IG Index stresses Margin Requirements

IG Index circulated the following letter regarding maintenance of margin requirements -:

Please note that it is your responsibility to monitor your account and ensure that your balance, taking into account all realised or unrealised profits and losses, is equal to at least the total deposit and margin that we require you to have paid to us. As from Monday 10 November we shall be introducing a tighter policy with regard to margin payments.

If your account becomes marginable you will have until 3pm the following business day to supply sufficient cleared funds. We may contact you during this time but we are under no obligation to do so. Please be aware that if we do not hear from you or receive payment your positions risk being cut back to cover the margin call, and therefore you may suffer losses greater than the funds on your account. If you are in any doubt as to the action required to keep your bets open we urge you to contact us.

Notwithstanding the above, where we believe it reasonably necessary, for example where your position gets significantly worse, we reserve the right to request immediate payment or close you out immediately (that is, before 3pm on the following business day). We also reserve the right to extend your payment terms.

Essentially, you should monitor your account to cover potential adverse market moves. This can be managed by adding extra funds to your balance or by using Stop Orders to help limit any potential losses on your trading positions.

All the key information regarding your account and your required funds is available on the PureDeal platform. You can also find information on PureDeal about the speed of various payment methods (go to ‘My Account’, then ‘How to Pay Us’), while you can make online payments directly at ‘My Account’, then ‘Make a Payment’.

We may have margined your account differently in the past, for example by allowing longer payment terms. If this is the case, please accept this letter as formal notice that as of 10 November our margining practice will change to the practice set out in this letter.

Thoughts: On a serious note that could be desperate for some traders! Re-reading it, what I don’t like is it seems to be very scatter gun and a law unto each individual. I suspect that if they do not issue such a warning that they may well be unable to go to court for any bad debts. No sensible business wants defaulting, bad paying customers (except sub prime lenders) and the impression from this is that IG have had enough of people gambling without the means to back it up when it goes wrong. Do we really want to find that IG have gone to the wall because they were lax with defaulters?

Tags: ig, IG Index, igindex, spread betting

This entry was posted on Tuesday, November 4th, 2008 at 11:42 pm and is filed under Broker News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.