IG publishes response to FCA findings of review of the CFD market

Following today’s letter by the UK Financial Conduct Authority (FCA) to providers and distributors of contracts for difference (CFD) products, online trading major IG Group Holdings plc has filed its response to the document.

IG welcomes the FCA’s review on the provision and distribution of CFD products to clients on an advisory or discretionary basis. IG does not offer advisory or discretionary services for CFD products and has terminated its very small number of relationships with distributors who offer our CFD product on a discretionary or advisory basis to retail clients within the UK and EU. IG believes that it complies with the applicable rules and FCA guidance and that this review has no new financial implications for IG’s business.

“The Company is always seeking to improve and we have taken steps to address the observations made by the FCA in their individual letter to IG on this aspect of the industry in October 2017. We believe that stricter supervision of those firms who do not comply will lead to improved client outcomes in the industry”, IG said in its response.

In line with RPPD and MiFID II product governance obligations, IG has carefully defined its target market. This is shared with the few partners with whom IG works, and who distribute its products in accordance with IG’s own high standards.

The Company has delivered a sustainable business by placing good client outcomes at the heart of everything it does. Good conduct, from the way products are designed, to how they are marketed, to whom firms allow to use them, is essential in protecting clients.

The Company’s long held view is that robust supervision around who the product is marketed to, and which applicants are accepted as clients, remains the most significant measure to drive improved client outcomes.