable. The Group's Risk Register categorises all existing and emerging risks, including climate-related risks, with the register covering the likelihood of the risk occurring and the degree of the potential impact. Climate-related risks and opportunities relevant to the Group were identified with the help of external consultants, CEN-ESG, in collaboration with senior management. All risks are assessed on a 5x5 matrix incorporating an assessment of both impact and likelihood, which allows for the prioritisation of risks. Risk impact (materiality) is defined by the table on page 39. Risk likelihood is defined under five categories: Slight, Not Likely, Likely, Highly Likely and Expected. Risk mitigation factors for all risks, including climate-related, are included in the Risk Register and this combined view determines the approach for managing climate-related risks (e.g., mitigation, accept or control). ESG-related risks are reviewed annually to reflect new and developing areas in the operating environment which might impact business strategy and include the on-going refinement and quantification of risks over time. Internally, the cost of mitigation is described (where possible) along with an explanation of how this is derived. The Regulatory & Risk Committee meets at least three times a year, with all Board members receiving risk and compliance reports on a monthly basis. Strategy Time horizons for the climate-related risk assessment have been chosen on the basis that they encompass our emissions reduction targets and as climate change impacts tend to materialise in the longer term; short- (0 to 3 years), medium- (2026-2030), or long-term (2031-2040). Climate change has had observable effects on the environment and at Plus500 we realise climate change may present both risks and opportunities to the business. As an asset-light technological business, Plus500's overall climate risk exposure is limited. For example, our only potential physical risk exposure identified using a geo-spatial tool (flood risk in Haifa, Israel) is considered to be extremely limited and very unlikely in reality, and is mitigated by established home working procedures and insurance recovery in the event of natural disasters. Transition risks were analysed but deemed limited. The Group has used scenario analysis to improve understanding of how different climate outcomes may affect the behaviour of risks, and thereby improve the resilience of the business to climate change. Three climate-related scenarios have been selected, looking forward to our long-term time horizon of 2040: - Net Zero 2050 (NZE)¹ outlining a pathway for the global energy sector to achieve net zero CO₂ emissions by 2050, which limits the global temperature rise to 1.5°C by 2100, with 50% probability. This scenario is included as it informs decarbonisation pathways used by the Science-Based Targets initiative ("SBTi"). - Stated Policies (STEPS)¹ outlining a combination of physical and transitions risk impacts as temperatures rise by 2.5°C by 2100, with 50% probability. This scenario is included as it represents a midway path with the trajectory implied by today's policy settings. - RCP 8.5² where global temperatures rise between 4.1-4.8°C by 2100. This scenario is included for its extreme physical climate risks as the global response to mitigating climate change is limited. The Group has analysed and quantified how each climate-related risk and opportunity behaves under the three scenarios in line with definitions for risk impact outlined above. When taken in aggregate, the conclusion is that the Group's exposure, risk mitigation strategies, strategy, disclosure and net zero ambition provide financial resilience and strategic robustness to climate change with the Group's overall climate-related risk exposure being "Minor". A fundamental change to the business strategy or financial planning resulting from the impact of climate change is not likely to be required through to 2040 and there are no effects of climate-related matters reflected in judgements and estimates applied in the financial statements as a result. The Group will continue to develop this analysis as new data is made available both internally and externally and the Group will continue to monitor climate exposures and action plans through the Group's risk management framework. The opportunities identified continue to be developed in line with the Company's strategy and objectives. ¹ IEA (2023), "World Energy Outlook 2023", IEA, Paris. ² IPCC, 2014. "Climate Change 2014: Synthesis Report. Contribution of Working Groups I, II and III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change". Plus500 Ltd. 2023 Annual Report 38 --- Strategic Report | Governance | Financial Statements # Emissions table | ENERGY CONSUMPTION (KWh) | FY 2023 | | | FY 2022 | | | | --- | --- | --- | --- | --- | --- | --- | | | UK | GLOBAL (EXCL UK) | GROUP TOTAL | UK | GLOBAL (EXCL UK) | GROUP TOTAL | | Total Group energy consumption (kWh) | **25,639** | **732,195** | **757,834** | 40,354 | 687,320 | 727,674 | | GHG EMISSIONS (TCO_{2}E) | FY 2023 | | | FY 2022 | | | | --- | --- | --- | --- | --- | --- | --- | | | UK | GLOBAL (EXCL UK) | GROUP TOTAL | UK | GLOBAL (EXCL UK) | GROUP TOTAL | | Total Scope 1 (tCO_{2}e) | **0** | **0** | **0** | 0 | 0 | 0 | | Total Scope 2 (tCO_{2}e) | **5.3** | **331.0** | **336.3** | 7.8 | 292.1 | 299.9 | | Total Scope 1 & 2 (tCO_{2}e) | **5.3** | **331.0** | **336.3** | 7.8 | 292.1 | 299.9 | | Intensity measure (Group turnover $m) | | | **726.2** | | | 832.6 | | GHG Emissions Intensity Ratio (per Group turnover $m) | | | **0.46** | | | 0.36 | # Climate risk impact | IMPACT | MINOR | LOW | MEDIUM | HIGH | CRITICAL | | --- | --- | --- | --- | --- | --- | | Financial impact | X < $9m 1% from cash | $9m < X < $20m | $20m < X < $35m | $35m < X < $50m | 15% from EBITDA ($51m) or 10% from cash ($91m) | ![img-30.jpeg](img-30.jpeg) --- Strategic Report | Governance | Financial Statements ## REPORT ON THE TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (TCFD) ### Risks Two key climate-related risks have been identified: #### 1. Risk to Plus500 not meeting its Scope 1 and 2 Net Zero and Carbon Negative Targets Plus500 has clear targets associated with climate change and a continual obligation to report to external stakeholders to provide evidence of the Group's on-going commitment to this area. However, some aspects of the delivery against this plan are reliant on third parties. At present the only source of operational emissions for the Group are within Scope 2 (electricity purchased), where the ability to decarbonise electricity supply may be hindered by the pace of renewable energy adoption by the Group offices' landlords. The location of some sites may have more limited options for renewable energy. Failure to meet the defined net zero targets may cause reputational damage, dissuade potential investors, or result in greater costs due to the introduction of carbon pricing. Assuming the successful completion of the Group's near-term target of reducing Scope 1 and 2 emissions to net zero by 2030, the risk presented by potential carbon prices on our residual emissions under all time periods and all scenarios is "Minor". The Group typically operates with short-term leases, making it feasible to move operations in areas where it is difficult to find renewable energy contracts with landlords. | SCENARIO | PLUS500 SCOPE 2 RESIDUAL EMISSIONS (TCO_{2}E) | | | | --- | --- | --- | --- | | | 2023 | 2030 | 2040 | | **STEPS** | | | | | No internal action (grid decarbonisation only) | 336.3 | 237.9 | 147.8 | | Net Zero by 2030 | 336.3 | 0 | 0 | | **NZE** | | | | | No internal action (grid decarbonisation only) | 336.3 | 156.1 | 5.1 | | Net Zero by 2030 | 336.3 | 0 | 0 | #### 2. Carbon pricing in the value chain The cost of carbon and the number of countries adopting carbon price mechanisms is expected to rise as businesses are made more accountable for their energy use and carbon emissions. If Plus500's suppliers come under carbon pricing mechanisms this could result in suppliers passing on the added cost from the carbon tax. The following table shows the International Energy Agency's (IEA) forecasts for carbon pricing under NZE and STEPS scenarios. While quantification is reliant on a full Scope 3 footprint analysis, Plus500's current assessment of this risk is "Minor". | Scenario – STEPS | CARBON PRICE ESTIMATES (US$/T) | | | --- | --- | --- | | | 2030 | 2040 | | EU* | 120 | 129 | | **Scenario – NZE** | **2030** | **2040** | | EU* | 140 | 205 | \* Used as Global estimate. #### Identified key climate-related risks | RISK | 1. RISK TO PLUS500 NOT MEETING SCOPE 1 AND 2 NET ZERO AND CARBON NEGATIVE TARGETS | 2. CARBON PRICING IN THE VALUE CHAIN | | --- | --- | --- | | **Type** | Transition (market and reputation) | Transition (current and emerging regulation) | | **Area** | Own operations | Upstream | | **Primary potential financial impact** | Potential impact on revenue and/or cost of capital | Higher costs associated with energy and other inputs | | **Time horizon** | Medium/Long-term | Medium term | | **Likelihood** | Not likely | Highly likely | | **Impact** | Minor | Minor | | **Location or service most impacted** | Group | Purchased goods and services | Plus500 Ltd. 2023 Annual Report | 40 --- Strategic Report | Governance | Financial Statements ## Opportunities Two key climate-related opportunities have been identified: | OPPORTUNITY | 1. ENERGY SAVINGS | 2. RENEWABLE ENERGY | | --- | --- | --- | | **Type** | Resource efficiency | Energy source | | **Primary potential financial impact** | Decreased costs | Decreased costs | | **Time horizon** | Medium term | Medium term | | **Likelihood** | Highly likely | Expected | | **Impact** | Minor | Minor | | **Location** | Group | Group | | **KPI** | Total Group energy consumption (kWh) | Proportion of global electricity from renewable sources (%) | ### 1. Energy savings Decreasing energy consumption and increased energy efficiency may decrease outgoing costs, contribute to our net zero target and mitigate against any future carbon pricing. This will have the emergent benefit of further mitigating the impact of Risk 1 outlined on page 40. As the Group's offices are leased, the strategy to realise this opportunity will partly involve engagement with landlords to introduce energy saving measures. Implementing best practice in energy management in current offices will also be a factor in reducing consumption. In March 2024, the Group's HQ office in Haifa moved to a new office location in a sustainable and innovative building. The new building is LEED certified. LEED (Leadership in Energy and Environmental Design) is the world's most widely used green building rating system. LEED certification provides a framework for healthy, highly efficient, and cost-saving green buildings, which offer environmental, social and governance benefits. LEED certification is a globally recognised symbol of sustainability achievement. Moving to the new office premises demonstrates Plus500's continued efforts to drive energy efficiency and environmental design. ### 2. Renewable energy Transitioning to renewable energy sources (self-generation, power purchase agreements or Renewable Energy Certificates (RECs)) can help in reducing market-based Scope 2 emissions to zero. As office locations are not owned, the most likely routes for the Group are to negotiate with landlords for the supply of renewable energy or to utilise RECs. Given the typically short-term nature of the Group's leases and energy requirements of a services-based business, investment in self-generation would likely be unfeasible. ### Metrics and targets Plus500 has a clear target to be net zero for Scope 1 and Scope 2 emissions by 2030 or earlier, which is ahead of the UK government's commitment to net zero by 2050 and which brings plans for our operating emissions within the science-based pathway of limiting global warming to 1.5°C. The Group reports its Scope 1 and Scope 2 greenhouse gas emissions, calculated in line with the Greenhouse Gas Protocol and discloses total energy consumption. In line with the risk and opportunities identified, the Group has also initiated an internal reporting process to understand the proportion of global electricity from renewable sources. While acknowledging the TCFD recommendations to integrate an internal carbon price into Group processes, the risk assessment process has highlighted that at this point, climate-related risks are financially immaterial to Plus500 and therefore deemed unnecessary to implement. However, it may be used in assessing any future large capital expenditure and investment activities. Additional metrics that monitor the climate-related risks and opportunities, such as upstream and downstream Scope 3 emissions, are being considered for future reporting. ![img-31.jpeg](img-31.jpeg) --- Strategic Report | Governance | Financial Statements # GROUP CHIEF FINANCIAL OFFICER REVIEW # PLUS500 CONTINUES TO GENERATE GROWTH & ATTRACTIVE RETURNS ![img-32.jpeg](img-32.jpeg) “Plus500 delivered further strategic and operational progress during FY 2023. This was enabled by our technological expertise, robust financial position and consistent execution against our strategic roadmap in existing and new markets, both organically and inorganically.” **Elad Even-Chen** Group Chief Financial Officer **$726.2M** Revenue (FY 2022: $832.6m) **$340.5M** EBITDA (FY 2022: $453.8m) **47%** EBITDA margin (FY 2022: 55%) **99%** Operating cash conversion (FY 2022: 112%) FY 2023 was another strong year for Plus500 and I am pleased with the progress we made across our strategic objectives. Plus500 has established a strong track record of consistently delivering strategic progress and value for its shareholders. This track record of consistent delivery, and a robust financial position, provided the foundation for another year of strategic, operational and financial progress. Plus500 has a lean and flexible cost base which is predominantly weighted to variable costs. In addition, since inception, Plus500 has held no debt or loans on its balance sheet. This financially responsible culture enables Plus500 to focus on strategic investments, maintaining its strong financial profile and, ultimately, generating attractive returns for its shareholders. ## Business development In FY 2023, Plus500 continued to make good progress with the development of its activities in new markets, such as the high-growth market of the UAE. In recent years, the Group has entered the US and the Japanese markets via bolt-on acquisitions and Plus500 continues to see significant opportunities for growth in these markets. In the US futures market, the Group secured additional clearing and industry memberships for its B2B (Institutional) business. These included a clearing membership of Eurex Clearing AG (obtained in January 2024), the clearing house for the entire suite of products traded at Eurex Exchange, the leading European derivatives exchange. It also secured a primary membership of the Futures Industry Association (FIA), the leading global trade organisation for futures, options and centrally cleared derivatives. The Group has already secured full clearing memberships with the CME Group Exchanges, as well as the Minneapolis Grain Exchange (MGEX). Plus500 Ltd. 2023 Annual Report | 42 --- Strategic Report | Governance | Financial Statements In February 2023, the Group obtained a regulatory licence in the high-growth market of the UAE. This is a key strategic market for Plus500 and we look forward to welcoming more customers to our platform in the UAE over time. In addition, the Group obtained a regulatory licence from the Securities Commission of the Bahamas (SCB) in July 2023. These new additions take the Group's total number of regulatory licences to 13. The Group's portfolio of regulatory licences continues to serve as a real competitive advantage and is a source of inherent value for Plus500, both in a monetary and operational sense. During FY 2023, the Group continued to invest in expanding its existing operations and deepening its customer retention efforts. Plus500 rolled out AI and big-data models to develop new retention technologies supported by enhanced customer engagement methodologies. As a result, customer retention has improved in recent years, highlighting the increasing loyalty of its customers and their confidence in the Plus500 trading platforms. ## Revenue, EBITDA, net profit and earnings per share Revenue in FY 2023 was $726.2m (FY 2022: $832.6m), comprising trading income of $674.3m and interest income of $51.9m. EBITDA for FY 2023 was $340.5m (FY 2022: $453.8m) with an EBITDA margin of 47% (FY 2022: 55%). This robust performance in FY 2023 was achieved despite lower levels of trading activity seen across the global financial markets during the year. Net profit in FY 2023 was $271.4m (FY 2022: $370.4m) and basic earnings per share was $3.17 (FY 2022: $3.81). ## Cost base The Group's cost base continues to be positively weighted towards variable costs during FY 2023. This enables the Group to retain flexibility, while investing in its long-term technological capabilities, and to protect its margins. For FY 2023, 70% of the Group's costs were variable (FY 2022: 70%). Total SG&A expenses were $389.8m during FY 2023 (FY 2022: $382.2m). The main elements were marketing technological investments of $135.4m (FY 2022: $157.8m), payment processing costs of $40.0m (FY 2022: $44.9m), employee benefits and other related expenses of $94.3m (FY 2022: $80.9m) and commissions and fees of $31.2m (FY 2022: $17.0m). Plus500 remains well positioned to deliver attractive and sustainable shareholder returns, enabled by its market-leading proprietary technology, financial strength and strategic growth plan. ## Investing to attract and retain higher value customers Plus500 continued to invest in strategic markets and products to attract higher value customers during FY 2023. As a result, AUAC was $1,489 in FY 2023 (FY 2022: $1,481). The Group continues to expect that AUAC will rise steadily over time, as the customer profile evolves towards higher value, long-term customers and as it attracts customers to new trading products and in new geographies. Plus500's technological marketing capabilities are the ones to enable the Group to lead the online mobile space and to provide long-term returns on investments. Reflecting this focus on customer values and retention efforts, customer longevity has increased significantly in recent years. In FY 2023, 88% of OTC revenue was derived from customers trading with Plus500 for more than a year, 59% for more than three years and 29% for more than five years. For context, in FY 2018, just 8% of OTC revenue was derived from customers who had been trading with Plus500 for more than five years, which illustrates the significant progress the Group has made in improving customer relationships. ## Net financial expenses (income) Net financial expenses (income) were $0.2m in FY 2023 (FY 2022: ($23.9m)), driven by FX gains and losses as the Group manages its exposure to a range of operating currencies versus the US dollar. A substantial portion of the Group's cash is held in US dollars in order to reduce the impact of currency movements on financial expenses over time. ## Corporate tax The Company's status as a Preferred Technological Enterprise ("PTE"), as accredited by the Israeli Tax Authority ("ITA") under the tax regime in Israel, was extended for the financial years 2022, 2023, 2024, 2025 and 2026, subject to the Company complying with the conditions of the Law for the Encouragement of Capital Investments, 5719-1959 ("Investment Law"). Consequently, the Company's corporate tax rate for each of these years will be reduced from 23% to 12% and the withholding tax rate applicable for dividends will be reduced from 25% to 20%. For further information, see notes 3 and 10 to the Consolidated Financial Statements. ## Balance sheet and cash generation As of 31 December 2023, total assets on the Group's balance sheet were $1,004.7m (FY 2022: $1,010.0m), with equity of $699.8m, representing approximately 70% of the balance sheet. The Group has remained debt-free since inception, and had a cash and cash equivalents balance at the end of FY 2023 of $906.7m (FY 2022: $930.2m). This robust financial position is supported on an on-going basis by the Group's technology-enabled business model and lean cost base which allows the Group to invest in its people and its capabilities with a focus on medium to long-term returns. Plus500 Ltd. 2023 Annual Report 43 --- Strategic Report | Governance | Financial Statements # GROUP CHIEF FINANCIAL OFFICER REVIEW CONTINUED ## Shareholder returns Since its IPO in 