CONTRACTS FOR DIFFERENCES
This Information Memorandum contains information about the Contracts for Differences (CFDs)
offered by CFDnet. Before deciding whether to trade with CFDnet, you should consider the
contents of this Information Memorandum and whether dealing in CFDs, which are speculative
investments, is a suitable investment for you. With regard to the risks involved in entering into
CFDs, we refer you to sections 1m and 6.
This Information Memorandum does not take into account your personal circumstances and you
should obtain independent advice if you are unsure as to whether CFDs are the right investment
for you. You should not construe the contents of this Information Memorandum as legal or tax
This Information Memorandum contains examples that attempt to demonstrate how CFDnet'
products work. The examples are provided for illustrative purposes only. Such references are not
to be construed as an express or implied endorsement of a security or other such investment.
In addition to this Information Memorandum, you should also obtain and read the Customer
Agreement, the Risk Disclosure Notice and the Contract Details, which contain technical
information on the market details for our CFDs, the associated costs for the products and any
amounts that we may require you to pay or amounts that we will pay you in respect of your account
This Information Memorandum does not constitute an offer to sell or the solicitation of an offer to
buy any securities other than pursuant to this Information Memorandum, nor does it constitute an
offer to sell or the solicitation of an offer to buy any securities in any jurisdiction or to any person in
which or to whom it is unlawful to make such offer or solicitation.
London, 23 March 2006
CFDnet is a trading name of IG Markets Limited
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1. SUMMARY OF KEY INFORMATION………………………………………….…………… 3
2. DEFINITIONS……………………………………………………………………..………… 6
3. FEATURES OF CFDS……………………………………………………………………… 8
4. COSTS AND OTHER CONSIDERATIONS…………………………………..………….. 22
5. TERMS AND CONDITIONS…………………………..………………………..…………… 27
6. RISK FACTORS……………………………….……………………………………………… 32
7. CUSTOMER AGREEMENT……………………………………….………………………… 35
8. INFORMATION ABOUT THE COMPANY………………………..……………………… 56
9. NOTES TO THE FINANCIAL STATEMENTS….……………………………………..…… 63
10. TAX INFORMATION………………………………………………………………………… 69
11. DECLARATIONS / AUDITOR'S REPORT……………………………..………………… 72
12. ADDITIONAL INFORMATION………………………………………..…………………… 73
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1. SUMMARY OF KEY INFORMATION
The following information is derived from and should be read in conjunction with the full text of the
Information Memorandum. Customers should not solely rely on key or summarised information.
IG Markets is an operating company of the IG Group, of which IG Group Holdings plc is the parent
company. The IG Group specialises in trading derivatives with retail clients and market
professionals. The principal objects of IG Markets are to carry on the business in any part of the
world of margin trading, foreign exchange trading and hedging operations.
b) Date of Information Memorandum
The date of this Information Memorandum is 23 March 2006.
c) Use of proceeds
IG Markets' net proceeds from the issue of CFDs are used for general corporate purposes.
d) The CFDs offered
IG Markets will be offering to enter into CFDs with customers in the Netherlands. A CFD is a
bilateral agreement between IG Markets and a client which refers to a financial instrument (the
"reference instrument"), allowing the client to virtually trade that reference instrument without
actually owning it. The CFD replicates the economic effect of trading in the reference instrument.
By entering into a CFD the client can virtually "buy" the reference instrument without having to pay
the full price thereof. Instead, the client is only required to pay a deposit of normally between 10%
and 25% of the value of the reference instrument.
Entering into a CFD is referred to as the "opening" of a position; terminating a CFD as the "closing"
of a position. When the client closes a position, he receives or pays the difference between (i) the
market price of the reference instrument at the time of closing, and (ii) the market price of the
reference instrument at the time of opening the position.
