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United States securities and exchange commission logo
January 2, 2024
Nick Jones
Head of Legal
Marex Group plc
155 Bishopsgate
London EC2M 3TQ
United Kingdom
Re: Marex Group plc
Draft Registration
Statement on Form F-1
Submitted December
6, 2023
CIK No. 0001997464
Dear Nick Jones:
We have reviewed your
registration statement and have the following comments.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe a comment applies to your
facts and circumstances
or do not believe an amendment is appropriate, please tell us why in
your response.
After reviewing any amendment to your registration statement and
the information you
provide in response to this letter, we may have additional comments.
Draft Registration Statement on Form F-1
Our Company, page 1
1. We note that you
explain your growth strategy as focusing on increasing the "share of
wallet" of your
clients. Consider revising your disclosure early in the summary to discuss
your focus on deepening
client relationships. Your revised disclosure should then discuss
whether management
monitors client wallet share, and the effectiveness of your cross-
selling efforts, either
in the business section or management's discussion and analysis, as
appropriate.
Our Market Opportunity, page 6
2. We note your comparison
of your service offerings and those of your key competitors.
Please describe how you
defined or identified your key competitors.
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Our Competitive Strengths, page 10
3. We note your reference to "essential services" in this section, and in
the section beginning
on page 14. Revise your explanation to explain which of your main
product or asset
classed consist of "essential services."
Growth from Expansion of Client Footprint, page 13
4. We note the graphic on page 14 that shows two "client case studies."
Please provide us an
explanation of how you identified the clients you are highlighting in
the case studies and
whether the results of the highlighted clients are representative of
your clients during the
same time periods presented. Consider revised disclosure as necessary
to ensure the
presentation is balanced and accurately places the information in
context for your
investors.
Pursue Strategic Acquisitions, page 17
5. We note your disclosure that you invest substantial time and resources
post-closing. If
applicable, please disclose where appropriate if these substantial
post-closing investments
materially affect your liquidity. Depending on your response, consider
providing
expanded discussion of your post-acquisition efforts in your business
section on page 132,
or in your liquidity and capital resources section.
Our business is adversely affected by subdued commodity market activity , page
29
6. Please discuss the current commodity market environment in which you
are currently
operating and whether you are experiencing adverse effects on your
business due to the
current environment.
We are subject to a variety of regulatory, reputational and financial risks as
a result of our
international operations, page 33
7. Please disclose whether you believe you are currently in compliance
with the regulatory
requirements you discuss in this risk factor. Also, revise this
section to discuss, for each
type of regulation, whether you have been subject to significant
sanctions, including fines,
enhanced monitoring, or conduct restrictions, during the last 5 years.
Software or systems failure, loss or disruption of data or data security
failures could, among
other things, limit our ability, page 35
8. Please tell us how you concluded that the data security attacks on you
or your third-party
providers were not material to your business.
We are subject to exposure to cryptocurrencies and potential losses and
reputational impact from
clients trading crypto, page 37
9. We note your disclosure on page 37 related to legal proceedings with
BlockFi Inc. Please
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address the following:
Please revise to quantify the amount of financial loss you have
experienced related to
the instruments that are the subject of these legal proceedings.
Please quantify the amount of the "disputed assets" held by
MCMI at each balance
sheet date.
Please tell us your basis for concluding that the impact of
legal proceedings will not
have a material impact on your business. In addition, please tell
us a range or estimate
above any amounts accrued.
10. Please describe your existing cryptocurrency holdings, your material
exposure to such
holdings, and where your structured notes and OTC derivatives linked
to the performance
of cryptocurrency were sold. If the structured notes and OTC
derivatives were sold in the
United States, please provide the exemption under which they were
sold.
11. In your Regulation section starting on page 150, please disclose the
effect of existing or
probable government regulation to the extent federal, state, local or
foreign regulation of
blockchain technology or digital assets may have a material effect on
your business or
intended business.
We are subject to risks related to OTC derivatives transactions..., page 37
12. We note your reference to bespoke or off-exchange hedging products
which you provide
to your customers. Please revise, here or where appropriate, to
discuss the associated risks
to your business from providing these offerings. Highlight the primary
differences
between your bespoke hedging products and OTC derivatives and quantify
your exposure
between both OTC and bespoke derivatives for the periods presented
within your financial
statements.
13. Please identify each of the digital assets to which the structured
notes and OTC
derivatives you offer are linked.
Our risk management policies and procedures may leave us exposed to
unidentified or
unanticipated risk, page 47
14. We note your disclosure on page 113 that your VaR framework continues
to be developed
across your various trading desks. Revise this risk factor to discuss
the need to expand
your monitoring and calculation of your overall VaR exposure. Also,
revise the risk factor
to discuss the extent to which your lack of an mature VaR framework
might impact the
probability that you might be exposed to an unidentified or
unanticipated risk.
Volatility in Commodity Prices and General Economic Activity Levels, page 88
15. We note your disclosure that trading volumes may be reduced if
geopolitical
developments impact production or the availability of a relevant
commodity for an
extended period. You also cite to specific events that have impacted
the trading volume of
specific commodities. Revise your disclosure to discuss the extent to
which the cited
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January 2, 2024
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events specifically impacted your business volume or revenues or other
material impacts
on your business.
16. If applicable, please describe the extent and nature of the role of
your board of directors in
overseeing risks related to Russia's invasion of Ukraine. This could
include risks related to
cybersecurity, sanctions, and commodity prices in affected regions.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Results of Operations, page 97
17. Please revise, here or where appropriate, to quantify and discuss the
results, trends and
circumstances from your cryptocurrency specific activities. For
example, quantify the
volume of activities, nature, type of cryptocurrencies, average
pricing or rate information,
etc. Refer to Item 303(b)(2) of Regulation S-K.