2013, Plus500 has returned approximately $2.1 billion to shareholders, including those announced in February 2024, through dividends and share buybacks. The Company's shareholder returns policy is to return at least 50% of net profits to shareholders through share buyback programmes and dividends on a half-yearly basis, with at least 50% of this distribution being made by way of share buybacks. The Board will also consider executing special share buybacks, or other distributions, on a half-yearly basis, dependent on fiscal year results as well as on investment and growth opportunities. This shareholder returns policy applies to net profits on a half-yearly basis and is based on a 23% corporate tax rate, for both interim and final distributions. The Company returned $365.1m to shareholders during FY 2023, comprising $275.3m in share buybacks and $89.8m in dividends. Plus500 announced additional shareholder returns of $175.0m in February 2024, comprising share buyback programmes of $100.0m and total dividends of $75.0m. Within the $100.0m share buyback programme, there is a final buyback programme of $31.0m and a special buyback programme of $69.0m. These programmes commenced following the completion of the previous share buyback programme of $60.0m, which was announced on 14 August 2023. Within the $75.0m of additional dividends there is a final dividend of $31.0m, representing $0.3911 per share, and a special dividend of $44.0m, representing $0.5551 per share, equating to a total dividend per share of $0.9462. The final and special dividends had an ex-dividend date of 29 February 2024, with a record date of 1 March 2024, and a payment date of 11 July 2024. These new shareholder returns further emphasise the Board's continued confidence in the prospects for Plus500 and reflect the robust financial position of the Group. Total dividends paid during 2023 amounted to $89.8m, representing $1.0578 per share. ## Presentation of currencies The Consolidated Financial Statements are presented in US dollars, which is the Group's functional and presentation currency. Foreign currency transactions and balances in currencies different from the US dollar are translated into the US dollar using the exchange rates prevailing on the dates of the transactions or at the balance sheet date. ## Group Tax Policy The Group actively seeks to comply with both the spirit and the letter of all relevant taxation laws and regulations where it operates, and it is committed to a transparent and open approach to reporting on tax. The Group's policy is to file all tax returns on time, and to pay tax as it falls due. The Group has a low risk tolerance for uncertain tax positions in the jurisdictions in which it operates and does not undertake any aggressive or unreasonable tax planning schemes for the purpose of tax avoidance, and broadly aims to align tax payments to revenue generation. The Group does not knowingly help others avoid their tax obligations. During FY 2020, Plus500 Ltd. became one of the first companies to receive approval from both the ITA and the Israeli Innovation Authority ("IIA") under the new tax regime in Israel, recognising the Company as a PTE and as "an enterprise which promotes innovation". At the beginning of July 2020, Plus500 Ltd. received an approval from the IIA that, together with the tax ruling received from the ITA in May 2019, recognises Plus500 Ltd. as a PTE. In January 2022, the Company's status as a PTE, as accredited by the ITA under the tax regime in Israel, was extended for the financial years 2022, 2023, 2024, 2025 and 2026. Consequently, the Company's corporate tax rate for each of these years will be reduced from 23% to 12% and the withholding tax rate applicable for dividends will be reduced from 25% to 20% subject to the Company complying with the conditions of the Investment Law. Also see note 3 and note 10 to the Consolidated Financial Statements. All intra-Group transactions are required to be priced on an arm's-length basis in accordance with the Group's internal transfer pricing policies which reflect internationally accepted transfer pricing standards and local tax laws, which are also approved by leading international accounting firms. Taxation is a regular agenda item for the Audit Committee, which meets at least four times a year, and reports to the Board. Tax compliance risks are managed through the Group's Governance Framework, overseen by its Audit Committee, and supported by the Group Chief Financial Officer. The Board remains committed to providing shareholders with attractive and sustainable returns over the medium- and long-term through a combination of dividends and share buybacks, as appropriate. Elad Even-Chen Group Chief Financial Officer 29 March 2024 Plus500 Ltd. 2023 Annual Report | 44 --- Strategic Report | Governance | Financial Statements # RISK MANAGEMENT FRAMEWORK # A RIGOROUS RISK FRAMEWORK ## Assessing and managing our risks The Group maintains a robust, customer-centric approach to the management and control of risks, which is fully embedded within the Group's technology and its day-to-day operating procedures. Furthermore, the Group has a comprehensive risk mitigation plan, which helps to control exposures and provide robust solutions. This plan includes a range of measures, such as corporate policies, operating rules, systematic reporting, external audits, internal audits, self-assessment and continuous monitoring by the Regulatory & Risk Committee, the Board and the executive management. ## Risk Management Framework The financial, market and regulatory environments in which Plus500 operates inherently expose it to a number of strategic, financial, operational, regulatory and ESG-related risks. The Group recognises the importance of understanding and managing these risks and has determined levels of risk that it believes are efficient. Policies and procedures have been developed within a robust risk management framework that attempts to minimise various risks, including market risk. The Group aims to ensure its risk exposures are aligned with its risk appetite across its product portfolio. This is supported by real-time monitoring technology which is embedded in the Group's trading platforms. The Group continues to test a more holistic, automated hedging capability and will provide information on this approach, if and when it is implemented. This overall approach aligns the Group's interests with its customers, with a particular focus on customer care and protection and customer experience, helping to deliver a more stable revenue stream over time, given the consequently lower level of top-line volatility. The Group continues to expect that revenue contribution from Customer Trading Performance will be broadly neutral over time. Plus500 monitors trading levels and exposure limits (for example by customer, instrument and asset class), and credit risk is limited by having all OTC customers' accounts pre-funded. The Group also offers negative balance protection and a margin close-out policy to all of its OTC customers on a global basis. ## Governance ### The role of the Board The Board is ultimately responsible for the risk strategy, having developed a Risk Management Framework, which is regularly reviewed and assessed by the Board, particularly with regards to principal and emerging risks. The Board believes that the robust, technology-driven risk management systems of the Group are a key competitive strength and an important factor in its revenue generation. The implementation of the risk strategy is delegated to management under the more detailed supervision of the Regulatory & Risk Committee. ### The role of the Regulatory & Risk Committee The Regulatory & Risk Committee receives updates from management on risk, compliance and regulatory issues and reviews the related internal systems. This Committee also receives monthly reporting packages relating to risk and compliance. The Regulatory & Risk Committee is responsible for reviewing relationships with the regulatory authorities and reviewing the adequacy and quality of the Group's systems and procedures for compliance with relevant regulatory requirements where the Group is regulated and in other jurisdictions where the Group has a significant market presence. The Regulatory & Risk Committee also has responsibility for reviewing the Group's most significant risks to the achievement of strategic objectives and reviewing the Group's risk management policy. Plus500 Ltd. 2023 Annual Report | 45 --- Strategic Report | Governance | Financial Statements # RISK MANAGEMENT FRAMEWORK CONTINUED # Lines of defence Within the Risk Governance Framework, three lines of defence are created through: - Front-line risk management processes; - Regulatory compliance; and - Independent assurance provided by internal audit. # First line of defence The first line of defence consists of front-line risk management processes operated within the day-to-day trading activities of the Group's business. There are three elements to the management of day-to-day OTC trading risk: # a. Financial Risk Limitation Policies The Group has developed proprietary risk management systems that incorporate various real-time financial risk limits. # b. Trading Limits # i. Customer limits Monetary limits are placed on a customer's: - (a) Exposure to any single instrument; - (b) Aggregate open positions as a whole; and - (c) Aggregate deposit amounts. Customer limits are determined with reference to, among other things, a customer's credit score, trading history, location and other due diligence results. # ii. Group limits Monetary limits are also placed on the Group's exposure to individual instruments. These limits are set according to, among other things, the asset class, the size, the liquidity and the beta (volatility) of the underlying instrument. In each case, when these limits are reached on our trading platforms, it automatically ceases to accept new trades from the relevant individual or on the underlying instrument until exposure levels fall below the relevant threshold(s) or threshold(s) are reviewed and amended. # c. Hedging To further manage risk, the Group has a hedging approach in place, including targeted hedging in certain circumstances. This approach would, in extremis, mitigate exposure of the Group as a whole beyond certain thresholds. # Second line of defence A strong compliance function is in place in all of the Group's regulated subsidiaries. The Board continues to develop the Group's compliance policies in line with each of the regulatory environments in which the Group's product offerings are available. # Third line of defence The third line of defence, independent assurance, is provided by internal audit. The role of the internal auditor is to examine, among other things, the Company's compliance with relevant law and orderly business procedures. In accordance with the Israeli Companies Law 5759-1999 (the "Companies Law"), the internal auditor is appointed by the Board on the recommendation of the Audit Committee, which also oversees the internal auditor's work plan, monitors its activities and assesses its performance. Pursuant to the Companies Law, the internal auditor may not be: (1) a person who holds more than 5% of the Company's outstanding shares or voting rights; (2) a person who has the power to appoint a Director or the Chief Executive Officer of the Company; (3) an officer or Director of the Company; or (4) a member of the Company's independent accounting firm, or anyone acting on its behalf. In 2022, the Board appointed Kost Forer Gabbay & Kasierer (EY Israel), a member firm of Ernst & Young, as the Company's internal auditor. Compliance with relevant regulations is also provided by local advisors in the main territories that the Group operates in, and advice on the regulatory regime is considered when planning new licence applications or sourcing acquisitions. Plus500 Ltd. 2023 Annual Report | 46 --- Strategic Report | Governance | Financial Statements ## Internal controls The Board has overall responsibility for the Group's systems of internal control and for monitoring their effectiveness. Although no system of internal control can provide absolute assurance against material misstatement or loss, the Group's systems are designed to provide the Board with reasonable assurance that issues are identified on a timely basis and dealt with appropriately. The Group's key internal financial control procedures include: - A review by the Board of actual results compared with budget and forecasts; - Reviews by the Board of year-end forecasts; - The establishment of procedures for acquisitions, capital expenditure and expenditure incurred in the ordinary course of business; - The appraisal and approval of proposed acquisitions outside of the ordinary course of business by the Board; - The detailed budgeting and monitoring of costs incurred in the development of new products; - A review of day-to-day management controls and test of operating effectiveness of key controls; - An annual review of the internal controls system; - A regular review of risk limits, with a view to conducting targeted hedging to reduce market risk, as and when appropriate; - The reporting to, and review by, the Board on changes in legislation, regulatory requirements and practices within the sector, as well as accounting, regulatory and legal developments pertinent to the Group; and - The appointment of experienced and suitably qualified staff to take responsibility for key business functions to ensure maintenance of high standards of performance. ## Risk assessment and review The Board confirms that it has completed a robust assessment of the Company's principal and emerging risks. The Board continues to assess emerging risks but has not identified any emerging risks that were not already captured as principal risks through the Group's comprehensive risk assessment process, carried out in FY 2023, in accordance with Provision 28 of the Code. Principal risks are considered those that would threaten its business model, future performance, solvency or liquidity. These are outlined below and further details of financial risks and their management are set out in note 26 to the Consolidated Financial Statements. The comprehensive risk assessment process identified certain risks which were narrowed down into major risks monitored by the executive management and the Regulatory & Risk Committee, then further consolidated into ten principal risks closely monitored by the Board. Throughout FY 2023 and up to the date of this Annual Report, the Board has reviewed the effectiveness of the Group's internal controls system. As a result of this review, the Board considers that the measures that have been, or are planned to be, implemented, complement the Group's risk management framework and are appropriate to the Group's circumstances. The measures cover all controls, including financial and operational controls and compliance with relevant laws and regulations. ![img-33.jpeg](img-33.jpeg) --- Strategic Report | Governance | Financial Statements # RISK MANAGEMENT FRAMEWORK CONTINUED | RISK | DESCRIPTION | MANAGEMENT AND MITIGATION | | --- | --- | --- | | **BUSINESS AND STRATEGIC RISKS** | | | | **Legal and jurisdictional risk** | The risk that changes in the legal and regulatory frameworks in which the Group currently operates could adversely affect its performance | - Diversification of jurisdictions in which the Group's product offerings are available - On-going monitoring of legal and regulatory developments and taking necessary actions to remain compliant with any changes to legal or regulatory frameworks | | **Regulatory risk** | Regulatory changes could result in one or more of the Group's product offerings becoming less profitable, restrictions on the products' marketing, or a ban on the product offerings in one or more of the jurisdictions in which the Group operates | - On-going monitoring of market and regulatory sentiment, developments and advice from compliance functions on actual and possible future changes and taking remedial action - Maintaining an open and robust dialogue with regulators - Continuing to make efforts and investment to diversify the Group's product portfolio and broaden its geographic footprint | | **Customer care and protection risk** | The risk that a lack of customer care and protection could negatively impact customer welfare, particularly in relation to compliance with relevant regulations on these issues | - Continued efforts to educate and inform customers of the inherent potential risks involved in trading, through required risk disclosures, educational features and by offering an unlimited and free demo account for OTC and 'Plus500 Futures' customers - Negative balance protection has been an on-going feature of the Plus500 OTC platform since inception. This guarantees that maximum losses of all customers are limited to the amount within their account - Other risk management features, including margin close-out policy, are also embedded within Plus500's technology - Trading Academy and '+Insights' to provide customers with valuable information - Assessment of potential customers prior to and during the completion of the onboarding process | | **FINANCIAL RISKS** | | | | **Business risk** | The risk of a commercially adverse impact on the business resulting from: - The Group's strategic decision-making failing to seize business opportunities or react to changes in the market. This risk may result in damage or loss, financial or otherwise, to the Group as a whole - The risk that a third-party organisation on which the Group relies significantly will inadequately provide or fail to deliver its outsourced activities or contractual obligations to the standard required | - Robust governance, challenge and oversight - Managing the Group in line with the agreed strategy, policies and risk appetite and periodic reviews of such assumptions compared to developments in the markets, business and regulation - Developing redundancies for material services provided by third parties by having secondary providers and alert systems, as well as automated processes to operate redundancies - Due diligence performed on service providers - Service level agreements in place and regular monitoring of performance - Input from best-in-class advisors involved in decision-making processes of strategic developments and initiatives | Plus500 Ltd. 2023 Annual Report | 48 --- Strategic Report | Governance | Financial Statements | RISK | DESCRIPTION | MANAGEMENT AND MITIGATION | | --- | --- | --- | | **FINANCIAL RISKS CONTINUED** | | | | **Market risk** | The risk of exposure to the market Market risk is mainly comprised of the following factors: + Price movements + Foreign currency exposures | + The Group manages market risk by balancing natural hedging and the Group's risk tolerance. Market risk is mitigated by: - The Group's proprietary technology platforms which enable real-time position monitoring and alerts to help the Group constantly manage market exposure and adjust its controls - Defining daily/weekly/monthly Group market risk limits for each financial market or instrument - If predetermined limits are exceeded, the Group takes appropriate actions to reduce exposure - Targeted hedging is conducted on a limited basis, as appropriate | | **Credit risk** | The risk of clients or counterparties failing to fulfil contractual obligations and/or settlements resulting in financial loss, specifically: **Client credit risk:** Leveraged trading in the OTC business can result in client trading losses exceeding available funds in their account (mainly due to sharp market movements); such losses are absorbed by the Group (negative balance protection has always been offered to all the Group's OTC customers, in all markets and across all underlying assets) **Institutional credit risk:** The risk that financial counterparties will not meet their obligations, risking both client and Group assets | **Client credit risk:** For retail customers, the Group has a 'no credit' policy in which OTC customers can only fund their accounts from their own resources, with all accounts being pre-funded. OTC customers can set a wide range of loss risk mitigation tools such as alerts and stops features **Institutional credit risk:** The Group engages only with prominent, high-ranked and well-established financial institutions for the holding of its own assets and in order to meet its regulatory obligations to safeguard client money in segregated accounts. The Group periodically reviews its engagements with such financial institutions to make sure they continue to operate within the applicable standards and also diversify the Group's assets across those financial institutions