The client can use CFDs to go "long" and/or "short". The client opens a long position by (virtually)
"buying" the reference instrument. The client closes the long position by (virtually) "selling" the
reference instrument. A short position is opened by (virtually) "selling" the reference instrument and
closed by (virtually) "buying" the reference instrument.
At the opening and closing of a position in respect of share CFDs, IG Markets charges a
commission to the client. This commission is calculated as a percentage of the value of the
reference instrument. In respect of other CFDs, IG Markets will charge a dealing spread. As long
as a share CFD remains open, the client will be credited or debited to reflect interest and dividend
adjustments. The interest and dividend adjustments depend on whether the client used the share
CFD to create a long or a short position. In the event the client has opened a long position, his
account is debited to reflect interest adjustments (as if he had borrowed money to buy the shares)
and credited to reflect any dividends. In the event the client has opened a short position, his
account is credited with interest adjustments and debited to reflect any dividends.
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IG Markets offers CFDs on a large number of individual shares, including the constituent shares of
the AEX and all major European and US stock indices. IG Markets also offers the ability to trade
CFDs on equity options, equity indices, commodities and other financial instruments.
Customers must sign the Customer Agreement and Risk Disclosure Notice before opening an
account. Once an account is open, customers will be able to open and close CFDs at any time,
subject to their having sufficient funds or credit in their account and subject to the other terms set
out in the Customer Agreement.
f) Terms and conditions of loans
IG Markets does not grant any loans.
g) Conversion provisions
CFDs are off-exchange derivatives and cannot be converted into the underlying shares or other
CFDs may be opened and closed at the prevailing cash price on the underlying market, as quoted
by IG Markets. Prices may be adjusted to reflect the depth of the underlying market.
CFDs are principal-to-principal transactions between the customer and IG Markets and are non-
transferable without the prior written consent of IG Markets in accordance with the Customer
Agreement. They may only be settled in cash. CFDs will only be entered into by IG Markets with its
customers and on the terms set out in its Customer Agreement.
The yield of CFDs is dependent upon the underlying instruments, the moment of opening and
closing of a position and the commission or spread charged by IG Markets.
CFDs with IG Markets are not listed on any securities exchange.
IG Markets is a UK resident company and is subject to UK corporation tax, the current rate of
which is 30 percent.
Any benefits derived (or deemed to be derived) from CFDs by a holder who is resident or deemed
to be resident in the Netherlands will generally be subject to Dutch (corporate) income tax in the
hands of such holder. As a rule, a retail investor – i.e. a holder of CFDs who is not engaged or
deemed to be engaged in an enterprise and does not receive benefits from miscellaneous
activities (overige werkzaamheden) with respect to the CFDs – will be subject annually to a 30
percent income tax imposed on a fictitious yield on the CFDs equal to 4 percent of their net fair
market value. A professional investor, whether an individual or a corporate entity, will generally be
subject to (corporate) income tax on the actual benefits derived (or deemed to be derived) from the
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CFDs at the statutory rates (up to 52 percent for individuals and 29.6 percent for corporate
CFDs carry a high degree of risk. The “gearing” or "leverage" obtainable means that a small
deposit or down payment can lead to large losses as well as gains. It also means that a relatively
small market movement can lead to a proportionately much larger movement in the value of a
customer’s CFD, which can work to the benefit or to the detriment of the customer.
If a market moves against a customer, he may be called upon to pay substantial additional margin
at short notice to maintain the position. If he fails to do so within the time required, his position may
be liquidated at a loss and he will be liable for any resulting deficit.
This means that there is the possibility that the CFD will provide little or no income. When trading
CFDs a customer may lose his deposit and possible margin payments, and it is possible that he is
left with an additional liability to IG Markets.
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Below is a list of some words used in this Information Memorandum and their meanings. The
Customer Agreement defines many terms and expressions and you should refer to them if in any
doubt about the meaning of any term or expression. You should also refer to the Contract Details
for specific information on market terminology.
Account means a CFD account of the Customer with us.
Application Form means an application form to open an Account with us.