18. Please revise your disclosure to describe the extent to which the
changes in your Net
Commission Income and Net Trading Income are attributed to changes in
price or changes
in volume for each of the periods presented and discussed.
Non-IFRS Measures, page 100
19. Please revise to explain in further detail how you calculate your
Sharpe Ratio and
Adjusted Sharpe Ratio and clarify what these amounts represent. For
example, please
disclose the primary drivers behind the change in your Sharpe Ratio
from 1.8 in 2021 to
2.8 in 2022 and the change in your Adjusted Sharpe Ratio from 2.2 in
2021 to 4.1 in 2022.
Credit Facilities, page 109
20. For each credit facility listed in this section, please include the
interest rate payable.
Quantitative and Qualitative Disclosures of Market Risks, page 111
21. Please revise to provide all quantitative information about market
risk as required in Item
11 of Form 20-F. Specifically, please enhance your disclosure to
provide more detail
regarding the separate stress-based frameworks and suites of risk
sensitivity limits. In
addition, please discuss your Board of Directors current risk
appetite.
Interest Rate Risk, page 114
22. Revise this section to discuss why you decided that 100bp
increase/decrease in interest
rates was adequate to provide your management, and investors, with
information on your
FirstName LastNameNick Jones
exposure to changes in interest rates. We note that interest rates in
the UK have risen by
Comapany
almostNameMarex Group
500bps since the plc
end of 2021, and in the US have risen by about
the same amount
Januaryin2,the same
2024 24 4month period.
Page
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23. We note that you state that you could not model client response to
interest rate changes
due to the "recent historically low interest rate environment." Revise
to clarify if
management remains unable to model or anticipate client responses to
rate changes based
on the inputs from 2022 and 2023.
Market Risk, page 148
24. Please describe the pre-trade risk controls you have in place.
Governing Law and Waiver of Jury Trial, page 215
25. Please clarify whether the exclusive forum provision applies
specifically to claims under
the Securities Act and/or Exchange Act. In that regard, we note that
Section 27 of the
Exchange Act creates exclusive federal jurisdiction over all suits
brought to enforce any
duty or liability created by the Exchange Act or the rules and
regulations thereunder, and
Section 22 of the Securities Act creates concurrent jurisdiction for
federal and state courts
over all suits brought to enforce any duty or liability created by the
Securities Act or the
rules and regulations thereunder. Please also include risk factor
disclosure discussing the
risks or other impacts on investors of the exclusive forum provision,
as well as any
uncertainty about enforceability and whether they apply to federal
securities law claims.
Net physical commodities income, page F-24
26. We note that you indicate you enter into contracts to purchase
physical commodities for
the purpose of selling in the near future to generate a profit
from the fluctuations in
prices and that your contracts to purchase and sell physical
commodities are
provisionally priced at the date that an initial invoice is
issued. Please address the
following:
Clarify in which line item you record and, where appropriate,
quantify the
outstanding exposure related to, your physical commodities
contracts on your
consolidated statement of financial position.
Clarify what is meant by the phrases in the near future
and provisionally priced
and revise your disclosure accordingly.
Tell us where your physical commodities are recorded within
your fair value
hierarchy as presented on page F-82.
3 Significant Accounting Policies
(n) Financial instruments, page F-29
27. We note your disclosure on page F-33 that states that you have
rebutted the 90-day
presumption within IFRS 9 where a default shall be presumed to have
occurred if a
financial asset is more than 90 days past due. We further note your
disclosure that it is
your accounting policy that when a financial asset is more than 180
days past due, you
believe the number of days past due is sufficient evidence of a
significant deterioration in
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the credit quality of the client in most circumstances. Please
address the following:
Cite the accounting guidance that indicates a 90-day
presumption of default is
assumed.
Explain your basis in determining that the 90-day presumption
has been rebutted.
Please explain under what circumstances you would believe that
180-days past due is
not indicative of a significant deterioration in credit quality.
Explain if you evaluate and determine any significant
deterioration before your
financial assets are 180 days past due based on specific and/or
known information.
28. We note your disclosure on page F-37 that states Hybrid financial
instruments are
composed of debt components and embedded derivatives. To the extent
possible, please
quantify the number and value of embedded derivatives included within
your statements
of financial position as of December 31, 2022 and December 31, 2021,
and tell us how
you considered paragraph 4.3 of IAS 9 when accounting for these
embedded derivatives.
9 Other expenses, page F-47
29. We note that the other component of your other expenses
comprises a significant
portion of your total other expenses for the years ended December 31,
2022 and December
31, 2021. Please provide additional information related to this
other component and
consider whether further break-out of these amounts is possible.
20 Trade and other receivables, page F-61
30. We note that you provide an aging of trade debtors but that trade
receivables only
comprise approximately 3% of your total trade and other receivables as
of December 31,
2022. Please provide an aging for the remainder of your accounts
receivable for each
period presented.
35 Related party transactions, page F-85
31. We note your disclosure that you have paid a management fee of 2.5% of
EBITDA each
year to one of your significant shareholders. Please tell us where
these management fees
are recorded within your consolidated income statements and revise to
disclose the
material terms of this agreement.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
Please contact Shannon Davis at 202-551-6687 or Lory Empie at
202-551-3714 if you
Nick Jones
Marex Group plc
January 2, 2024
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have questions regarding comments on the financial statements and related
matters. Please
contact Madeleine Joy Mateo at 202-551-3465 or Christian Windsor at
202-551-3419 with any
other questions.
FirstName LastNameNick Jones Sincerely,
Comapany NameMarex Group plc
Division of Corporation
Finance
January 2, 2024 Page 7 Office of Finance
FirstName LastName