to reduce risk | | **Liquidity risk** | The risk that there is insufficient available liquidity to meet the financial liabilities of the Group | The Group utilises liquidity forecasts to identify potential risks. These forecasts incorporate the impact of all applicable liquidity regulations in force in each jurisdiction and other hindrances to the free movement of liquidity around the Group. Key issues affecting the Group's liquidity are discussed by the Board | Plus500 Ltd. 2023 Annual Report | 49 --- Strategic Report | Governance | Financial Statements # RISK MANAGEMENT FRAMEWORK CONTINUED | RISK | DESCRIPTION | MANAGEMENT AND MITIGATION | | --- | --- | --- | | **OPERATIONAL RISKS** | | | | **Operational risk** | The risk of enduring losses resulting from inadequate or failed internal processes due to people, failed technology deployment, adoption and innovation, external events (such as natural disasters, major utilities or infrastructure failure, etc.), or the inability to attract and maintain competent staff which the Group requires for operational purposes | - Business and regulatory sign-off of processes and procedures to ensure business efficiency and regulatory compliance - Invest in system development to improve process automation - Monitoring, quality checks and robust analysis of performance to identify errors, inefficiencies, underlying causes and mitigation plans - Centralised operations – to enable rapid implementation of business innovation, adjustments to business and regulatory changes, monitoring and maintaining high standards and cost-efficient structure - Centralised technical operations, to ensure Group-wide monitoring, issue handling and analysis - Unified IT strategy focused on performance and growth - Continuous development efforts towards operational risk framework to ensure risk recognition and timely control - Recruitment of highly competent employees and development of employee retention programmes, with enhanced staff training and oversight - The Group has a clear business continuity plan, ensuring quick recovery and cover for both IT and operational aspects (connectivity, Distributed DoS Attacks, unresponsiveness of server, etc., as well as external events) and each one has an emergency plan and contacts in place | Plus500 Ltd. 2023 Annual Report | 50 --- Strategic Report | Governance | Financial Statements | RISK | DESCRIPTION | MANAGEMENT AND MITIGATION | | --- | --- | --- | | **OPERATIONAL RISKS CONTINUED** | | | | **Information and data security risk** | The risk of loss of technology services caused by network disruption and loss of systems, data and failure to restore services of a third party in a timely manner resulting in the Group's inability to offer its services The risk of loss or misuse of individuals' personal information provided to the Group | - Operate multi-layered delivery, security and mitigation solutions - Continuous investment in increased functionality, scalability, capacity and responsiveness of systems to monitor, react and prevent cyber attacks - Continuous real-time monitoring of incoming and outgoing network activity - Constant monitoring of systems performance and controls - Selective software design methodologies and testing regimes - A robust Group IT policy that sets out strategic, stability, security and performance standards as well as backup processes to enable service availability in the event of failures - Privacy as culture – creating awareness among employees of privacy-related matters including proper use of personal information, protection of such information and loss prevention - Dedicated cyber security training for all global employees and the Board - Robust privacy-oriented compliance programme to ensure compliance with relevant data privacy regulations | | **Climate-related risk** | Complete or partial prevention of maintaining the Group's on-going operations and the provisions of services to its customers (e.g., due to office premises unavailability, systems connectivity downtime, data centre disaster, etc.) as a result of a natural disaster (e.g., earthquake, flood), fire or any other external factors | - Plus500 has a Disaster Recovery site supported by a database which is updated in real time - The Group's headquarters are equipped with an emergency generator that would be automatically activated in the event of a power outage and has facility uninterruptable power supply units that would be automatically activated if the emergency generator fails - 'Work From Home' mode – all employees are assigned with equipment and connectivity, so that there will not be any interruptions to working activity in the event of office unavailability | Plus500 Ltd. 2023 Annual Report | 51 --- Strategic Report | Governance | Financial Statements GOING CONCERN AND VIABILITY STATEMENT # GOING CONCERN AND VIABILITY STATEMENT ## Going Concern Having given due consideration to the nature of the Group's business, the Group's budget, liquidity resources and cash flow forecasts for the period of three years ending 31 December 2026, taking into account the Group's anticipated investment commitments and working capital requirements, the Board considers that the Company and the Group as a whole are a going concern and the Consolidated Financial Statements are prepared on that basis. This treatment reflects the reasonable expectation that the Group has adequate resources to continue in business for over a period of at least 12 months from the date of approval of the Consolidated Financial Statements and the consideration of the various risks set out on pages 48 to 51 and the financial risks described in note 26 to the Consolidated Financial Statements. ## Viability Statement In accordance with Provision 31 of the Code, the Board has considered the Group's current financial position and future prospects, its strategy, risk appetite and the potential impact of the principal risks and how these are managed. It has a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the three-year assessment ending 31 December 2026. The Directors confirm that they have performed a robust assessment of the principal and emerging risks facing the Group as detailed on pages 48 to 51, including those that will threaten its business model, future performance and liquidity. In reaching this conclusion, both the prospects and viability considerations have been assessed: ## Prospects - The Group's current financial position is outlined in the Strategic Report. - The Group's business model: despite regulatory changes in a number of jurisdictions, the core of the current strategy remains in place and continues to demonstrate sufficient cash generation to support operations. In addition, we believe the Group will continue to be viable beyond the three years as mentioned above, in accordance with our business model. - Assessment of prospects and assumptions: conservative expectations of future business prospects through delivery of the Group strategy as presented to the Board through the budget approval process. The annual budget approval process consists of a detailed bottom-up process with a 12-month outlook which involves input from all relevant functional and regional heads. The process includes a collection of resource assumptions required to deliver the Group strategy and associated revenue impacts with consideration of key risks. This is used in conjunction with external assumptions such as: a region-by-region review of the regulatory environment and incorporation of any anticipated regulatory changes as outlined in the Strategic Report, to revenue modelling, market volatility, interest rates and industry growth which materially impact the business. The budget is used to set targets across the Group. The budgeting process also covers liquidity and capital planning and, in addition to the granular budget, a three-year outlook is prepared using assumptions on industry growth, the effects of regulatory changes, revenue growth from strategic initiatives and cost growth required to support initiatives. The budget was reviewed by the Board in October 2023 and in December 2023 and received final approval in December 2023. - On-going review and monitoring of risks: these are outlined in the Group's Risk Management Framework on pages 48 to 51 of this Annual Report and are monitored monthly by management, with review and challenge from the Regulatory & Risk Committee. Based on the various scenarios tested, the Company has sufficient liquidity and headroom to operate its business. ## Viability Scenario stress testing of available liquidity and capital adequacy are central to understanding the Group's viability. This testing replicates adverse market conditions and regulatory change, and is therefore considered in the Group's Individual Capital Adequacy Assessment Process and Individual Liquidity Adequacy Assessment documents, which are shared with our regulators on request. The results of the scenario stress testing showed that, due to the robust nature of the business, the Group would be able to withstand these scenarios, both in isolation and combined scenarios, over the financial planning period by taking management actions that have been identified. The Board has considered that three years is an appropriate period over which to provide a viability statement, as this is the longest period over which the Board reviews the success of strategic opportunities. This timeline is also aligned with the period over which internal stress testing occurs. The Board has no reason to believe that the Group will not be viable over a longer period, but given the uncertainty involved, in particular of regulatory changes, the Board believes this period presents the readers of the Annual Report with a reasonable degree of confidence. The Group also monitors performance against predefined budget expectations and risk indicators, along with strategic progress updates, allowing management action to be taken where required, including the assessment of new opportunities. Plus500 Ltd. 2023 Annual Report | 52 --- Strategic Report | Governance | Financial Statements GOVERNANCE ## Contents Governance at a Glance 54 Chair's Introduction to Governance 56 UK Corporate Governance Code 57 Compliance Statement Board of Directors 58 Governance Report 62 Shareholder Engagement 68 Report of the Nomination Committee 69 Report of the Audit Committee 74 Report of the Regulatory & Risk Committee 81 Report of the ESG Committee 84 Report of the Remuneration Committee 87 Directors' Remuneration Report 93 Directors' Report 103 Corporate Law 105 Directors' Responsibility Statement 107 Plus500 Ltd. 2023 Annual Report 53 --- Strategic Report | Governance | Financial Statements GOVERNANCE AT A GLANCE # GOVERNANCE HIGHLIGHTS ## GOVERNANCE IN NUMBERS As at the date of this Annual Report **7** Board members **43%** Female representation on the Board **6** Board Committees: Audit, Remuneration, ESG, Regulatory & Risk, Nomination and Disclosure Corporate governance remained a major area of focus for Plus500 in FY 2023. Over the last three years, Plus500 has continued to strengthen its governance framework and Board diversification. These efforts further ensure Plus500 has a solid governance foundation from which to deliver its strategic roadmap and drive further value for our shareholders in the future. ### Key activities of the Board in 2023 - Strategic discussions relating to further developing the Group's position as a global multi-asset fintech group and expand its product offering and geographic footprint, including in the US futures market, the Japanese market, as well as in the high-growth UAE market. - Review, discuss and approve trading updates, results announcements and notice of general meetings. - Review monthly updates, including CEO and CFO reports, financial performance and business development updates, as well as risk and regulatory compliance reports. - Conduct internal effectiveness evaluation of the Board and its Audit Committee, following an independent third-party evaluation in 2022. - Monitoring and reviewing the Group's culture, values and performance, through regular discussions with the Executive Directors, senior management and their teams and through the workforce engagement representative on the Board who held round table sessions with employees of the Group. ### Board gender diversity as at the date of this Annual Report Female Male ![img-34.jpeg](img-34.jpeg) ### Board independence as at the date of this Annual Report Independent Directors (including Chair) Non-Independent Directors ![img-35.jpeg](img-35.jpeg) ### Board tenure as at the date of this Annual Report 0-3 years 3-6 years 6+ years ![img-36.jpeg](img-36.jpeg) ### Board ethnicity as at the date of this Annual Report Ethnically diverse White ![img-37.jpeg](img-37.jpeg) Read more about key activities of the Board on page 63 Plus500 Ltd. 2023 Annual Report | 54 --- Strategic Report | Governance | Financial Statements ## BOARD SKILLS AND EXPERIENCE ### Number of Board members with relevant skills and experience | Audit and risk management | 7 | | --- | --- | | Finance, banking, financial services and fund management | 6 | | Capital raising, mergers, acquisitions, investment and transactions | 4 | | Marketing | 3 | | Compliance and regulation | 7 | | Shareholder relations | 4 | | Digital technology | 4 | | Innovation | 6 | | ESG | 6 | | Enterprise risk management | 6 | #### Board effectiveness The Board holds meetings in accordance with its scheduled calendar. Each Board meeting is preceded by a clear agenda and any relevant information is provided to the Directors in advance of the meeting. The Board met on ten occasions in 2023 to review, formulate, discuss and approve the Group's strategy and roadmap, budgets and corporate actions and to oversee the Group's progress towards its goals. The Board also receives updates on operational, financial and regulatory and other business matters, on a regular basis or whenever necessary. #### Board changes Anne Grim stepped down from the Board in September 2023, having completed a three-year term as an Independent Non-Executive Director and External Director. Anne was elected in January 2024 for a one-year term as an Independent Non-Executive Director, with immediate effect. Sigalia Heifetz, an Independent Non-Executive Director, passed away on 30 December 2023. Daniel King was elected in January 2024 for a three-year term as an Independent Non-Executive Director and External Director, commencing in June 2024. Nomination Committee Report page 69 #### Board evaluation During the year, the Board conducted an internal Board effectiveness evaluation, led by the Chair and the Company Secretary, following an independent third-party evaluation conducted in 2022, in accordance with provision 21 of the Code which recommends that FTSE 350 companies should consider having an external evaluation once every three years. As part of this process, Board members were requested to complete questionnaires and to evaluate the performance of the Board and its Audit Committee, as well as the performance of the Chair. These questionnaires were developed by the Chair and the Company Secretary, taking into consideration the findings of the 2022 independent third-party evaluation as well as the Financial Reporting Council's Guidance on Board Effectiveness. Read more on page 66 #### Board training and development In order to further develop the Board's understanding and awareness of the business and its future prospects, all Board members receive updates, on changes and developments in the business and the environment and territories in which the Group operates, on a regular basis. During the year, Board members also attended training sessions on various areas, including prevention of corruption and bribery, the Plus500 onboarding funnel and developments in UK regulation, including the reform of the FCA Listing Regime, MiFID product governance and the FCA's Consumer Duty. In line with Plus500's further development as a global multi-asset fintech group, and in order to appropriately govern and manage the business as it seeks to achieve significant future growth, a further comprehensive Board training plan for 2024 was adopted. Read more on page 67 Plus500 Ltd. 2023 Annual Report | 55 --- Strategic Report | Governance | Financial Statements # CHAIR'S INTRODUCTION TO GOVERNANCE # CHAIR'S INTRODUCTION TO GOVERNANCE ![img-38.jpeg](img-38.jpeg) "The Board has continued to be highly effective during 2023 in assessing the Group's strategy and the progress made in this regard, as well as in reviewing key operational elements of the business." Prof. Jacob A. Frenkel Chair of the Board # Dear Shareholder I have served as Chair of Plus500 for three years now, and I am honoured to take this opportunity to give you an overview of the work of our Board during 2023, which included continued review and assessment of the various aspects of our business, including corporate governance, sustainability and remuneration. First, and on behalf of the Board, I would like to honour the memory of Ms. Sigalia Heifetz, who served on the Board as an Independent Non-Executive Director for almost three years, until sadly passing away on 30 December 2023. Her experience and wisdom were invaluable to us all and the Board and I would like to express our sincere appreciation for her significant contribution. On behalf of the Board and colleagues from Plus500, I would like to share our deepest condolences with Sigalia's family and friends. Corporate governance remained a key theme for the Board during 2023, and I am delighted that we have managed to preserve the Board's diversification, in line with the Code and the recommendations of the FTSE Women Leaders Review and the Listing Rules on gender equality in leadership positions. At our recent Extraordinary General Meeting, held in January 2024, our shareholders approved the appointment of Ms. Tami Gottlieb for a second three-year term as an Independent Non-Executive Director and External Director, as well as the appointment of Ms. Anne Grim for a one-year term as an Independent Non-Executive Director. Also at this EGM, our shareholders approved the appointment of Mr. Daniel King as an Independent Non-Executive Director and External Director, and he will join our Board in June 2024. Shareholder engagement remained highly important to us, and during the year I met with a number of our major shareholders to ask for feedback on the Company's approach to governance, its strategic priorities and its operational and financial performance. I plan to continue meeting with key investors regularly, to ensure we keep representing investors' interests. Also in 2023, we continued to dedicate considerable time to evaluate the effectiveness of the work of our Board and its Audit Committee. As noted in last year's Annual Report, during 2022 we undertook an independent third-party review by Nasdaq Governance Solutions. This was a valuable exercise which resulted in a number of important insights and recommendations which were implemented during the course of 2023, together with having an additional internal review in 2023. As detailed below, and as detailed further in the independent reports of each of our Board Committees, the Committees have continued to assist the Board with reviewing, monitoring and promoting high standards of corporate governance. Also, during 2023, we approved several rotations to the Committees' compositions, including rotations of some Committees' chair roles, following changes made to the composition of the Board as a whole during the past two years. Led by its chair, Mr. Steve Baldwin, the Nomination Committee continues to review the relevant experience, knowledge and skill set needed for the Board, while always considering diversity and the importance of independent thinking and challenge. The Committee will also continue to regularly review the size of the Board so as to confirm that it is appropriate and maintains an effective oversight of the executive team while providing sufficient constructive challenge and support. Following the significant effort by the Nomination Committee made during the past two years, in 2023 we were able to ensure further diversification of the composition of the Board, resulting in our Board having 43% female representation (following the recent passing away of Ms. Sigalia Heifetz on 30 December 2023, the percentage of women on the Board as of the date of this Annual Report decreased from 50% to 43%). The Committee also continued to discuss and consider the Board's ethnic diversity and concluded that the Board is sufficiently diverse also from that perspective, given the mixed ethnic background of certain Board members. Plus500 Ltd. 2023 Annual Report 56 --- Strategic