CMC Markets (LSE:CMCX), a brokerage firm dealing with the foreign exchange market (forex) and contracts for difference (CFDs) predicted on Thursday that the changes set to take place in major European Union markets regarding forex may have an effect on how their business and clients operate and behave. CMC Markets relies heavily on the behavior of the major markets of the EU – the UK, Germany, and France, who all have plans to ban the trade and distribution of financial instruments which allow traders to assume a position in the market that offers greater contact with the market without involving additional capital, known more succinctly as the leveraged products.

A representative speaking on behalf of CMC Markets remarked that, because it is too early come up with numbers regarding how these regulatory changes will impact the way their traders behave, they do not know how these regulations will impact their own performance. He also noted that the eventual effects and timings of these regulations could change at any moment.

While CMC Markets will have to make changes in keeping with the constantly changing industry and highly competitive landscape, a representative of the broker said the company is in favor of a regulatory approach that is transparent and consistent. Regulations regarding forex are steadily moving in that direction, and CMC Markets is prepared to move alongside any new regulations. One way CMC Markets and other brokerage firms can maintain profitability is by expanding product offerings that complement the new regulatory environment. CMC Markets plans to add a limited risk trading account to its line of existing account types. A limited risk trading account allows traders to be aware of the maximum loss they can suffer before investing. This amount is usually equal to the amount invested.

In addition to the limited risk accounts, CMC Markets also introduced Knock Out contract for difference accounts in Austria and Germany last October. These two markets did not previously have the option from CMC Markets. These accounts allow an investor speculates on the movement of prices of shares, commodities, currencies, and other fast moving financial markets. Like a limited risk trading account, these Knock Out accounts also feature a limit to how much can be lost by a given investor.

Despite some jurisdictions banning binary trading options, regarding them as gambling and prone to scammers, CMC Markets also introduced binary trading options to its traders in April.

Another brokerage firm, IG Group, a competitor based in the UK, also plans on introducing a limited risk account and other new services.

CMC Markets CEO and founder, Peter Cruddas admits that the regulatory changes will present some challenges as adjustments take place with traders and the industry, but, he said he is confident that the Group’s position in the forex and CFD brokerage market will only grow stronger in the long term. Cruddas believes that their business plan, which focuses more on experienced traders, will win over brokerage firms who focus on less experienced clients, as a result of these regulatory changes

Amid these changes, CMC Market’s revenue per client has fallen, even as the number of active clients grew by double digits preceding the fourth quarter of this fiscal year. Between October and December, there was a 13% annual increase in number of active clients, but the overall revenue per client declined by the same 13% for the same reporting period. Despite this, overall trading activity did manage to improve a bit compared to the previous years, although the exact figures for this growth are so far unknown.

Now in the final quarter of the fiscal year, a representative of CMC Markets told reporters that determining whether or not the recent uptick in activity by their traders will continue is impossible. He did have confidence, however, that their fixed costs of operation would continue to be under control and within their guidance.

CMC Markets is licensed by the UK’s Financial Conduct Authority (FCA), an independent regulator funded by fees charged to members of the financial service industry. When first listed on the London Stock Exchange (LSE) in February of last year, it raised around £218 million. The company is currently valued between £750 million and £1.2 billion. With offices in 14 countries, CMC Markets serves both retail and institutional clients, focusing on markets in the Australia, Germany, Singapore, and the UK.