IG gets EUR 500,000 fine in France over trade recommendations deficiencies, misleading info about CFDs, binary options

Maria Nikolova

AMF has found numerous law breaches were committed by IG Markets’ French subsidiary between June 2015 and March 2016.

Lack of clear labels about the source of trade recommendations and trade ideas, misleading information about investing in CFDs and binary options, as well as insufficient qualifications of people portrayed as financial analysts – these are some of the reasons for a EUR 500,000 fine being imposed on the French branch of IG Markets Limited.

The French financial markets authority AMF has published a detailed report about the action against the broker.

The investigation’s findings concern the period from June 2015 to March 2016.

On June 22, 2015, the AMF decided to review IG’s compliance with its professional obligations in connection with the activities of its branch in France. The check resulted in a report dated March 8, 2016, communicated to IG on March 14, 2016. The consequential communications between the broker and the regulator have resulted in the decision about sanctions being made on June 25, 2018.

IG’s French business has been accused of:

  • dissemination of investment recommendations that do not label clearly the identity of the entity that is the source of this recommendations.

  • communication of inexact and misleading information about investment in CFDs and binary options;

  • omissions of important questions when determining the level of expertise of potential clients;

  • insufficient diligence when co-operating with the AMF in its investigation.

In particular, IG is criticized for not announcing clearly that the trade recommendations it made on its YouTube channel, its website and Twitter in the relevant period were provided by an external source. Out of 20 such videos, only two informed the viewers of the source of the recommendations.

Furthermore, out of the 20 recommendations about investments published by IG on its website, 18 included photos of employees of the broker labeling them as “IG Analyst, Paris”. But none of these people had the function of a financial analyst nor did they have the necessary qualifications to exercise this profession.

The CFD and binary options information (the latter claims concern the so-called “sprint markets” offering) was also misleading and incomplete, the AMF has found, especially with regard to the wording about the return on investment.

A number of omissions were detected in the questionnaire for clients. The list of questions did not check adequately the level of expertise of traders.

FinanceFeeds spoke this morning to Bridget Messer, Chief Commercial Officer at IG Group, who explained:

“During an audit covering 2014-15, the AMF identified some isolated issues in relation to procedures of our French branch. There is no evidence that the issues identified by AMF caused poor consumer outcomes. As the AMF acknowledged, IG took active and swift steps to address the areas of concern.”

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