Report | Governance | Financial Statements In 2023, we continued to oversee the principal and emerging risks including business, financial, strategic and operational challenges facing the Group. The Regulatory & Risk Committee, led by its Chair, Prof. Varda Liberman, reviews these risks and receives assurance from the management team and the Group's various advisors as to how they are understood and mitigated to the level of risk acceptable to the Board. During the year, the Regulatory & Risk Committee has monitored upcoming regulatory changes that have arisen. The Audit Committee, led by its Chair, Ms. Tami Gottlieb, continues its dedicated work overseeing the internal controls of the business as well as the internal audit plan and its implementation. These activities also follow the significant effort made by the Audit Committee last year to replace the Company's internal auditors. Also during the year, the Audit Committee went through an internal evaluation of its effectiveness, to complement the independent third-party evaluation conducted in 2022. During the year, the Board has continued to develop and strengthen the Group's ESG framework, led by its ESG Committee, to further assess the Group's priorities and risks in the continually developing area of ESG. Chaired by Mr. Steve Baldwin, and supported by the ESG internal working group, alongside external ESG advisors, the Committee reviewed Plus500's Environmental Policy and made sure we continue to be aligned with the TCFD recommendations. Further details are available in our ESG Report, TCFD Report and in the Report of the ESG Committee. The Remuneration Committee continued to monitor all areas of remuneration, including Non-Executive Directors' and Executive Directors' remuneration, and ensured continued alignment with the Company's Remuneration Policy for Directors and Executives for the years 2021-2023, as approved at the Company's 2021 AGM. Executive remuneration remains a significant area of focus for UK listed companies. Accordingly, and following the rigorous consultation and policy development process made in connection with this Remuneration Policy, and in conjunction with consultation with shareholder advisory bodies and various shareholders, the Remuneration Committee developed a new Remuneration Policy for the years 2024-2028 which took effect on 1 January 2024, following its approval by shareholders at our 2023 AGM held on 2 May 2023, as further detailed in the Report of the Remuneration Committee. The Board has continued to be highly effective during 2023 in assessing the Group's strategy and the progress made in this regard, as well as in reviewing key operational elements of the business. The Board remains very supportive of Executive Management in further establishing Plus500's strategic position as a global multi-asset fintech group, through a clear focus on delivering growth and innovation, supported also by organic investments and targeted acquisitions. This strategy is key to the Group's future success and has continued to drive the diversification of the Group's revenue streams, product range, geographic footprint and enabled the Group's reinforced financial position. This is mostly evident in the significant progress made during the year with growing both the B2B and B2C businesses in the US futures market, and in the launch of the FX OTC trading platform in Japan. This is also evident in the continued enhancement of the Group's geographic footprint, with the expansion into new geographies made during 2023, namely, the UAE and the Bahamas. Finally, and on behalf of all Board members, I would like to share our deep gratitude to all of our management and talented employees across our operations around the world, for their excellent contribution to the Group's culture, performance and great achievements during the year and for their dedicated work. I am glad that you are all part of the wonderful Plus500 family. The following Governance Report describes the activities of the Board and its Committees during 2023 in more detail. I look forward to reporting on the Board's further progress in next year's Annual Report. Prof. Jacob A. Frenkel Chair of the Board 29 March 2024 # UK Corporate Governance Code Compliance Statement As a Premium listed company, and with respect to 2023, Plus500 is required to comply with the principles and provisions of the UK Corporate Governance Code 2018 (the "Code") (a copy of which can be found on the website of the Financial Reporting Council: www.frc.org.uk), or otherwise explain its reasons for non-compliance. The following statement is therefore made in respect of the year ended 31 December 2023 in compliance with this requirement and explains how the principles of the Code were applied. As a company incorporated in Israel, Plus500 is subject to various mandatory corporate governance requirements under the Companies Law. The Company considers methods for being aligned with the Code's provisions, which in some areas may contradict the Companies Law provisions, while also complying with the mandatory requirements stipulated under the Companies Law, as further detailed in this statement. For the financial year ended 31 December 2023, the Company has complied with the provisions of the Code, other than in respect of the External Directors' re-election mechanism (Provision 18 of the Code) and in relation to pay ratios and pay gaps (Provision 41 of the Code). While the Code recommends the submission of all directors for re-election annually, the Companies Law requires that a public company must have at least two External Directors who meet certain statutory requirements of independence. The External Directors, as prescribed by the mandatory requirements of the Companies Law, must be elected for three-year terms and not annually as the Code recommends. Following our shareholders' approval at the Extraordinary General Meeting held in January 2024, Daniel King will serve as the Company's second External Director as of June 2024, alongside Ms. Tami Gottlieb. Plus500 is not required to compile gender pay gaps and pay ratios under the Israeli legislation, whereas companies incorporated in the United Kingdom are required to do so under UK legislation. Plus500 Ltd. 2023 Annual Report | 57 --- Strategic Report | Governance | Financial Statements BOARD OF DIRECTORS # BOARD OF DIRECTORS As at the date of this Annual Report ## The Role of the Board The Board is responsible to shareholders for effective direction and control of the Company, for promoting its long-term success and determining the Group's strategy, vision and culture. In order to lead the development of the Company's strategy, the Board is provided with timely and comprehensive information that enables it to effectively review and monitor the performance of the Company and to ensure it is in line with its objectives for achieving its strategic goals. ## Committee ## Membership Key: - N Nomination - A Audit - iD Regulatory & Risk - R Remuneration - E ESG - D Disclosure - ● Chair of the Committee ![img-39.jpeg](img-39.jpeg) Prof. Jacob A. Frenkel Chair Tenure: 3 years (Appointed May 2021) Prof. Jacob A. Frenkel is a Non-Executive Director and Chair of the Board. Prof. Frenkel is a renowned global economist and illustrious business leader, with significant experience developed over many years of leadership. He is Chairman Emeritus of the Group of Thirty (G-30), and Chairman of BrainStorm Cell Therapeutics Inc., a NASDAQ-listed biotechnology company. Prof. Frenkel served as Chairman of JPMorgan Chase International (2009-2020), Chairman and CEO of the G-30 (2001-2011), Chairman of the Board of Trustees of the G-30 (2012-2022), Vice Chairman of American International Group, Inc. (2004-2009), Chairman of Merrill Lynch International (2000-2004), Chairman of the Board of the Inter-American Development Bank (1995-1996) and Vice Chairman of the Board of the European Bank for Reconstruction and Development (1999-2000). He also served as Chairman of the Board of Governors of Tel Aviv University (2013-2021). Prior to this, he served two terms as the Governor of the Bank of Israel (1991-2000), as the Economic Counsellor and Director of Research at the International Monetary Fund (1987-1991), having previously been Professor of Economics and the David Rockefeller Professor of International Economics at the University of Chicago (1973-1987). He is a Laureate of the Israel Prize in Economics and is a recipient of several Honorary Doctoral Degrees and other decorations and awards. He is an Honorary Member of the American Academy of Arts and Sciences, a Fellow of the Econometric Society, a Fellow of the International Economic Association, a Senior Advisor of Temasek International Advisors, a member of the Competitive Markets Advisory Council of the CME Group, a Global Member of the Trilateral Commission, a former member of the Economic Advisory Panel of the Federal Reserve Bank of New York, a member of the G20 Eminent Persons Group on Global Financial Governance, and a member of the G20 High Level Independent Panel on Financing of the Global Commons for Pandemic Preparedness and Response. Prof. Frenkel holds a BA in Economics and Political Science from the Hebrew University of Jerusalem, and an M.A. and Ph.D. in Economics from the University of Chicago. Plus500 Ltd. 2023 Annual Report 58 --- Strategic Report | Governance | Financial Statements ![img-40.jpeg](img-40.jpeg) # David Zruia Chief Executive Officer and Director Tenure as a Director: 4 years (Appointed April 2020) At Plus500 since 2010 David Zruia is the Chief Executive Officer. David joined Plus500's leadership team in 2010 as a senior manager in the Group's marketing department. In that role, David was instrumental in establishing Plus500's technology-based marketing capabilities and in building awareness of, and recognition for, the Plus500 brand in key strategic markets around the world, through a broad range of marketing initiatives and activities. He was appointed as the Group Chief Operations Officer in 2013 and led the establishment and management of the operational division of the Group, including the implementation and development of 'KYC' processes, payments processing, back-office services, customer support and risk management. In April 2020, David was appointed as Chief Executive Officer of Plus500. Since that time, under his leadership, Plus500 has developed a new strategic roadmap, which has been designed to diversify and grow the business as a global multi-asset fintech group. As part of the new strategic roadmap, Plus500 has conducted its first ever acquisitions, in the US and Japan, thereby expanding the Group's global footprint, broadening its product range and enabling access to a number of significant future growth opportunities for Plus500. David holds a B.Sc. in Industrial Engineering and Management from the Technion – Israel Institute of Technology. ![img-41.jpeg](img-41.jpeg) # Elad Even-Chen Group Chief Financial Officer and Director Tenure as a Director: 8 years (Appointed June 2016) At Plus500 since 2011 Elad Even-Chen is the Chief Financial Officer of the Group and Vice President of Business Development. Elad joined Plus500's leadership team in 2011 as Group VP of Business Development and Head of Risk Management. Elad's responsibilities cover a broad range of finance, business, corporate and strategic functions. Elad established the business development department which he is leading and managing. The business development department is responsible for the Group's strategic investments and expansion plans into new and existing markets, through receipt of new regulatory licences across the globe, including by targeting and executing acquisitions. Under his leadership, the Group obtained 12 international regulatory licences and made three acquisitions in the US and Japan, representing the Group's first M&A transactions. Elad has played a key role in driving the Group's strategic and financial performance and its business expansion in recent years, into new markets and new product areas. Elad also leads the Group's financial divisions and as the Group's Chief Financial Officer oversees the financial performance, including treasury, consolidated financial statements and tax matters. Elad has an extensive corporate finance, legal and regulatory background. Over the last 13 years he has held a number of positions within the Group also acting as Company Secretary and Head of IR. Elad is a certified accountant in Israel and, prior to joining the Group, was a senior associate at KPMG. Elad holds a BA in Accounting and Economics from Tel Aviv University, an LL.B from the College of Management and an MBA (specialising in Financial Management) from Tel Aviv University. Plus500 Ltd. 2023 Annual Report 59 --- Strategic Report | Governance | Financial Statements BOARD OF DIRECTORS CONTINUED ## Committee Membership Key: - N Nomination - Audit - Regulatory & Risk - Remuneration - ESG - Disclosure - Chair of the Committee ![img-42.jpeg](img-42.jpeg) ### Prof. Varda Liberman Senior Independent Non-Executive Director Tenure: 2 years (Appointed March 2022) Prof. Varda Liberman is a Non-Executive Director, the Senior Independent Director and Chair of the Regulatory & Risk Committee. Prof. Liberman is an internationally renowned expert in the field of decision-making and behavioural economics. In this capacity, she provides consulting and workshops in key elements of managerial decision-making and risk management to senior managements in organisations across a range of sectors, including healthcare, banking, investment, technology, the judicial system and the Israeli Defence Forces. Prof. Liberman is the Provost (Rector) of Reichman University in Israel, and one of its founders and leaders. She is a professor of the business school of Reichman University, a visiting researcher at Stanford University, and the author of several books and many scientific articles. Over the years, she has held a variety of managerial positions at Reichman University, among them heading the mathematics and statistics studies, leading the decision-making area in the business school, and founding and heading the MBA programme in Healthcare Innovation. Prof. Liberman holds a B.Sc. in Mathematics and Statistics, an M.Sc. in Mathematics and a Ph.D. in Mathematics, all from Tel Aviv University. ![img-43.jpeg](img-43.jpeg) ### Tami Gottlieb Independent Non-Executive Director and External Director Tenure: 3 years (Appointed March 2021) Tami Gottlieb is a Non-Executive Director and Chair of the Audit Committee. Tami has a long track record in the financial services industry in Israel and is currently an External Director at Bank Leumi Le-Israel B.M. – one of Israel's two largest commercial banks, where she is the Chair of the Audit and Financial Reports Committees and a member of the Remuneration and Business & Credit & Resources Committees, having previously been on the Technology Committee and on the Risk Management Committee. Tami Gottlieb is also an Independent Director at Novolog (Pharm-Up 1966) Ltd, a Director at Emilia Development (O.F.G) Ltd and the Chairperson of Kibbutz Kfar Aza. She is also a founder and Co-Managing Director of Harvest Capital Markets Ltd, a wealth management and corporate finance boutique firm. Tami holds a BA in International Relations from the Hebrew University of Jerusalem and an MA in Economics from Indiana University. Plus500 Ltd. 2023 Annual Report 60 --- Strategic Report | Governance | Financial Statements ![img-44.jpeg](img-44.jpeg) # Steve Baldwin Independent Non-Executive Director Tenure: 7 years (Appointed June 2017) Steve Baldwin is a Non-Executive Director and Chair of the Nomination and ESG Committees. Steve is currently the Chair of TruFin plc and is also a Non-Executive Director of The Edinburgh Investment Trust PLC. Steve has an extensive corporate finance background and held the position of Head of European Equity Capital Markets and Corporate Broking at Macquarie Capital until 2015, when he decided to pursue a non-executive career. Prior to joining Macquarie Capital, Steve was a Corporate Finance Director at JP Morgan Cazenove for ten years and previously a Vice President of Corporate Finance at UBS. Steve qualified as a Chartered Accountant at Coopers & Lybrand in London after graduating with a BA in Zoology from St Catherine's College, Oxford University. ![img-45.jpeg](img-45.jpeg) # Anne Grim Independent Non-Executive Director Tenure: 3.5 years (Appointed September 2020) Anne Grim is a Non-Executive Director. Anne is an experienced executive advisor, consultant and board member with more than 30 years in senior financial services leadership roles at Barclays, Wells Fargo, American Express, Mastercard and as Chief Customer Officer at Fidelity International, prior to embarking on her Board portfolio career. Her expertise is in customer experience, strategic planning and execution, technology innovation and business transformation. Anne is an Independent Non-Executive Director for Insight Investment, where she chairs Insight Investment Fund Management Ltd and the Insight Investment Strategic Technology Committee and The Bank of London, where she chairs the Board's Risk Committee. Anne holds a BA in Mathematics and Computer Science and an MBA in Strategic Management and Finance, both from the University of Illinois. # Committee # Membership Key: - Nomination - Audit - Regulatory & Risk - Remuneration - ESG - Disclosure - Chair of the Committee Plus500 Ltd. 2023 Annual Report 61 --- Strategic Report | Governance | Financial Statements # GOVERNANCE REPORT # GOVERNANCE REPORT ## The Board The Board maintains full control and direction over appropriate strategic, financial, organisational and compliance issues. The Company's organisational structure has clearly defined lines of authority, responsibility and accountability, which are reviewed regularly. The annual budget and forecasts are reviewed by the Board prior to their approval. This includes the identification and assessment of the business risks inherent in the Group and the online financial trading industry as a whole, along with associated financial and regulatory risks. At least annually, and on other occasions as necessary, the Company's senior executives are invited to attend meetings of the Board in order to present and discuss various matters relating to their functions and areas of responsibilities. ## Board activities during the year The Board agrees at the end of each year the annual calendar and forward meeting agenda for the following year, and additionally meets at such other times as required. The matters accepted by the Board for consideration at Board meetings are: business strategy, operational highlights and current trading, budget and financial performance, governance, sustainability, organisational culture and risk and regulation. This is further detailed in the schedule of matters specifically reserved for decision by the full Board, which can be found on the Company's website: www.plus500.com. ## Board committees In order to assist the Board in carrying out its responsibilities and as required under the Companies Law, the Board has appointed six principal Committees to which certain aspects of the Board's work are delegated. Each Committee has adopted its own terms of reference, approved by the Board, and establishes an annual plan. The full terms of reference of the Board's Committees are available on the Company's website. The Chair of each Committee provides regular updates to the Board on the matters discussed at the Committee's meetings and provides the Committee's recommendations to the Board when required. A brief description of the main roles of each of the Board Committees is set out below. ### Nomination Committee The Nomination Committee has been delegated responsibility for the oversight of appointments to the Board and the senior management team. The Committee's responsibilities, main activities and priorities for the next reporting cycle are set out on pages 69 to 73. ### Audit Committee The Audit Committee has been delegated responsibility for ensuring that the financial performance of the Group is properly reported on and reviewed. The Audit Committee is also responsible for the monitoring of the external auditor, the internal auditor and oversight of internal controls. The Committee's responsibilities, main activities and priorities for the next reporting cycle are set out on pages 74 to 80. ### Regulatory & Risk Committee The Regulatory & Risk Committee has been delegated responsibility for the monitoring and oversight of risk management and mitigation and the approval of the Group's risk appetite. The Committee's responsibilities, main activities and priorities for the next reporting