IG Markets Releases Beginner’s Guide to Client Money Protection

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IG Markets, Australia’s largest CFD provider*, has released a beginner’s guide to client money protection on its website. The guide covers the company’s policies on hedging client positions and holding client funds, and compares these policies to the industry standard.

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At IG Markets we believe that these restrictions should also apply to the Australian market, and we are proud to say that we only use our own money for hedging purposes.

IG Markets, Australia’s largest CFD provider*, has released a beginner’s guide to client money protection on its website. The guide covers the company’s policies on hedging client positions and holding client funds, and compares these policies to the industry standard.

While ASIC requires CFD providers to segregate client funds from company funds, this does not include money that the CFD provider might use for hedging. Consequently, the provider could subsequently withdraw client money from this account for hedging purposes.

Head of IG Markets, Asia Pacific, Tamas Szabo, said, “the practice of hedging with client money is permitted under ASIC rules, provided it is properly disclosed to clients. In contrast, this practice is restricted in other jurisdictions, such as the UK.”

“At IG Markets we believe that these restrictions should also apply to the Australian market, and we are proud to say that we only use our own money for hedging purposes.”

IG Markets keeps all client funds in a separate, regulated trust account at a top-tier Australian bank, and only uses its own funds to hedge in the underlying market.

And, not only does IG Markets segregate all client deposits, it also segregates all client net unrealised profits in a regulated trust account. This exceeds both regulatory and contractual obligations.

Having introduced CFDs to the Australian market in 2002, IG Markets is the longest established CFD provider in Australia, and one of the longest established globally. IG Markets is a part of IG Group, a FTSE 250 company with over 130,000 clients worldwide and a market capitalisation of AUD2.5 billion (November 2011).

IG Markets is regulated by ASIC in Australia, and IG Group companies are regulated by the local regulators in each country of operation.

Mr Szabo commented on IG Markets’ reputation as a secure CFD provider, “when clients choose a company that is a part of a listed group, they have wider access to the financial details of the group and greater confidence that the group employs high levels of corporate governance. IG Markets has large cash reserves and sophisticated risk management systems, making counterparty risk much lower with IG Markets when compared with some other providers.”

About IG Markets
IG Markets specialises in financial derivatives, principally CFD trading on over 7,000 global share CFDs, indices, forex, commodities, options, binaries and more.

IG Markets advises that trading CFDs may not be suitable for everyone, since CFDs are a geared product and can result in losses that exceed an initial deposit, and that product disclosure statements are available from http://www.igmarkets.com.au.

  • 40% of active CFD traders have an account with IG Markets - Investment Trends May 2011 Australia CFD Report.

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Jacqui Pretty
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