IG says 15 clients have filed Swiss franc cases with UK ombudsman
Around 15 IG Group clients have filed cases with Britain’s Financial Ombudsman over losses incurred during a surge in the value of Swiss Franc in January, the online trading platform’s interim chief executive told Reuters on Tuesday.
IG has been accused by a group of clients of breaching British rules by trading in its own interest several minutes before acting on their behalf after Swiss authorities removed a de facto peg of the franc to the euro — allegations the company denies.
Fewer than 80 clients out of 341 still have debts outstanding or are in dispute with IG, said Peter Hetherington, who expected cases to be resolved by the ombudsman by June next year.
“I’d be surprised if by Christmas we didn’t have an opinion from the adjudicator (on the first case),” said Hetherington, adding the decision would set an implicit precedent for the rest of the cases as the legal arguments were broadly the same.
IG says it is owed around 15 million pounds ($23 million) by these clients and has set aside money to cover this amount in case it is not repaid, added Kieran McKinney, director of investor relations.
The officials were speaking at the company’s Dubai office, its 17th location and likely its last new one for a while, according to Hetherington.
“For a while, IG has been about opening in new places and I think that road is nearly run,” he said, adding it would be interested in Brazil and China if regulatory regimes improved.
With two-thirds of its locations in Europe and 20 percent of its revenue coming from continental Europe, Hetherington said he was “somewhat worried about the possibility” of Britain leaving the European Union.
“Clearly if Britain were to leave, it wouldn’t be that taxing to get one of our other branches turned into a proper home. And the obvious ones would be Germany or France,” he said, referring to the Markets in Financial Instruments Directive (MiFID) which allows finance firms based in one EU country to operate in others under their home regulation.
“But you have to ask what would the attitude of the remaining EU be to products like ours if the UK were to leave.”
On the products side, IG continued to roll out its stock broking option and hoped to have a platform to allow clients to build their own exchange-traded funds during 2016, according to Hetherington.
Being able to combine this with active stock trading and its existing leveraged product suite offered “a compelling vision (which) allows us to have a more long-term sustainable business”, said Hetherington, who has declared his desire to permanently replace outgoing CEO Tim Howkins.
Source: Reuters – IG says 15 clients have filed Swiss franc cases with UK ombudsman