cycle are set out on pages 81 to 83. ### ESG Committee The ESG Committee has been delegated responsibility for considering the adequacy of the Group's ESG policies and processes. The Committee's responsibilities, main activities and priorities for the next reporting cycle are set out on pages 84 to 86. ### Remuneration Committee The Remuneration Committee has been delegated responsibility for determining, within the agreed terms of reference and in accordance with the Companies Law, the Company's remuneration policy for Directors and Executives, the remuneration packages of the Company's Chief Executive Officer and Chief Financial Officer, the Chair and other Non-Executive Directors, the Company Secretary and other senior Executives. The Committee's responsibilities, main activities and priorities for the next reporting cycle are set out on pages 87 to 92. ### Disclosure Committee The Disclosure Committee assists the Board in fulfilling its obligation to make timely and accurate disclosure of all information that is required to be disclosed to meet legal and regulatory requirements and obligations under the UK Market Abuse Regulations and the Disclosure Guidance and Transparency Rules of the FCA, including the requirement for the Company to establish and maintain adequate procedures, systems and controls to enable it to comply with these obligations. Whenever necessary, the Committee meets to discuss the content of announcements proposed to be released to the London Stock Exchange and approve their content. Plus500 Ltd. 2023 Annual Report | 62 --- Strategic Report | Governance | Financial Statements ## Board activity in 2023 | **Strategy** | - During 2023, the Board discussed on-going actions to be taken to further develop the Group's strategic roadmap for the coming years, as set out on pages 12 to 13. - The Board held strategic discussions relating to further growing Plus500's B2B (Institutional) and B2C (Retail) businesses in the US futures market, and to the progress made in developing its operation in Japan, with the launch of a new proprietary trading platform. These projects are all in line with the strategy to evolve into a multi-asset fintech group and expanding the Group's geographic footprint. - The Board reviewed licence applications prepared during the year, in line with its strategy to expand its geographic footprint. In February 2023, the Group obtained a regulatory licence in the UAE, granted by the Dubai Financial Services Authority (DFSA). In July 2023, the Group obtained a new regulatory licence, granted by the Securities Commission of the Bahamas (SCB). These new regulatory licences take the Group's total to 13 regulatory licences globally. | **People, governance, risk and regulation** | The Board received updates and conducted discussions on regulatory developments and emerging risks. It also received training and briefings on regulation, in addition to on-going updates on compliance and risk matters. | | --- | --- | --- | --- | | **Business, operational highlights and current trading** | The Board received monthly updates, including CEO and CFO reports, financial performance and business development updates and risk and compliance reports. | **Whistleblowing** | The Board reviewed and approved the Group's Whistleblowing Policy, as it does on an annual basis, and received an update by the Whistleblowing Supervisor that no complaints were received in 2023. | | **Quarterly forecasts and budget** | Updates were provided and discussed on a monthly and quarterly basis. Discussions on the 2024 budget were held in October and December 2023, with final approval received in December 2023. | **Culture and values** | The Board continued to monitor and review the Group's culture, values and performance primarily through regular discussions with the Executive Directors, senior management and their teams. In addition, Steve Baldwin, in his role as the workforce engagement representative on the Board, held round table sessions with employees of the Group. | | **Financial performance** | The Board reviewed and approved the on-going trading updates and results announcements. The Board considered and approved the Consolidated Financial Statements and the Annual Report. | **Shareholder returns** | The Board approved share buyback programmes and declared the payment of dividends during the year, in line with the Company's shareholder returns policy. | | | | **Internal Board evaluation** | An internal effectiveness evaluation of the Board and its Audit Committee has been conducted, following an independent third-party evaluation held in 2022, and a discussion was held to address the recommendations provided, as further detailed on pages 66 to 67. | | | | **Other** | - Reviewed monthly reporting decks on risk and compliance; - Received on-going updates from Board Committees' Chairs; - Board training sessions on various topics, including: prevention of corruption and bribery, Plus500 onboarding funnel and developments in the UK regulation (e.g.: the reform of the FCA Listing Regime, MiFID product governance and the FCA's Consumer Duty); - Annual review and approval of Human Rights and Modern Slavery Statement; and - Annual review and approval of Company's policies and procedures. | Plus500 Ltd. 2023 Annual Report | 63 --- Strategic Report | Governance | Financial Statements # GOVERNANCE REPORT CONTINUED # Operation of the Board The Board is responsible for the effective direction and control of the Group as well as for the overall strategy and financial performance of the Group. The Board has a formal schedule of matters reserved for its approval, which covers key strategic, financial and operational matters including: - Approval of the Group's strategic objectives; - Approval of the annual operating and capital expenditure budgets of the Group, and any material changes to them; - Changes to the Group's capital structure, management and control structure; - Contracts which are material, strategically or by reason of size, entered into by the Company in the ordinary course of business; and - Recommended appointments to the Board. # Board effectiveness The Board holds its meetings in accordance with its scheduled calendar. Each Board meeting is preceded by a clear agenda and any relevant information is provided to the Board members in advance of the meeting. The Board met on ten occasions in 2023 to review, formulate and approve the Group's strategy, budgets and corporate actions and to oversee the Group's progress towards its strategic goals. The Board also holds regular conference calls to update its members on operational and other business matters. A summary of the key activities of the Board in 2023 is set out on page 63. Where Board members have concerns, which cannot be resolved, about the running of the Company or a proposed action, they may request that their concerns are recorded in the Board minutes. An agreed procedure exists for Board members in the furtherance of their duties to take independent professional advice. # Chair of the Board The Chair of the Board, Prof. Jacob A. Frenkel, is responsible for leading the Board and ensuring its effectiveness, by setting the relevant agenda and providing sufficient time for constructive discussions in which the Board has the ability to challenge the discussed items. The Chair is responsible for creating the open and engaging atmosphere that enables the healthy and constructive discussions of the Board. The Chair is also responsible for ensuring effective communication between Executive and Non-Executive Directors, shareholders and between other major stakeholders and the Board. # Chief Executive Officer The Chief Executive Officer, David Zruia, acts as the main point of communication between the Board and management and is responsible for the day-to-day running of the business and implementation of strategy. # Chief Financial Officer The Chief Financial Officer, Elad Even-Chen, is responsible for covering a broad range of finance, business, corporate and strategic functions, such as monitoring the operational and financial results, overseeing liquidity, managing the financial reporting of the Group and developing the Group's strategy to continue expanding into new and existing markets. # Non-Executive Directors Collectively, the Non-Executive Directors bring a valuable range of expertise in assisting the Company to achieve its strategic goals. The effectiveness of the Board benefits from the following skills, expertise and experience offered by the current members of the Board: audit and risk management, financial services, accounting, governance, shareholder relations, ESG, compliance and regulation, marketing, innovation, digital technology and other financial expertise. # Senior Independent Director (SID) The Senior Independent Director, Prof. Varda Liberman, acts as a sounding board for the Chair, providing him with support in the delivery of his objectives and leading the evaluation of the Chair on behalf of the other Board members. As a Senior Independent Director, Prof. Varda Liberman may also take responsibility for an orderly succession process for the Chair. She currently chairs the Regulatory & Risk Committee and also serves on several other Board Committees. She is available to meet with shareholders if they have concerns which are not being addressed through the usual channels of the Chair, the Chief Executives or the Investor Relations function. # Company Secretary The Company Secretary, Hila Barak, is responsible for ensuring that the Company complies with the statutory and regulatory requirements and maintains high standards of corporate governance. She supports and works closely with the Chair of the Board, the Senior Independent Director, the Chief Executives and the Board Committees' Chairs, in setting agendas for meetings of the Board and its Committees. She also supports the transfer of timely and accurate information flow from and to the Board and the management of the Company. For over a decade, Hila has been a certified lawyer in Israel. She joined Plus500 in 2020 after years of experience in corporate and securities law, being an associate with one of the leading law firms in Israel. Hila holds an LLB (Magna Cum Laude), BA in Social Science and an Executive MBA, all from the University of Haifa. All Board members have access to the advice and services of the Company Secretary. Both the appointment and removal of the Company Secretary are a matter for the Board as a whole. Plus500 Ltd. 2023 Annual Report | 64 --- Strategic Report | Governance | Financial Statements ## Induction of newly appointed Board members Whenever there is a necessity to add a new Non-Executive Director to the Board, the Nomination Committee operates an orderly procedure for identifying the relevant skills, knowledge and experience which are required. As part of this process, the Nomination Committee takes into consideration various parameters, including the existing skill set on the Board as well as diversity aspects. Where a potential candidate is identified, the Nomination Committee recommends the appointment to the Board. If approved by the Board, it recommends the appointment to the Company's shareholders (where applicable). Newly appointed Board members are made aware of their responsibilities through the Company Secretary. The Company has accordingly implemented an internal induction plan for newly appointed Board members which provides them with training sessions via internal meetings, presentations and discussions. These are conducted by the Company's advisors (such as legal advisors), the senior management and other relevant persons in order to enable greater awareness and understanding of the Company's business and the legal and business environment in which it operates. Moreover, the induction plan includes provision of various documents and reports, such as constitutional documents, organisational charts and Group structure, previous Board minutes, Group's policies as well as PR and IR materials. ## Board composition As at the date of this Annual Report, the Board comprises two Executive Directors (who constitute 29% of the Board): David Zruia and Elad Even-Chen, and five Non-Executive Directors (who constitute 71% of the Board): Prof. Jacob A. Frenkel (Chair of the Board), Prof. Varda Liberman (Senior Independent Non-Executive Director), Steve Baldwin, Tami Gottlieb and Anne Grim. Prof. Frenkel was independent on appointment (and the Board considers still is), in accordance with the requirements of the Code. In accordance with the Companies Law, the Board must have at least two external directors who meet certain statutory requirements of independence (the "External Directors"). Following shareholders' approval at the Extraordinary General Meeting held on 8 January 2024, Daniel King will serve as the Company's second External Director, alongside Tami Gottlieb. Under the Companies Law, the term of office of an external director is three years, which can be extended for two additional three-year terms. External directors are elected by shareholders subject to a special majority and may be removed from office only in limited cases. In addition, any committee of the board of directors of the company to which the board delegated one or more of its responsibilities must include at least one external director and the audit committee and remuneration committee must each include all of the external directors (including an external director serving as the chair of the audit committee and remuneration committee). A majority of the members of the audit committee must comply with the director independence requirements, while the majority of the members of the remuneration committee must be external directors and its other members must be remunerated in the same manner as the external directors. On 12 March 2024, an amendment to the Companies Regulations (Reliefs for Israeli Public Companies Listed on Stock Exchanges Outside of Israel) was published in the Official Gazette, which is intended to provide reliefs from certain requirements currently applicable to Israeli companies, whose securities are traded on foreign stock exchanges, including Plus500. The amendment includes, among other things, specific reliefs that apply to Israeli companies listed outside of Israel who do not have a controlling shareholder and who comply with the law of the foreign country, as it applies to domestic companies in that foreign jurisdiction, such as Plus500, and including reliefs in connection to appointments and structure of the compensation and audit committees, as well as in relation to the appointment of external directors to the board of directors of the company. Given the date of which the aforementioned amendment came into effect, as of the date of approval of this Annual Report, the Board is examining the effect of the amendment on Plus500. It should be clarified that as of the date of publication of this Annual Report, Plus500 has not adopted any reliefs, and therefore, the disclosure in this Annual Report refers to the Israeli law that was applicable to Plus500 before the aforementioned amendment came into force. ## Board attendance in FY 2023 Details of the number of scheduled Board meetings and individual attendance at these meetings are set out in the Board attendance table below. Where Board members are unable to attend meetings, for any reason, they are encouraged to share with the Chair in advance their views on the agenda items to be discussed at the meetings. | | SCHEDULED MEETINGS ELIGIBLE TO ATTEND | SCHEDULED MEETINGS ATTENDED | | --- | --- | --- | | **Chair of the Board** | | | | Prof. Jacob A. Frenkel | 10 | 10 (100%) | | **Executive Directors** | | | | David Zruia | 10 | 10 (100%) | | Elad Even-Chen | 10 | 10 (100%) | | **Senior Independent Non-Executive Director** | | | | Prof. Varda Liberman | 10 | 10 (100%) | | **Independent Non-Executive, External Director** | | | | Tami Gottlieb | 10 | 9 (90%) | | **Independent Non-Executive Directors** | | | | Steve Baldwin | 10 | 10 (100%) | | Anne Grim^{1} | 7 | 7 (100%) | | **Past Independent Non-Executive Director** | | | | Sigalia Heifetz^{2} | 10 | 8 (80%) | $^{1}$ Anne Grim stepped down from the Board in September 2023, after completing a three-year term as an Independent Non-Executive Director and External Director and was elected by shareholders in January 2024 for a one-year term as an Independent Non-Executive Director, commencing as of that date. $^{2}$ Sigalia Heifetz passed away on 30 December 2023. Plus500 Ltd. 2023 Annual Report | 65 --- Strategic Report | Governance | Financial Statements # GOVERNANCE REPORT CONTINUED # Election of Board members Following recommendations from the Nomination Committee and a review by the Chair of the Board, the Board considers that all Board members continue to be effective, remain committed to their roles and have sufficient time available to perform their duties. Information with respect to the re-election of Board members (excluding External Directors) will be set out in the 2024 Notice of AGM to be circulated by the Company to all shareholders in due course. Information with respect to External Directors who were recently elected for a three-year term may be found in the 2024 Notice of EGM published by the Company on 4 December 2023 (as updated on 22 December 2023). # Independence of Non-Executive Directors and time commitment Each of the Non-Executive Directors is considered to be independent of management and is considered by the Board to be free from any business or other relationships that could compromise their independence. Their role is to effectively advise and challenge management, and to monitor management's success in delivering the strategy agreed by the Board. The Chair and the Non-Executive Directors held discussions and met during the year, without the Executive Directors' presence, in order to review and monitor management performance. Also, during the year, the Non-Executive Directors, led by the presiding Senior Independent Director, met without the Chair's presence, in order to, among other things, evaluate his performance. Each Board member is aware of the need to allocate sufficient time to the Company in order to fulfil their responsibilities and is notified of all scheduled Board and Board Committee meetings. None of the Non-Executive Directors hold any directorships in any FTSE 100 company. # Conflicts of interest The Company has procedures for the disclosure and review of any conflicts of interest, or potential conflicts of interest, which may arise in relation to Board members. The Board members are asked to disclose any conflict of interest at each scheduled Board meeting and are aware of their responsibilities to avoid conflict of interest and to disclose any conflict or potential conflict of interest to the Board. A Board member who has a personal interest in a matter that is considered at a meeting of the Board, the Audit Committee or the Remuneration Committee shall not attend that meeting (unless the chair of the Board, the Audit Committee or the Remuneration Committee, as the case may be, determines that such person's presence at the meeting is required for presentation of the relevant transaction) or vote on that matter, unless a majority of the respective forum has a personal interest in the matter as well. If a majority of the Board has a personal interest in a transaction which is an extraordinary transaction (as defined in the Companies Law), then shareholders' approval is also required. The authorisation of a conflict matter, and the terms of authorisation, may be reviewed at any time by the Board. The Board considers that these procedures are operating effectively. There have been no matters arising requiring assessment by the Board as a potential conflict during this year. # Board evaluation In accordance with Provision 21 of the Code that FTSE 350 companies should consider having an external evaluation once every three years, and as a FTSE 250 company, in 2022, Plus500 engaged Nasdaq Governance Solutions to facilitate an external evaluation of the Board and its Audit Committee. The evaluation covered completion of written questionnaires via a secure digital platform, individual interviews conducted by Nasdaq Governance Solutions' experts with Board members and with the Company Secretary and observance of meetings. During the year, the Board also conducted an internal Board effectiveness evaluation, led by the Chair and the Company Secretary. All Board members were requested to complete questionnaires and to evaluate the performance of the Board in 2023, as well as the performance of the Chair. The questionnaires were developed by the Chair and the Company Secretary, taking into consideration the findings