Exclusive: InterTrader ceases agreement with LCG, prepares to transfer clients to InterTrader Direct

InterTrader has today informed its customers that it is terminating its agreement with British spread betting and CFD company LCG, and will be migrating all existing customers to InterTrader Direct.

According to several industry sources, this had been on the cards for quite some time.

Currently, InterTrader Direct is registered in Gibraltar, and InterTrader is a white label partner of LCG which offers discount brokerage and electronic trading services to a British client base. Both divisions are owned by digital entertainment company bwin.party.

InterTrader and InterTrader Direct will service all clients from the Gibraltar entity in the future, and InterTrader’s service will be terminated.

Interestingly, InterTrader has made absolutely no publicly available announcement that it will be terminating its InterTrader service, and has only informed existing InterTrader clients that it will be migrating them to InterTrader Direct.

This is of particular interest, because one of the major differences between InterTrader and InterTrader Direct is that InterTrader falls under the auspices of the Financial Conduct Authority (FCA) in Britain, therefore offers clients £50,000 in protection should something go awry, whereas once the white label agreement is terminated and all clients are transferred to the Gibraltarian entity, clients would be subject to the terms and conditions provided by the  Gibraltar Financial Services Commission.

FinanceFeeds today spoke to InterTrader in London, and requested a copy of the generic letter that the company sent to clients, however InterTrader declined to provide it, stating that the company only sends this information to clients.

When asked whether InterTrader considers this to be very important information for prospective clients, because they may invest money thinking that there is no imminent change to the firm’s modus operandi, to find that they will be migrated to a different service altogether, provided by a different market maker (InterTrader Direct rather than LCG), and importantly, in a different jurisdiction, the representative explained:

“I would not advise you to open a trading account with InterTrader at this point, and there is no point in investing money because the service is expiring”

The representative was then asked that, on this basis, surely it is important that prospective partners, introducing brokers or customers would be privy to this information, however an evasive line was taken.

It is clear from research by FinanceFeeds that when InterTrader terminates its service, all accounts will be migrated to InterTrader Direct, and new customers will be onboarded directly to InterTrader Direct.

FinanceFeeds contacted Shai Heffetz, Managing Director of InterTrader Limited in writing for a statement on the matter, however no reply was proffered.

Whose clients are they?

A particular moot point that could potentially arise from this is the question mark that hangs over the ownership of the existing clients.

InterTrader’s British division was effectively an introducing broker of LCG, the two companies having entered into a white label partnership agreement in 2010, which means that it introduced clients which are then onboarded by LCG, and have trading services provided by LCG, however InterTrader is now preparing to migrate all clients to InterTrader Direct, and in doing so is implying that the client base is the intellectual property of InterTrader Ltd.

Last year, GVC Holdings PLC turned the tables in a four-month bidding contest to buy bwin.party Digital Entertainment PLC by sealing a £1.12 billion offer to purchase the online gaming company, putting an end to the bidding from 888 Holdings Plc.