Associated Company means any holding company or subsidiary company from time to time of IG
Markets and/or any subsidiary of such holding company or its subsidiaries.
Authorised Person means the Customer and/or any person authorised by the Customer to give
instructions to us under the Customer Agreement.
Company means IG Markets Limited.
Contract Details means the current schedule of commission rates, spreads, market details,
margin requirements, interest and other rates applicable to our CFDs, as listed on our website and
amended from time to time.
Contract for Differences or CFD means a contract with us whose value fluctuates by reference to
fluctuations in the price of an underlying instrument, offered by us to customers from time to time
on the terms and conditions set out in the Customer Agreement.
Customer means any party that enters into a CFD with us.
Customer Agreement means the IG Markets Margin Trading Customer Agreement, including the
CFD Product Module, as amended from time to time.
FSA means the Financial Services Authority of the United Kingdom.
Good Till Cancelled (GTC) means an instruction that the order does not expire at the end of the
trading day, although it normally terminates at the end of the trading month.
Group means the IG Group.
IG Markets means IG Markets Limited.
Information Memorandum means this Information Memorandum.
Margin and Margin Percentage means the percentage of Margin that you are required to have in
your Account to open a CFD and to maintain for the life of that CFD.
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Margin Call means a demand for additional funds to be deposited in your Account to meet Margin
percentage requirements because of adverse price movements.
We, us, or our means IG Markets Limited and any Associated Companies, as the context may
You or your means the Customer.
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3. FEATURES OF CFDS
3.1 Introduction to CFDs
A CFD is an agreement between you and IG Markets which allows you to make a profit or loss by
reference to fluctuations in the price of an underlying share or other instrument, without actually
owning the underlying product. The amount of the profit or loss will be the difference between the
price when the CFD is opened and the price when it is closed, adjusted to reflect notional
dividends and interest payments.
We offer CFDs on individual shares, stock indices, options, binary options, commodities,
currencies and futures contracts. CFDs are normally traded in the currency of the underlying
instrument, for example, a CFD on Philips shares will be designated in Euros whilst a CFD on IBM
shares will be designated in US dollars.
How to open a CFD
A position is opened by entering into a CFD, "buying" or "selling" such CFD:
• BUYING - If you expect an instrument (be it a share, currency, commodity, index price or
other) to rise, you buy the CFD.
• SELLING - If you expect an instrument (be it a share, currency, commodity, index price or
other) to fall, you sell the CFD.
How to close a CFD
A position is closed by terminating a CFD. To close a ‘bought’ or ‘long’ CFD you sell, and to close a
"short" or "sold" CFD you buy.
With most CFDs you can hold the position for as long as you like. This may be for less than a day,
or for months. Some CFDs have a set expiry date, on which the position will be closed
automatically. These CFDs can be closed before such expiry date.
Commission, financing costs, interest and dividend adjustments
We do not charge commission on stock index CFDs, Foreign Exchange CFDs or CFDs on stock
index options. Rather, we quote an "all-in" price, so the only charge is the dealing spread. Dealing
spread means the difference between our "buy" and "sell" quote.
When you trade a share CFD, we will charge a commission based on the underlying value of your
transaction (in much the same way as if you were buying shares). Details of commission rates are
set out in sections 4.2 and 4.8 and in the Contract Details.
While your share CFD position remains open, your Account is debited or credited to reflect interest
and dividend adjustments as if you had bought or sold the underlying instrument. The direction of
interest and dividend adjustments depends on whether the share CFD is used to create a long or
• With a long position, your Account is debited to reflect interest adjustments and credited to
reflect any declared cash dividends. The effect of these adjustments is to mirror the effect of
buying shares in the normal way, where you would fund the position daily and receive declared
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• With a short position, your Account is credited with interest adjustments and debited to reflect
any declared cash dividends. These adjustments mirror the effect of selling shares, where you
would earn interest on the proceeds of the sale, but cease to receive dividends.