of the 2022 independent third-party evaluation and also the Financial Reporting Council's Guidance on Board Effectiveness, and were circulated to all Board members for completion. The Company Secretary discussed the feedback received from the completed questionnaires with the Chair. The final report on the feedback, comments and suggestions received was circulated to the Board, and was presented by the Company Secretary and discussed by the Board at its meeting held in December 2023. The Board evaluation covered various aspects of Board performance, including: - Board culture and accountability; - Board composition and Director engagement; - Audit, risk and internal controls; - Strategy and performance oversight; - Board meetings and administration; - Board's relationship to management; and - Remuneration, talent management and succession planning. Plus500 Ltd. 2023 Annual Report | 66 --- Strategic Report | Governance | Financial Statements The findings determined that the Board had higher degrees of effectiveness, inter alia, in relation to the following: - Board's culture leadership; - Cohesiveness, proved communication and great relationships between Board members and management; - The Board Chair is viewed by Board members as an effective leader, who consistently brings debate on critical topics to a clear closure, with consensus; - Materials are provided well in advance and Board members have sufficient time for effective preparation ahead of meetings; and - Management team is open, non-defensive, seeking input and being challenged by the Board. Opportunities for improved effectiveness were also identified, alongside some focus areas for 2024 and topics for Board training and education. To strengthen its effectiveness, the Board, supported by the Company Secretary, is evaluating the findings from both the internal evaluation conducted in 2023 as well as the independent third-party evaluation conducted in 2022, and with the help of the actions identified in the reports intends to address and strengthen different focus areas arising from these evaluations. ## Board training and development All Board members are given updates, on a regular basis, on changes and developments in the business and the environment in which the Group operates, in order to further develop the Board's understanding and awareness of the business and its future prospects. The Company Secretary and the Company's advisors provide updates to the Board on relevant legislative and regulatory corporate governance-related changes, on an on-going basis. During the year, Board members attended training sessions on various areas, including prevention of corruption and bribery, the Plus500 onboarding funnel and developments in UK regulation (e.g. the reform of the FCA Listing Regime, MiFID product governance and the FCA's Consumer Duty). In line with Plus500's position as a global multi-asset fintech group, and in order to appropriately govern and manage the business as it seeks to achieve significant future growth, a further comprehensive Board training plan for 2024 was adopted. This training plan was designed and tailored for Plus500 and the specific commercial dynamics of the business, and was developed in alignment with the recommendations received as part of the internal evaluation and the independent third-party evaluation which took place in 2023 and 2022, respectively. ## Ensuring that the Annual Report is fair, balanced and understandable In relation to the Annual Report and the Consolidated Financial Statements for the year ended 31 December 2023, the Board, in conjunction with the Audit Committee, have sought to ensure that the Annual Report is fair, balanced and understandable. The Board considers that, taken as a whole, the Annual Report is fair, balanced and understandable, and provides the information necessary for shareholders to assess the Company's position, performance, business model and strategy. The Company continues to encourage the engagement of both institutional and private investors. During the year, investor meetings were conducted. The Chief Executive Officer, David Zruia, and Chief Financial Officer, Elad Even-Chen, met regularly with institutional investors, particularly following the issuance of half and full-year results. They are usually accompanied by the Group's Head of Investor Relations, Owen Jones, who manages Plus500's relationships and communications with the investment community. Communication with private individuals is maintained through the Annual General Meeting and any Extraordinary General Meeting, the Company's annual and interim reports and the scheduled, or otherwise required, trading updates. The Chairs of the Board's Committees are available to answer questions at the Company's Annual General Meetings. In addition, further details on the strategy and performance of the Company can be found on the Investor Relations website, which includes copies of the Company's regulatory news, financial statements, trading updates, investor presentations and other reports. Regular updates are provided to the Board on meetings with shareholders and analysts, as well as on brokers' opinions. Non-Executive Directors are available to meet major shareholders, as required. Investors are also encouraged to contact the Group's Head of Investor Relations at: ir@Plus500.com. Plus500 Ltd. 2023 Annual Report | 67 --- Strategic Report | Governance | Financial Statements # SHAREHOLDER ENGAGEMENT # SHAREHOLDER ENGAGEMENT ## Major interests in shares As at 28 March 2024, being the latest practicable date before the approval of this Annual Report, the Company is aware of the following persons who, directly or indirectly, were interested in 5% or more of the Company's capital or voting rights: | FUND MANAGER | NUMBER OF SHARES | % | | --- | --- | --- | | BlackRock Inc | 4,416,681 | 5.62 | | Bank of New York | 4,051,556 | 5.16 | | The Vanguard Group, Inc | 3,941,465 | 5.02 | ## 2023 Annual General Meeting The 2023 Annual General Meeting was held on 2 May 2023. All resolutions proposed at the 2023 AGM were duly passed by shareholders by means of a poll vote (excluding a non-binding advisory vote on the Directors' Remuneration Report). The Board noted that four resolutions passed at the 2023 AGM had more than 20% of votes cast against them. These resolutions related to the re-election of Mr. Steve Baldwin as Non-Executive Director, an allotment of shares to the Chair of the Board, the approval of the remuneration policy for Directors and Executives and the remuneration terms for the CEO. Since the AGM, in line with the Company's commitment to maintaining on-going, transparent dialogue with its shareholders, the Company has engaged with various shareholder advisory bodies and its top shareholders, in order to gather their feedback on these resolutions. The Board values the feedback and insights received as part of this process and believes it has a good understanding of the reasons behind the votes cast, having engaged with shareholders and further explained the Board's position. The Board will continue to take shareholders' views into consideration as part of its approach to achieving high governance standards and delivering shareholder value. More specifically, and in relation to the votes cast against the re-election of Mr. Steve Baldwin as a Non-Executive Director, the Board understood that the reason for this related in part to his position as the Chair of the ESG Committee. As we are dedicated to operating responsibly and sustainably in all aspects of Plus500's business and taking the necessary actions to reduce the relatively minimal impact of the Group's operations on the environment, Plus500 has extended significantly the level of disclosure provided around the Group's environmental footprint, as shown in our ESG Report and TCFD Report on pages 30 to 41 of this Annual Report. For that reason, and given that our ESG Committee, led by Mr. Steve Baldwin, continues to monitor this area on an on-going basis, the Board reaffirms its belief that Mr. Baldwin remains highly suitable in his position as a Non-Executive Director and as Chair of the ESG Committee. The other three resolutions which were passed with more than 20% of votes cast against them, related to remuneration. All the other resolutions which were duly passed at the AGM, had at least 80% of votes cast in favour, while a number of resolutions relating to remuneration increases of the Chair and the Independent Non-Executive Directors have received significantly strong support by shareholders, with more than 99% of votes cast in favour. This demonstrates shareholders' overall on-going recognition of the importance of providing appropriate incentives to attract and retain high quality individuals to the Board whose stewardship is helping to drive the value of Plus500's business as the Group successfully continues to deliver against its strategic objectives. The Board remains fully committed to achieving the highest governance standards and will continue to engage regularly with shareholders and to consider their views in its decision-making. ## 2023 Extraordinary General Meeting The 2023 Extraordinary General Meeting was held on 24 July 2023. This EGM was convened for the purpose of receiving shareholders' authorisation for the Company to make purchases of its ordinary shares. This single resolution proposed at the 2023 EGM was duly passed by shareholders by means of a poll vote. ## 2024 Extraordinary General Meeting The 2024 Extraordinary General Meeting was held on 8 January 2024. This EGM was convened for the purpose of electing two Independent Non-Executive Directors and External Directors of the Company for a three-year term in accordance with the provisions of the Companies Law, and one Independent Non-Executive Director for a one-year term. All three resolutions proposed at the 2024 EGM were duly passed by shareholders by means of a poll vote. The Board noted that these resolutions had more than 20% of votes cast against the Board's recommendation for the resolutions, and therefore intends to engage with shareholders and shareholder advisory bodies to better understand their views in this regard. ## 2024 Annual General Meeting The Company's 2024 Annual General Meeting is scheduled to be held at 09.00am UK time on 7 May 2024 at Liberum Capital Limited, Level 12, Ropemaker Place, 25 Ropemaker Street, London EC2Y 9LY, UK. Details of all resolutions to be proposed at the 2024 Annual General Meeting will be included in the Notice of the 2024 Annual General Meeting to be circulated by the Company to all shareholders in due course. Plus500 Ltd. 2023 Annual Report | 68 --- Strategic Report | Governance | Financial Statements REPORT OF THE NOMINATION COMMITTEE # REPORT OF THE NOMINATION COMMITTEE ![img-46.jpeg](img-46.jpeg) "Diversity continues to be a key priority for the Committee, and I am pleased that our Board is diverse by gender, in line with the FCA Listing Rules, alongside the diverse skill set of our Board members." Steve Baldwin Chair of the Nomination Committee ## Committee attendance in FY 2023 Details of the number of scheduled Committee meetings and individual attendance at these meetings are set out in the Committee attendance table below. | | SCHEDULED MEETINGS ELIGIBLE TO ATTEND | SCHEDULED MEETINGS ATTENDED | | --- | --- | --- | | Steve Baldwin (Chair) | 2 | 2 (100%) | | Prof. Jacob A. Frenkel | 2 | 2 (100%) | | Anne Grim^{1} | 1 | 1 (100%) | $^{1}$ Anne Grim stepped down from the Committee and the Board in September 2023 after completing a three-year term as an Independent Non-Executive Director and External Director and was elected by shareholders in January 2024 for a one-year term as an Independent Non-Executive Director commencing as of that date. ## Dear Shareholder As the Chair of the Nomination Committee, I am pleased to have this opportunity to give you an overview of the work of the Committee during 2023. The Board is committed to evaluating and reviewing its structure, size and composition, including its balance of skills, knowledge, experience and diversity (including gender and ethnic diversity) while factoring in the Company's strategy, risk appetite and future development. The Nomination Committee reviews and assesses the Board and Committees' compositions on behalf of the Board on a continual basis and whenever needed, recommends the appointment of new Board members, as well as recommends the rotations to several Board and Committees' roles. In reviewing Board composition, the Nomination Committee considers the benefits of all aspects of diversity. I am pleased that in 2023 the Committee continued to assist the Board in this regard. The Board is committed to diversity of gender, ethnicity, background, nationality and professional experience and, as a result, several new appointments of Non-Executive Directors have been made over the past three years. As a result of these important changes, we have maintained the gender diversity on the Board, as during the vast majority of FY 2023 we had 50% female representation. As at the date of this Annual Report, our Board has 43% female representation (following the passing away of Ms. Sigalia Heifetz on 30 December 2023). However, the Board continues to meet the diversity targets set out by the FCA. I am also delighted that one of the senior Board positions is held by a woman (Prof. Varda Liberman, as the Senior Independent Director). In 2023, the Committee also dedicated time to review the composition of the Board Committees and recommended several changes to the Board in this regard. Plus500 Ltd. 2023 Annual Report 69 --- Strategic Report | Governance | Financial Statements # REPORT OF THE NOMINATION COMMITTEE CONTINUED Diversity continues to be a key priority for the Committee, and I am pleased that our Board is diverse by gender, in line with the FCA Listing Rules, alongside the diverse skill set of our Board members. As at the date of this Annual Report, 29% of Board members (two Board members out of seven Board members) are from a mixed ethnic background. According to the evaluation carried out by the Board, all Non-Executive Directors are considered to be independent in character and judgement and no cross-directorships exist between any of the Board members. Due to the enhanced role of the Nomination Committee set out in the Code, we are continuing to develop our programme of activity accordingly. Throughout 2023, the Nomination Committee dedicated time to review and discuss succession planning across the business, in order to ensure, among other things, that there is a good pipeline of female successors to many of the senior management roles throughout the business, globally. Also, the Nomination Committee ensured that all immediate successors are being developed in accordance with the Company's training programme which is in place. The Committee will continue this year to ensure that there is a strong talent pipeline with the necessary set of skills and expertise, while considering female representation and other diversity pillars as part of this process. At the Extraordinary General Meeting held in January 2024, our shareholders approved the Board's recommendation to elect Daniel King as an Independent Non-Executive Director and External Director for a three-year term as of June 2024. This election ensures further diversification in the Board's skill set. Mr. King served as an Independent Non-Executive Director and External Director of the Company since its IPO in June 2013 and, having fulfilled his third (and last) three-year term, stepped down from the Board in June 2022. By June 2024 he will have completed a two-year cooling off period and can therefore be considered to be an Independent Non-Executive Director and External Director once again. Having previously served on the Board of the Company for nine years, Mr. King is familiar with the Company's business and values. We look forward to Mr. King rejoining the Board and wish him continued success in his role. I look forward to reporting on the Nomination Committee's further progress in next year's Annual Report. Steve Baldwin Chair of the Nomination Committee 29 March 2024 # Committee composition The Nomination Committee comprises Steve Baldwin as Chair, and Prof. Jacob A. Frenkel. The Code recommends that a majority of the members of a Nomination Committee should be Independent Non-Executive Directors. The Board considers Steve Baldwin and Prof. Jacob Frenkel to be independent for the purposes of the Code. Details of the skills and experience of the Nomination Committee members are set out on pages 58 to 61 of this Annual Report. Plus500 Ltd. 2023 Annual Report | 70 --- Strategic Report | Governance | Financial Statements ## NOTE 7 – OPERATING EXPENSES The presentation below reflects the breakdown of operating expenses by nature of expense: | US DOLLARS IN MILLIONS | YEAR ENDED 31 DECEMBER | | | --- | --- | --- | | | 2023 | 2022 | | Advertising, marketing and commissions to media buying | **99.3** | 122.0 | | Employee benefit and other related expenses | **94.3** | 80.9 | | IT and technology costs | **59.3** | 50.4 | | Payment processing costs | **40.0** | 44.9 | | Professional and regulatory fees | **21.7** | 23.0 | | Depreciation and amortisation | **4.1** | 3.4 | | Commissions and fees | **31.2** | 17.0 | | Other | **39.9** | 40.6 | | | **389.8** | 382.2 | In the years ended 31 December 2023 and 2022, IT and technology costs together with additional allocated other technological related costs were $77.1 million and $74.4 million, respectively. ## NOTE 8 – AUDITORS’ REMUNERATION | US DOLLARS IN MILLIONS | YEAR ENDED 31 DECEMBER | | | --- | --- | --- | | | 2023 | 2022 | | Audit of Plus500 Ltd.’s consolidated financial statements | **0.3** | 0.3 | | Audit of Plus500 Ltd.’s subsidiaries | **0.6** | 0.3 | | **Total audit fees** | **0.9** | 0.6 | | Other assurance related services | **0.2** | 0.3 | | Tax compliance services | **0.1** | 0.5 | | **Total non-audit fees** | **0.3** | 0.8 | | **Total fees** | **1.2** | 1.4 | ## NOTE 9 – SHARE BASED COMPENSATION ### a. Cash settled share based compensation programmes The Group grants Share Appreciation Rights to selected employees. The rights are settled in cash at the end of the vesting period for those who remain employed by the Group. #### Cash settled share based compensation expenses | US DOLLARS IN MILLIONS | YEAR ENDED 31 DECEMBER | | | --- | --- | --- | | | 2023 | 2022 | | Selling and marketing expenses | **0.3** | 3.2 | | Administrative and general expenses | **2.4** | 8.7 | | | **2.7** | 11.9 | Plus500 Ltd. 2023 Annual Report | 123 --- Strategic Report | Governance | Financial Statements ## NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED ### NOTE 9 – SHARE BASED COMPENSATION CONTINUED #### b. Equity settled share based compensation programmes The Group grants long-term incentive plans (“LTIPs”) to selected employees and service contractors (the “LTIP Grants”). In addition, the Group grants Restricted Stock Units (“RSUs”) to selected employees located in Israel (the “RSUs Grants”). The Group also grants an annual bonus settled in ordinary shares of the Company and in respect of certain projects, bonuses with a partial deferred element settled in ordinary shares of the Company to selected service contractors and employees. Each RSU represents the right to receive one ordinary share, par value of NIS 0.01 per share, subject to the terms and conditions of the grant as approved by the Board of Directors and in accordance with the provisions of the Capital Gain route under section 102 of the Israeli Tax Ordinance and regulations (the “102 Capital Gain route”). In respect of the RSUs granted, the employees are entitled to the ordinary shares upon completing the service period. Part of the RSUs granted include also KPIs with market and performance conditions. During 2023 and 2022, the Group recognised $23.0 million and $9.5 million, respectively, as expenses in respect of the equity share based compensation plans in the consolidated statement of comprehensive income with an increase in equity of $13.0 million and $7.5 million, respectively. As at 31 December 2023 and 2022, retained earnings included an amount of $8.9 million and $5.8 million, respectively, in respect of the equity share based compensation plans. The LTIP Grants are subject to service conditions and additional Key Performance Indicators (“KPIs”) measurements, including market and performance conditions. The allotted ordinary shares will be issued out of the treasury shares of the Company. In respect of RSUs, on the vesting date, the shares will be transferred to a trustee by the Company. The ordinary shares allotted on the vesting date, which are subject to a lock-up period, shall be