Notes to the financial statements

30. Contingent liabilities

Group

(a) The highly regulated nature of the Group’s business means that from time to time the Group is subject to regulatory enquiries and investigations, particularly in the US. The Group is currently involved in a number of these. Some of these regulatory enquiries and investigations are broad and tend to be interdealer industry wide in nature.

In February 2006, in the US, the SEC issued a formal order of investigation to ICAP Securities USA LLC, a wholly-owned subsidiary of the Group, and other interdealer brokers in government and other fixed income securities. In addition, the SEC has issued several requests for information relating to ICAP Securities USA LLC’s voice mortgage-backed securities desk. The mortgage aspect of the investigation has been in progress since April 2008. ICAP Securities USA LLC continues to co-operate with the enquiry.

Although ICAP Securities USA LLC has not received notice of an intention by the SEC to bring any charges against ICAP Securities USA LLC or its executives, the potential range of penalties generally available to the SEC include, among other things, financial penalties, disgorgement, fines, actions against individuals, and injunctive and other remedial relief. Such matters are inherently subject to many uncertainties and the Group cannot predict their outcomes. However, there are no issues which are currently expected to have a material adverse financial impact on the Group’s results or net assets.

(b) In 2004, the National Australia Bank (NAB) announced that it incurred FX trading losses of AU$360 million. NAB subsequently alleged, in correspondence sent to ICAP plc, that one of the Group’s subsidiaries helped NAB traders mask these losses. The Group does not accept any responsibility for NAB’s losses and has not received any correspondence from NAB since October 2006.

(c) From time to time the Group is engaged in litigation in relation to a variety of matters. It is not possible to quantify the extent of any potential liabilities, but there are none currently expected to have a material adverse financial impact on the Group’s consolidated results or net assets.

(d) In the normal course of business, certain Group companies enter into guarantees and indemnities to cover trading arrangements and/or the use of third-party services or software.

Company

The Company has provided a subordinated guarantee to a subsidiary company in respect of the $193m subordinated loan notes repayable in 2015 which has a fair value of £nil as at 31 March 2009 (2008 – £nil).