Details of applicable interest rates are contained in sections 4.8 and 4.9 and in the Contract
Details. These rates may change over time but will only be increased by us after notification to you.
Adjustments will be made to stock index CFDs to reflect dividends paid on constituent shares of a
particular index (see section 3.4).
3.2 Limited risk protection; non-guaranteed orders
Limited risk protection – guaranteed protection
We offer a guaranteed limited risk facility, which allows you to trade CFDs on a wide range of
shares, indices and currencies without assuming a potentially open-ended liability in the event of
an extreme stock market movement. When you trade on a limited risk basis you specify a stop-loss
level at which your position will be closed should the market move against you. Your position will
be closed automatically at your selected level if the market price (or our quote, in the case of stock
index, stock index option and FX CFDs) reaches or goes beyond it.
There is an additional charge for this service, which is similar in effect to an insurance premium.
For share CFDs the limited risk premium starts from 0.3% of the underlying transaction value, but
may be higher than 0.3%, depending on the volatility of the underlying share. For stock index
CFDs, the limited risk premium is normally charged as additional ‘spread’. Further details of the
charges for limited risk protection are set out in the Contract Details. Limited risk protection is not
available on all CFDs and the size of the positions on which we are able to offer this facility may be
limited. Details of availability and amount of the limited risk premium will be confirmed with you
before you enter into a transaction with us.
We also offer non-guaranteed stop-loss orders, limit orders and opening orders. Non-guaranteed
orders allow you to open or close a CFD when the market price (or our quote) for that instrument
reaches or goes beyond the level or your stop-loss, limit or opening order.
These orders are available free of charge on most transactions. It is important to note however that
these orders are not guaranteed. We will use all reasonable efforts to execute non-guaranteed
orders at the specified level, but we do not guarantee that your order will be executed at the level
specified by you. The time and level at which orders are executed will be determined by us, acting
3.3 CFDs on individual shares
Trading individual shares on Margin using a CFD allows you to take a position on a share without
putting up the full contract value.
Example of opening and closing a "buy" CFD on an individual share ("ABC Company")
"Buying" a share CFD replicates the economic effect of buying a share position in that you receive
the benefit of all rises in the share price (and bear the cost of all falls in the share price). If a cash
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dividend is paid on the underlying share a positive adjustment is made to your Account as a
notional representation of that dividend. A negative adjustment is made to your Account as a
notional representation of the cost of funding an equivalent share position. Trading in share CFDs
is similar to normal share dealing. You deal at the "buy" or "sell" price of the underlying share on
the stock market, and pay a commission (calculated as a percentage of the value of the
transaction). Instead of paying the full value of the transaction you make a payment of Margin
which will be a percentage of the underlying contract value.
Your profit or loss will be made on the difference in price between when you open the CFD and
when you close it and the sum of any notional adjustments representing dividends and interest,
less our commission.
This example shows how you can use a CFD to achieve the same economic effect as buying a
Opening the position
ABC Company shares are quoted at €23.48/€23.50 in the market, and you decide that they are
going to rise. You decide to "buy" 5,000 shares as a CFD at €23.50, the offer price. While your
position remains open, your Account will be debited to reflect interest adjustments and credited to
reflect any dividends.
Closing the position
Some weeks later, ABC Company has risen to €24.90/€24.92 in the market and you decide to take
your profit. You sell 5,000 shares at €24.90, the bid price. Your profit on the trade is calculated as
Closing level: €24.90
Opening level: €23.50
Profit on trade: €1.40 x 5,000 = €7,000
The initial Margin required to open your position is 10% x €23.50 x 5,000 = €11,750.
Interest costs are calculated daily on your overnight positions by applying the applicable interest
rate (as further described in section 4.9) to the daily closing value of the position. The daily closing
value is the number of shares multiplied by the closing price. For example, the applicable interest
rate might be 6.00% and the closing price of the shares on a particular day might be €24.00. The
closing value of a 5,000 share position would be €120,000 (i.e. 5,000 shares x €24.00). So the
interest costs for the position for this particular day would be €20.00 (i.e. €120,000 x 6.00% / 360).