subject to a two-year lock-up beginning on the vesting date. The fair value at grant date of the LTIP and RSU Grants is measured according to the value of the grant amount and expensed over the vesting period with a corresponding increase in equity, taking into account the best available estimate of the number of shares or RSUs expected to vest under the service and performance conditions. Additionally, employees and service providers are entitled to the deferred bonuses and annual bonuses, both settled in shares, upon completing a service period of one year and subject to achieving additional KPIs. The fair value at grant date of the bonuses settled in shares grants is measured according to the value of the grant amount on grant date and expensed over the vesting period. The 2020 deferred bonus settled in shares shall be paid in three equal instalments beginning on 31 December of the year after the vesting date, by way of allotment of ordinary shares of the Company. The number of ordinary shares allotted on any deferred payment date shall be calculated based on the ordinary share price on grant date, as adjusted for interest and total shareholder returns. The 2023 and 2022 annual bonuses settled in shares were paid in one instalment on 31 December of the bonus year, by way of allotment of ordinary shares of the Company. The number of ordinary shares allotted at the end of the applicable bonus year, was calculated based on the ordinary share price on grant date, as adjusted for total shareholder returns. Any estimates applicable with the allotted number of equity settled share base compensation plans takes into consideration the most probable value of the shares at the grant date which include the expected value of total shareholder returns during the vesting period. Accordingly, total shareholder returns distributed within the vesting period which affects the final number of ordinary shares to be allotted on the vesting date and be determined according to the share price at the grant date, less the accumulated amount of total shareholder returns paid during the vesting period, shall not be added as an expense in the consolidated statement of comprehensive income. With respect to RSUs, on the vesting date, the employees shall be entitled to a cash payment equal to the total shareholder returns that were payable in each grant vesting period, based on the number of issued shares on the vesting date. As may be applicable, such cash payments shall be added by way of gross-up and be paid in cash to fund the tax liability. On the vesting date the Company shall allot to the employee or service contractor, ordinary shares, subject to the service condition and achieving specific KPIs for each grant. Plus500 Ltd. 2023 Annual Report | 124 --- Strategic Report | Governance | Financial Statements # **b. Equity settled share based compensation programmes continued** The following table specifies the dates of LTIP, RSU and annual bonus settled in shares grants and the number of ordinary shares or units as of each grant date, as granted for employees and service contractors. | GRANT DATE | VESTING DATE | SHARE PRICE (GBP) | NUMBER OF ORDINARY SHARES/RSUs GRANTED ON GRANT DATE | NUMBER OF EMPLOYEES AND SERVICE CONTRACTORS | | --- | --- | --- | --- | --- | | 1 January 2021 | 31 December 2023 | 14.50 | 160,926 | 8 | | 1 January 2021 | 31 December 2023 | 14.50 | 122,496 | 7 | | 2 January 2022 | 31 December 2022 | 12.91 | 63,274 | 2 | | 2 January 2022 | 31 December 2024 | 12.91 | 153,134 | 7 | | 2 January 2022 | 31 December 2024 | 12.91 | 346,999 | 137 | | 2 January 2022 | 31 December 2022 | 12.91 | 84,015 | 130 | | 2 January 2022 | 31 December 2023 | 12.91 | 84,015 | 130 | | 1 July 2022 | 30 June 2023 | 15.96 | 3,702 | 10 | | 1 July 2022 | 30 June 2024 | 15.96 | 3,702 | 10 | | 1 July 2022 | 30 June 2025 | 15.96 | 3,702 | 10 | | 15 February 2023 | 31 December 2023 | 18.56 | 43,890 | 2 | | 15 February 2023 | 31 December 2023 | 18.56 | 88,239 | 195 | | 15 February 2023 | 31 December 2024 | 18.56 | 88,239 | 195 | | 15 February 2023 | 31 December 2025 | 18.56 | 204,610 | 199 | | 15 February 2023 | 31 December 2025 | 14.50 | 168,540 | 2 | | 15 February 2023 | 31 December 2025 | 18.56 | 59,861 | 5 | | 3 July 2023 | 30 June 2024 | 14.74 | 5,353 | 6 | | 3 July 2023 | 30 June 2025 | 14.74 | 5,353 | 6 | | 3 July 2023 | 30 June 2026 | 14.74 | 5,355 | 6 | | 31 December 2023 | 31 December 2024 | 14.67 | 162,918 | 2 | | 31 December 2023 | 31 December 2024 | 14.67 | 122,754 | 206 | | 31 December 2023 | 31 December 2025 | 14.67 | 122,754 | 206 | | 31 December 2023 | 31 December 2026 | 14.67 | 282,727 | 210 | | 31 December 2023 | 31 December 2026 | 14.67 | 316,076 | 7 | In respect of the equity share based compensation plans, during 2023 and 2022 the Company issued 788,673 and 480,143, respectively, of its treasury shares. During 2023 and 2022, 77,892 and 27,706 ordinary shares and RSUs in respect of equity share based compensation plans were forfeited, respectively. Plus500 Ltd. 2023 Annual Report | 125 --- Strategic Report | Governance | Financial Statements # NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED ## NOTE 10 – INCOME TAX EXPENSE ### Law for the Encouragement of Capital Investments, 5719–1959 The Law for the Encouragement of Capital Investments, 5719–1959, generally referred to as the “Investment Law”, provides certain incentives for capital investments in production facilities (or other eligible assets) by “Industrial Enterprises” (as defined under the Investment Law). ### New tax benefits under the 2017 Amendment that became effective on 1 January 2017 (“2017 Amendment”) The 2017 Amendment was enacted as part of the Economic Efficiency Law that was published on 29 December 2016, and is effective as of 1 January 2017. The 2017 Amendment provides new tax benefits, as described below, and is in addition to the other existing tax beneficial programmes under the Investment Law. The 2017 Amendment provides that a technology company satisfying certain conditions will qualify as a Preferred Technological Enterprise (“PTE”) and will thereby enjoy a reduced corporate tax rate of 12% on income that qualifies as Preferred Technology Income, as defined in the Investment Law. Dividends distributed by a PTE, paid out of Preferred Technology Income, are generally subject to withholding tax at source at the rate of 20% or such lower rate as may be provided in an applicable tax treaty. #### a. Company taxation in Israel The full corporate tax rate in Israel for the years 2023 and 2022 is 23%. Under the 2017 Amendment, provided the conditions stipulated therein are met, technological income derived by Preferred Companies from “Preferred Technological Enterprise” (as defined in the 2017 Amendment), would be subject to reduced corporate tax rates of 12%. A Preferred Company distributing dividends from technological income derived from its PTE would generally subject the recipient to a 20% withholding tax (or lower, if so provided under an applicable tax treaty). At the beginning of July 2020, the Company received an approval from the Israeli Innovation Authority (“IIA”) that together with the tax ruling received from the ITA in May 2019, recognises the Company as a PTE for the years 2017, 2018 and 2019. Accordingly, the applicable tax rate for the preferred technological income of a PTE for these years was 12%. The Company is also considered as PTE for the years 2020 and 2021. As a result, the Company’s corporate tax rate for the years 2020 and 2021 was 12%, subject to the Company complying with the conditions of the Law for the Encouragement of Capital Investments. In January 2022, the Company’s status as a PTE, as accredited by the ITA under the tax regime in Israel, has been extended for the years 2022, 2023, 2024, 2025 and 2026, subject to the Company complying with the conditions of the Law for the Encouragement of Capital Investments. Consequently, the Company’s corporate tax rate for each of these years will be reduced from 23% to 12% and the withholding tax rate applicable for dividends will be reduced from 25% to 20%. #### b. Tax assessments The Company is currently subject to a tax audit in relation to 2020–2022 tax years. The assessments of amounts of current and deferred taxes require the Group’s management to take into consideration uncertainties that its tax position will be accepted and of incurring any additional tax expenses. This assessment is based on estimates and assumptions based on interpretation of tax laws and regulations, and the Group’s past experience. It is possible that new information will become known in future periods that will cause the final tax outcome to be different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the period in which such determination is made. Plus500 Ltd. 2023 Annual Report | 126 --- Strategic Report | Governance | Financial Statements # **c. Corporate taxation in subsidiaries** | SUBSIDIARY | PRINCIPAL TAX RATE | | TAX REGULATION | | --- | --- | --- | --- | | | 2023 | 2022 | | | UK | **25%** | 19% | Tax laws in United Kingdom | | CY | **12.5%** | 12.5% | Tax laws in Cyprus | | AU | **30%** | 30% | Tax laws in Australia | Other Group subsidiaries do not have significant taxable income and the overall effect of the income of those subsidiaries on the Group's tax expenses is immaterial. # **d. Deferred income taxes** # **Deferred tax assets:** The deferred income tax assets relate mainly to payroll and related expenses of the share based compensation plans (see Note 9). The deferred tax assets were computed in 2023 and 2022 at a tax rate of 12%. # **Deferred tax liability:** The deferred tax liabilities are related to intangible assets recognised through business combination. # **e. Taxes on income included in the consolidated income statements for the reported years** | US DOLLARS IN MILLIONS | YEAR ENDED 31 DECEMBER | | | --- | --- | --- | | | 2023 | 2022 | | **Current taxes:** | | | | Current taxes in respect of current year's profits | **70.0** | 103.5 | | Tax income in respect of previous years | **(3.6)** | 0.5 | | | **66.4** | 104.0 | | **Deferred income taxes:** | | | | Change of deferred tax assets (see Note 10d) | **(1.6)** | (0.1) | | Taxes on income expenses | **64.8** | 103.9 | Plus500 Ltd. 2023 Annual Report | 127 --- Strategic Report | Governance | Financial Statements # NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED # NOTE 10 – INCOME TAX EXPENSE CONTINUED # f. Reconciliation of the theoretical tax expense Following is a reconciliation of the theoretical tax expense, assuming all income is taxed at the regular corporate tax rate applicable to a company in Israel (see Note 10a) and the actual tax expense: | US DOLLARS IN MILLIONS | YEAR ENDED 31 DECEMBER | | | --- | --- | --- | | | 2023 | 2022 | | Income before taxes on income, as reported in the consolidated income statement | **336.2** | 474.3 | | Theoretical tax expense in respect of this year's income – at 23% | **77.3** | 109.1 | | Less tax benefits arising from preferred technological income in respect of the current year | **(6.1)** | (14.5) | | Decrease in taxes resulting from different tax rates applicable to foreign subsidiaries | **(1.0)** | (2.1) | | Impact of change in tax rates on deferred tax balances and temporary differences | **(0.9)** | (2.3) | | Increase (decrease) in taxes in respect of currency differences and expenses not deductible for tax purposes | **(0.9)** | 13.2 | | Tax income in relation to previous years | **(3.6)** | 0.5 | | Taxes on income for the reported year | **64.8** | 103.9 | # g. Pillar Two – Background The Pillar Two model rules, released on 20 December 2021, are part of the two-pillar solution to address the tax challenges of the digitalisation of the economy that was agreed by 142 member jurisdictions of the OECD/G20 Inclusive Framework on BEPS and endorsed by the G20 Finance Ministers and Leaders in October 2021. The Pillar Two model rules are designed to ensure large multinational enterprises ("MNEs") pay a minimum level of tax on the income arising in each jurisdiction where they operate. Taxpayers in scope (MNEs with global revenue of at least EUR 750 million in at least two years out of the four previous years) calculate their effective tax rate according to the model rules provisions for each jurisdiction where they operate, and should pay top-up tax on the difference between their effective tax rate per jurisdiction and the 15% minimum rate. Any resulting top-up tax will be charged according to the coordinated system of interlocking rules that was introduced in the model rules (Qualified Domestic Minimum Top-Up Tax – QDMTT, Income Inclusion Rule – IIR, Under Tax Payment Rule – UTPR). A de minimis exclusion applies where there is a relatively small amount of revenue and income in a jurisdiction or when several other conditions are met. # The Multinational enterprises top-up tax exposure: Pillar Two legislation has been enacted or substantively enacted in certain jurisdictions in which the Group operates. However, this legislation does not apply to the Group as its consolidated revenue is lower than EUR 750 million. Plus500 Ltd. 2023 Annual Report | 128 --- Strategic Report | Governance | Financial Statements ## NOTE 11 – EARNINGS PER SHARE Earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year. | | YEAR ENDED 31 DECEMBER | | | --- | --- | --- | | | 2023 | 2022 | | Profit attributable to equity holders of the Company (US dollars in millions) | **271.4** | 370.4 | | Weighted average number of ordinary shares in issue*: | | | | Basic | **85,744,552** | 97,311,485 | | Dilutive effect of equity share based compensation | **1,139,574** | 943,047 | | Diluted | **86,884,126** | 98,254,532 | | Basic earnings per share (in US dollars) | **3.17** | 3.81 | | Diluted earnings per share (in US dollars) | **3.12** | 3.77 | *After weighting the effect of Company's share buyback programmes. See Note 12. ## NOTE 12 – COST OF COMPANY'S SHARES HELD BY THE COMPANY The Board approves share buyback programmes. The share buyback programmes are funded from the Company's net cash balances. | YEAR ENDED 31 DECEMBER | NUMBER OF ORDINARY SHARES PURCHASED | AGGREGATE PURCHASE AMOUNT (US $ IN MILLIONS) | AVERAGE PRICE OF SHARES PURCHASED | | --- | --- | --- | --- | | 2022 | 6,943,359 | 138.8 | £16.27 | | 2023 | 14,859,392 | 275.3 | £14.82 | During the years ended 31 December 2023 and 2022, the Company issued 801,703 and 494,308 of its treasury shares, respectively, in accordance with the various share based equity settled compensation grants. During the period starting 1 January 2024 and up to 28 March 2024, as the latest practicable date before the signing date of the consolidated financial statements, the Company purchased an additional 1,483,445 ordinary shares (or 1.29%) in the capital of the Company for an aggregate purchase amount of $33.3 million pursuant to these share buyback programmes. The ordinary shares were bought back at an average price of £17.66. ## NOTE 13 – DIVIDEND The amounts of dividends and the amounts of dividends per share for the years 2023 and 2022 declared and distributed by the Company's Board are as follows: | EX-DATE | AMOUNT OF DIVIDEND (US $ IN MILLIONS)* | AMOUNT OF DIVIDEND PER SHARE (US $) | DATE OF PAYMENT TO SHAREHOLDERS | | --- | --- | --- | --- | | 24 February 2022 | 59.9 | 0.5995 | 11 July 2022 | | 25 August 2022 | 60.0 | 0.6238 | 11 November 2022 | | 23 February 2023 | 29.9 | 0.3234 | 11 July 2023 | | 24 August 2023 | 59.9 | 0.7344 | 9 November 2023 | On 20 February 2024, the Company declared a final dividend and a special dividend in the amounts of $31.0 million and $44.0 million, respectively (see Note 28). * Between the dividend announcement date and the record date of the dividend, the number of issued and outstanding ordinary shares of the Company decreased as a result of the repurchase by the Company of ordinary shares during such period and the classification of such repurchased ordinary shares as treasury shares that are not entitled to dividends. However, this did not affect the dividend per share as announced on the dividend announcement date. Plus500 Ltd. 2023 Annual Report | 129 --- Strategic Report | Governance | Financial Statements # NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED # NOTE 14 – OTHER RECEIVABLES AND OTHERS | US DOLLARS IN MILLIONS | AS OF 31 DECEMBER | | | --- | --- | --- | | | 2023 | 2022 | | Securities at fair value | **2.8** | 6.0 | | Prepaid expenses | **2.3** | 7.7 | | Other | **19.3** | 13.2 | | | **24.4** | 26.9 | All the financial assets included among other receivables and others are for relatively short periods. Therefore, their fair values approximate or are similar to their carrying amounts. # NOTE 15 – PROPERTY, PLANT AND EQUIPMENT Composition of assets, grouped by major classifications and changes therein in 2023 is as follows: | US DOLLARS IN MILLIONS | COMPUTERS, OFFICE EQUIPMENT AND OTHERS | LEASEHOLD IMPROVEMENTS | TOTAL | | --- | --- | --- | --- | | **Cost** | | | | | Balance at beginning of year | 3.4 | 4.3 | 7.7 | | Additions | 0.9 | 7.3 | 8.2 | | Balance at end of year | 4.3 | 11.6 | 15.9 | | **Accumulated depreciation** | | | | | Balance at beginning of year | 2.4 | 2.7 | 5.1 | | Additions | 0.3 | 0.8 | 1.1 | | Balance at end of year | 2.7 | 3.5 | 6.2 | | **Depreciated balance as of 31 December 2023** | 1.6 | 8.1 | 9.7 | | **Depreciated balance as of 31 December 2022** | 1.0 | 1.6 | 2.6 | # NOTE 16 – CASH AND CASH EQUIVALENTS Cash and cash equivalents by currency of denomination: | US DOLLARS IN MILLIONS | AS OF 31 DECEMBER | | | --- | --- | --- | | | 2023 | 2022 | | USD | **810.4** | 771.4 | | EUR | **46.7** | 58.3 | | GBP | **8.7** | 36.5 | | AUD | **4.7** | 4.5 | | NIS | **22.1** | 27.9 | | Other | **14.1** | 31.6 | | Own cash and cash equivalents | **906.7** | 930.2 | Plus500 Ltd. 2023 Annual Report | 130 --- Strategic Report | Governance | Financial Statements ## NOTE 17 – OTHER PAYABLES | US DOLLARS IN MILLIONS | AS OF 31 DECEMBER | | | --- | --- | --- | | | 2023 | 2022 | | Payroll and related expenses | **34.9** | 36.2 | | Other | **55.8** | 36.0 | | | **90.7** | 72.2 | The financial liabilities included among other payables are for relatively short periods. Therefore, their fair values approximate or are similar to their carrying amounts. ## NOTE 18 – SERVICE SUPPLIERS Service suppliers are comprised mainly of amounts due to advertising service suppliers, their fair values approximate or are similar to their carrying amounts. ## NOTE 19 – TRADE PAYABLES – DUE TO CLIENTS | US DOLLARS IN MILLIONS | AS OF 31 DECEMBER | | | --- | --- | --- | | | 2023 | 2022 | | Customers' deposits, net* | **279.8** | 282.8 | | Segregated client funds | **(249.6)** | (272.4) | | | **30.2** | 10.4 | | ***Customers deposits, net, are comprised of the following:** | | | | Customers' deposits | **409.4** | 411.5 | | Less – financial derivative open positions: | | | | Gross amount of assets | **(148.4)** | (139.0) | | Gross amount of liabilities | **18.8** | 10.3 | | | **279.8** | 282.8 | \* The total amount of "Trade payables – due to clients' includes bonuses to clients. Plus500 Ltd. 2023 Annual Report | 131 --- Strategic Report | Governance | Financial Statements # NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED # NOTE 20 – LEASES The Group has real estate lease agreements. a) Rights of use assets: | REAL ESTATE LEASES | US DOLLARS IN MILLIONS | | | --- | --- | --- | | | 2023 | 2022 | | **At 1 January** | **5.6** | 5.6 | | Additions | **14.1** | 2.0 | | Amortisation | **(2.6)** | (2.0) | | **At 31 December** | **17.1** | 5.6 | b) Lease liabilities: | REAL ESTATE LEASES | US DOLLARS IN MILLIONS | | | --- | --- | --- | | | 2023 | 2022 | | **At 1 January** | **5.6** | 6.2 | | Additions | **14.1** | 2.0 | | Interest expense | **0.7** | 0.1 | | Lease payments | **(2.7)** | (2.3) | | Exchange differences | **0.7** | (0.4) | | **At 31 December** | **18.4** | 5.6 | # NOTE 21 – COMMITMENTS a. The Company and Club BSC Young Boys Betriebs AG ("BSC Young Boys") entered into a sponsorship agreement on 2 June 2020 under which the Company is entitled to advertise and promote itself as the main sponsor of BSC Young Boys for the 2020/21, 2021/22 and 2022/23 seasons. The Company and BSC Young Boys agreed to extend the agreement term until 30 June 2025. b. The Company and Club Legia Warszawa S.A ("Legia") entered into a sponsorship agreement on 9 August 2020 under which the Company is entitled to advertise and promote itself as the main sponsor of Legia for the 2020/21, 2021/22 and 2022/23 seasons. The Company and Legia agreed to extend the agreement term until 30 June 2025. c. The Company and the NBA's Chicago Bulls entered into a multi-year sponsorship agreement on October 2022 to become an