IG reiterates cautionary note about future due to regulatory changes

Maria Nikolova

The nature and timing of potential regulatory changes in the UK and some other key markets for the Group remain uncertain, IG said today.

Online trading major IG Group Holdings plc (LON:IGG) today reiterated its cautionary note about the future given the changes to the regulatory environment. In a filing with the London Stock Exchange, IG said the nature and timing of potential regulatory changes in the UK and some other key markets for the Group remain uncertain.

The company stressed that it continues to implement measures to differentiate itself further within the OTC leveraged derivatives industry and to protect the business from regulatory change. “It remains difficult, however, to predict what impact regulatory change may have on the Group this financial year and beyond”, IG said.

The statement is in line with previous comments made by IG. In September this year, IG said that although none of the recently announced regulatory changes had adversely impacted the business to date, the effects of potential regulatory changes on the business is hard to predict.

In June this year, the UK Financial Conduct Authority (FCA) delayed the implementation of the new conduct rules for UK firms that offer CFDs to retail customers. The regulator blamed the delay on the fact that the European Securities and Markets Authority (ESMA) is considering product intervention measures under Article 40 of the Markets in Financial Instruments Regulation (MiFIR). ESMA’s product intervention powers can only come into effect from January 3, 2018 at the earliest.

In July this year, IG outlined a number of main areas where regulators are expressing concern and suggesting the need for remedies. These areas include marketing, bonus offers, etc. IG has not objected to any of the proposals.

With regard to the regulatory changes in Germany, where financial supervisory authority BaFin has introduced new rules for the marketing and offering of CFDs to retail clients, IG Group has noted that it is supportive of the measures outlined by BaFin. The company is set to have no compliance issues with regards to the restrictions on CFDs with additional payments obligation, given that it already actively markets its Limited Risk Account in Germany. This type of account is compliant with the new rules and also provides additional ‘by position’ protection.

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