official global partner of the Chicago Bulls under which the Company is entitled to advertise and promote itself. # NOTE 22 – SHARE CAPITAL Composed of ordinary shares of NIS 0.01 par value, as follows: | | NUMBER OF ORDINARY SHARES AS AT 31 DECEMBER | | | --- | --- | --- | | | 2023 | 2022 | | Authorised | **300,000,000** | 300,000,000 | | Issued and fully paid | **114,888,377** | 114,888,377 | | Less treasury shares* | **(35,170,337)** | (21,112,648) | | Outstanding shares | **79,718,040** | 93,775,729 | * Number of accumulated ordinary shares that were purchased by the Company as part of the share buyback programmes, less issue of treasury shares. Plus500 Ltd. 2023 Annual Report | 132 --- Strategic Report | Governance | Financial Statements ## NOTE 23 – GOODWILL AND OTHER INTANGIBLE ASSETS, NET Goodwill and other intangible assets, net are related to business combination transactions completed in previous years and comprises Regulatory licences, Goodwill, Technology and Customer relationships, net. As at 31 December 2023, Goodwill and other intangible assets, net, comprises of Regulatory licences of $28.6 million, Goodwill of $8.6 million and Technology and Customer relationships, net, of $1.1 million (31 December 2022: Regulatory licences of $28.6 million, Goodwill of $8.6 million and Technology and Customer relationships, net, of $1.5 million). The recoverable amount of a cash generating unit is based on the calculation of the value in use. As part of these calculations, the Company used the pre-tax expected cash flows based on the USA business combination cash generating unit’s past results, its budget for the next year and the forecast for the following years. The recoverable amount of the cash generating unit was calculated by an external party and reviewed by Company’s management. The valuation as of 31 December 2023 and 2022, used a pre-tax discount rate of 16.5% and 20.5%, respectively and a terminal growth rate of 2%. As at 31 December 2023 and 2022, the recoverable amounts of the cash generating unit are higher than their carrying amounts, and it was not required to record impairment. ## NOTE 24 – BUSINESS COMBINATION ### Japan business combination On 21 March 2022, the Company completed the acquisition of 100% of the issued and outstanding share capital of Plus500JP Securities Ltd (formerly: EZ Invest Securities, Co., Ltd), a licensed Type 1 Financial Instruments Business Operator, regulated by the Financial Services Agency (FSA) in Japan. The acquisition consideration was funded from the Company’s existing cash balances and was paid on completion. Net assets acquired were $4.8 million and comprised mainly of intangible assets of $4.4 million. ## NOTE 25 – RELATED PARTIES AND KEY MANAGEMENT ### a. Key management personnel definition: The Directors and other members of management are classified as Persons Discharging Management Responsibility (“PDMR”) in accordance with IAS 24 and the Market Abuse Regulation. The Directors’ Remuneration Report discusses all the benefits and share based compensation earned during the year and the preceding year by the Directors. ### b. Company’s liabilities in respect of related parties and key management services (part of other payable): | US DOLLARS IN MILLIONS | AS AT 31 DECEMBER | | | --- | --- | --- | | | 2023 | 2022 | | Related party and key management liabilities | **8.0** | 14.2 | ### c. Expenses to related parties and key management: | US DOLLARS IN MILLIONS | YEAR ENDED 31 DECEMBER | | | --- | --- | --- | | | 2023 | 2022 | | Payroll and related expenses and service fees (selling and marketing expenses) | **6.5** | 6.7 | | Payroll and related expenses and service fees (administrative and general expenses) | **16.1** | 14.7 | | Non-Executive Directors’ fees (administrative and general expenses) | **1.4** | 1.4 | The average number of key management personnel during FY 2023 was 21 (FY 2022: 20). Plus500 Ltd. 2023 Annual Report | 133 --- Strategic Report | Governance | Financial Statements # NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED ## NOTE 26 – FINANCIAL RISK MANAGEMENT The Group operates in the fields of OTC and share dealing, as well as futures and options on futures. In the field of OTC, the Group engages only with individual clients and offers OTC referenced to shares, indices, commodities, options, ETFs, cryptocurrencies and foreign exchange pairs. In the field of share dealing, the Group engages only with individual clients and offers a wide range of financial instruments comprised of the world's most popular equities, listed on major exchanges worldwide. In the field of futures and options on futures, the Group engages through its subsidiary in the US which is an FCM that clears and executes futures contracts and options on futures contracts for both B2B (Institutional) and B2C (Retail) customers. The Group's activities expose it to a variety of financial risks: market risk (including currency risk and price risk), credit risk and liquidity risk. The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance. ### a. Market risk Market risk is the risk that changes in market prices will affect the Group's income or the value of its holdings of financial instruments. This risk can be divided into market price risk and foreign currency risk, as described below. The Group's market risk is managed on a Group-wide basis and exposure to market risk at any point in time depends primarily on short-term market conditions and the levels of client activity. The Group utilises market position limits for operational efficiency. Not all net OTC client exposures are hedged and the Group may have a substantial net OTC position in any of the financial markets in which it offers products. The Group implemented targeted hedging, with a view to reducing market risk. This focused approach is deployed in certain circumstances, as and when appropriate. The Group's OTC market risk policy incorporates a methodology for setting market position limits, consistent with the Group risk appetite, for each financial instrument in which the Group OTC clients can trade. These limits are determined based on the Group OTC clients' trading levels, volatilities and the market liquidity of the underlying financial product or asset class. The limits represent the maximum long and short client exposure that the Group will hold without hedging the net OTC client exposure. The Group's real-time OTC market position monitoring system is intended to allow it to continually monitor its OTC market exposure against these limits. If exposures exceed these limits, the Group either hedges or new OTC client positions are being offered in a smaller size and partially could be rejected under the Group's policy. It is the approach of the Group to observe during the year the "natural" hedge arising from the Group's global OTC clients in order to reduce the Group's net market exposure. The Group's exposure to market risk at any point in time depends primarily on short-term market conditions and client activities during the trading day. The exposure at each statement of financial position date may therefore not be representative of the market risk exposure faced by the Group over the year. The Group's exposure to market risk is determined by the exposure limits described above which change from time to time. ### 1. Market price risk This is the risk that the fair value of a financial instrument fluctuates as a result of changes in market prices other than due to the effect of transactional foreign currency exposures risk. The Group has market price risk as a result of its OTC trading activities on shares, indices, commodities, options, ETFs, cryptocurrencies and foreign exchange pairs, part of which is naturally hedged as part of the overall market risk management. The exposure is monitored on a Group-wide basis. OTC exposure limits are set by the risk department and management for each financial instrument, and also for groups of financial instruments where it is considered that their price movements are likely to be positively correlated. The exposures are reviewed by the Regulatory & Risk Committee. Daily profit on OTC closed positions: | US DOLLARS IN MILLIONS | 2023 | 2022 | | --- | --- | --- | | Highest profit | 19.3 | 32.7 | | Highest loss | (3.6) | (9.8) | | Average | 1.7 | 2.1 | Plus500 Ltd. 2023 Annual Report | 134 --- Strategic Report | Governance | Financial Statements #### a. Market risk continued ##### 2. Foreign currency risk Transactional foreign currency exposures represent financial assets or liabilities denominated in currencies other than the functional currency of the Group. Transaction exposures arise in the normal course of business. Foreign currency risk is managed on a Group-wide basis, while the Group exposure to foreign currency risk is not considered by the Board to be significant. The Group monitors transactional foreign currency risks, including currency statement of financial position exposures, equity, commodity, interest and other positions denominated in foreign currencies and trades on foreign currencies. If the US dollar had strengthened by 3% as at 31 December 2023, in respect of balances denominated in other currencies, with all other variables unchanged, the exposure on income after taxes in respect of those balances would be a gain (loss) of $0.4 million in respect of EUR, $0.3 million in respect of AUD, $0.3 million in respect of GBP and $0.7 million in respect of NIS. The exposure in respect of balances denominated in other currencies is immaterial. ##### b. Credit risk The Group operates a real-time mark-to-market OTC trading platform with customers' profits and losses being credited and debited automatically to their accounts. Under the Group's policy, OTC customers cannot owe the Group funds when losing more than they have in their accounts, all OTC customer accounts are pre-funded. **OTC Client credit risk** – Client credit risk principally arises when a customer's total funds deposited (margin and free equity) are insufficient to cover any trading losses incurred. In particular, customer credit risk can arise where there are significant, sudden movements in the market (e.g. due to high general market volatility or specific volatility relating to an individual financial instrument in which a customer has an open position). The principal types of OTC customer credit risk exposures are managed by monitoring all customer positions on a real-time basis. If customers' funds are below the required margin level, customers' positions are liquidated (margin call). **Institutional credit risk** – The risk that financial counterparties will not meet their obligation, risking both client and the Group's assets. The carrying amount of the Group's financial assets represents their maximum exposure to credit risk. The Group has no material financial assets that are past due or impaired as at the reporting dates. As at 31 December 2023 and 2022, counterparties holding the Group's cash and cash equivalents, credit cards, client funds and deposits, have credit ratings as follows: | CREDIT RATING* | 2023 | 2022 | | --- | --- | --- | | AAA to A- | 97% | 95% | | BBB+ to B- | 1% | 2% | | Remaining counterparties | 2% | 3% | \* The financial institutions were rated by the same third party. As at 31 December 2023, the amounts held by the remaining counterparties are held in several counterparties worldwide. The balance in each of those counterparties does not exceed 1% (2022: 2%) of total cash and cash equivalents, credit cards, client funds and deposits. The Group's largest credit exposure to any single bank as at 31 December 2023 was $318.6 million or 22% of the exposure to all banks (2022: $370.1 million or 31%). ##### c. Concentration risk Concentration risk is defined as all risk exposures with a loss potential which is large enough to threaten the solvency or the financial position of the Group. In respect of financial risk, such exposures may be caused by credit risk, market risk, liquidity risk or a combination or interaction of those risks. Plus500 Ltd. 2023 Annual Report | 135 --- Strategic Report | Governance | Financial Statements ## NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED ### NOTE 26 – FINANCIAL RISK MANAGEMENT CONTINUED #### d. Liquidity risk Liquidity risk is the risk that the Group will encounter difficulty in meeting obligations arising from its financial liabilities that are settled by delivering cash or other financial assets. Liquidity risk is managed centrally and on a Group-wide basis. The Group's approach to managing liquidity is to ensure it will have sufficient liquidity to meet its financial liabilities when due, under both normal circumstances and stressed conditions. The Group's approach is to ensure that there will be no material liquidity mismatches with regard to liquidity maturity profiles due to the very short-term nature of its financial assets and liabilities. A result of this policy is that short-term liquidity "gaps" can potentially arise in periods of very high client activity or significant increases in global financial market levels. The contractual maturity of the financial liabilities to service suppliers is generally up to two months. #### e. Capital management ##### 1) Plus500UK The UK Subsidiary is regulated by the FCA. The UK Subsidiary manages its capital resources on the basis of regulatory capital requirements under the Investment Firms Prudential Regime (IFPR) and its own assessment of capital required to support all material risks throughout the business. The UK Subsidiary manages its regulatory capital through an Internal Capital Adequacy and Risk Assessment process (known as the ICARA) in accordance with guidelines and rules implemented by the FCA. The assessment is compared to regulatory eligible capital on a daily basis which is monitored by the management. As at 31 December 2023 and 2022, the UK Subsidiary had GBP 51.9 million and GBP 51.7 million, respectively, of eligible capital, which is in excess of its regulatory capital requirement. ##### 2) Plus500CY The CY Subsidiary is regulated by the CySEC. The CY Subsidiary manages its capital resources on the basis of regulatory capital requirements ("Pillar 1') and its own assessment of capital and liquidity required to support all material risks throughout the business ("Pillar 2'). The CY Subsidiary manages its regulatory capital and liquid resources through an Internal Capital Adequacy and Risk Assessment ("ICARA") process in accordance with guidelines and rules implemented by CySEC. The CY Subsidiary monitors on a frequent basis its Pillar 1 capital requirements and ensures that its capital and liquidity position remains always above the minimum regulatory thresholds. As at 31 December 2023 and 2022, the CY Subsidiary held EUR 109.5 million and EUR 107.2 million, respectively, of eligible capital which is in excess of both its regulatory capital requirement (Pillar 1) and the internally measured capital requirement (Pillar 2). As at 26 June 2021, the capital adequacy and overall risk management requirements that applied to the CY Subsidiary under the Capital Requirements Regulation & Directive ("CRR & CRDIV") prudential framework, have been replaced by amended prudential rules. The Internal Capital Adequacy Assessment Process ("ICAAP") were replaced by ICARA. As at 31 December 2023 and 2022, the CY Subsidiary's Pillar 1 Capital Adequacy ratio on a fully-phased-in basis was 418.1% and 195.2%, respectively. In FY 2022, the CY Subsidiary also applied transitional provisions, accordingly its Pillar 1 Capital Adequacy ratio was 253.1%. Moreover, the CY Subsidiary is evaluating its overall risk profile and capital position through its ICARA process, which is performed at least on an annual basis. ##### 3) Plus500AU The AU Subsidiary is regulated by the ASIC, FMA and FSCA. The AU Subsidiary manages its capital resources on the basis of regulatory capital requirements and its own assessment of capital required to support all material risks. The AU Subsidiary manages its capital through its Net Tangible Assets ("NTA") assessment in accordance with rules and guidelines implemented by ASIC and FMA and Capital Liquidity assessment in accordance with rules and guidelines implemented by FSCA. As at 31 December 2023 and 2022, the AU Subsidiary held AUD 47.1 million and AUD 43.8 million, respectively, of eligible capital, which is in excess of its NTA requirements from the ASIC, FMA and FSCA. ##### 4) Plus500SG The SG Subsidiary is regulated by the MAS. The SG Subsidiary manages its capital resources on the basis of regulatory capital requirements and its own assessment of capital required to support all material risks. The SG Subsidiary manages its capital in accordance with rules and guidelines implemented by the MAS. As at 31 December 2023 and 2022, the SG Subsidiary held SGD 8.7 million and SGD 8.6 million, respectively, of eligible capital, which is in excess of its MAS requirements. Plus500 Ltd. 2023 Annual Report | 136 --- Strategic Report | Governance |**Financial Statements** ### e. Capital management continued #### 5) Plus500IL The IL Subsidiary is regulated by the ISA. The IL Subsidiary manages its capital resources on the basis of regulatory capital requirements and its own assessment of capital required to support all material risks. The IL Subsidiary manages its capital in accordance with rules and guidelines implemented by the ISA. As at 31 December 2023 and 2022, the IL Subsidiary held NIS 49.5 million and NIS 35.8 million, respectively, of eligible capital, which is in excess of its ISA requirements. #### 6) Plus500SEY The SEY Subsidiary is regulated by the FSA. The SEY Subsidiary manages its capital resources on the basis of regulatory capital requirements and its own assessment of capital required to support all material risks. The SEY Subsidiary manages its capital in accordance with rules and guidelines implemented by the FSA. As at 31 December 2023 and 2022, the SEY Subsidiary held sufficient levels of eligible capital, which is in excess of its FSA requirements. #### 7) Cunningham Commodities Cunningham Commodities is a Futures Commission Merchant (“FCM”) registered with the CFTC and is a member of the National Futures Association (“NFA”). As at 31 December 2023 and 2022, the Cunningham Commodities Subsidiary had a net capital of USD 112.9 million and USD 86.1 million, respectively, which is in excess of CFTC Regulation 1.17 and the minimum capital requirements of the CME Group Inc. #### 8) Plus500EE The EE Subsidiary is regulated by the EFSA. The EE Subsidiary manages its capital resources on the basis of regulatory capital requirements and its own assessment of capital required to support all material risks. The EE Subsidiary manages its capital in accordance with rules and guidelines implemented by the EFSA. As at 31 December 2023 and 2022, the EE Subsidiary held EUR 5.4 million and EUR 5.4 million, respectively, of eligible capital, which is in excess of its EFSA requirements. #### 9) Plus500JP The JP Subsidiary is regulated by the FSA. The JP Subsidiary manages its capital resources on the basis of regulatory capital requirements and its own assessment of capital required to support all material risks. The JP Subsidiary manages its capital in accordance with rules and guidelines implemented by the FSA. As at 31 December 2023 and 2022, the JP Subsidiary held JPY 616.2 million and JPY 590.5 million, respectively, of eligible capital, which is in excess of its FSA requirements. #### 10) Plus500AE The AE Subsidiary is regulated by the DFSA. The AE Subsidiary manages its capital resources on the basis of regulatory capital requirements and its own assessment of capital required to support all material risks. The AE Subsidiary manages its capital in accordance with rules and guidelines implemented by the DFSA. As at 31 December 2023, the AE Subsidiary held USD 2.5 million of eligible capital, which is in excess of its DFSA requirements. ### f. Other business risks The Group’s business is subject to various laws and regulations in different countries according to its activity and other countries from where the Group operates. Any regulatory actions, tax or legal challenges against the Group for non-compliance with any regulatory or legal requirement could result in significant fines, penalties, or other enforcement actions, increased costs of doing business through adverse judgement or settlement, reputational harm, the diversion of significant amounts of management time and operational resources, and could require changes in compliance requirements or limits on the Group’s ability to expand its product offerings, or otherwise harm or have a material adverse effect on the Group’s business. Plus500 Ltd. 2023 Annual Report | 137