Interest adjustments are calculated daily and posted to your Account on a weekly basis, or more
frequently on request.
For share CFDs commission is payable on the opening and closing transaction value. In the
example (and using a commission rate of 0.25% as an example) the commission payable would
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be: Opening 5,000 x €23.50 x 0.25% = €293.75; Closing 5,000 x €24.90 x 0.25% = €311.25; i.e. a
total of €605.
Calculating the overall result
To calculate the overall profit on the transaction you also have to take the commission you have
paid into account and the interest and dividend adjustments that have been credited or debited. In
the example above, you might have held the position for 21 days, at a total interest cost of, say,
€504. During this time if ABC Company paid its shareholders a cash dividend of, for example, 54
cents per share you would receive a positive dividend adjustment of €2,295 (5,000 x €0.54 x 85%)
to your Account on the ex-dividend date (dividends on shares in Dutch companies are typically
paid net of a 15% withholding tax, so you receive 85% of the gross dividend as a dividend
adjustment). The overall result of the trade is a profit, calculated as follows:
Profit on trade: €7,000
Total commission: (€605)
Interest adjustment: (€504)
Dividend adjustment: €2,295
Overall profit: €8,186
Example of opening and closing a "short" or "sold" CFD on an individual share ("PQR Holdings")
Selling a share CFD is the opposite of buying: you replicate a short position in the underlying share
where you benefit from all falls in the underlying share price (and conversely bear the costs of all
rises in the underlying share price). A negative adjustment will be made to your Account (on the
ex-dividend date) representing a notional dividend if any cash dividends are paid on the underlying
share and a positive adjustment will be made to your Account representing the interest that you
could have earned if the proceeds of the underlying share sale had been placed on deposit.
This example shows how you can use a CFD to achieve the same economic effect as selling a
Opening the position
Say it is February and you think PQR Holdings is about to fall. The share is quoted in the market at
€26.22/€26.24. You sell 5,000 shares as a CFD at €26.22, which is the bid price at the time.
Commission (using a commission rate of 0.3% as an example) would be €393 (5,000 shares x
€26.22 x 0.3%). Your Margin percentage requirement for this trade is €13,110 (5,000 x €26.22 x
10%). Your Account balance of €20,000 comfortably exceeds this. For an explanation of Margin
requirements see section 4.1).
Because you have taken a short position, your Account is credited to reflect interest adjustments
and debited to reflect any dividends.
The interest credit on your position is calculated daily, by applying the applicable interest rate to
the daily closing value of the position. In this example, the applicable interest rate might be 2.25%
and the closing price of the shares on a particular day might be €26.40, giving a closing value of
€132,000 (i.e. 5,000 shares x €26.40). So the interest credit for the position for this particular day
would be €8.25 (i.e.€132,000 x 2.25% / 360).
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At the end of April your position is still open at the time of the PQR Holdings ex-dividend date. The
amount of the declared cash dividend is €0.24 per share and this is debited from your Account.
The adjustment is calculated as follows: 5,000 shares x €0.24 = €1,200.
Closing the position
By early May, PQR Holdings has risen to €27.01/27.03 in the market and you decide to cut your
loss and close the position. You buy 5,000 shares at €27.03, the offer price. The commission on
the transaction in this example is 0.3% or €405.45 (5,000 shares x €27.03 x 0.3%). Your loss on
the trade is calculated as follows:
Closing level: €27.03
Opening level: €26.22
Loss on trade: €0.81 x 5,000 = €4,050
Calculating the overall result
To calculate the overall loss on the transaction you also have to take the commission you have
paid into account and the interest and dividend adjustments. In this example, you might have held
the position for 65 days, earning a total interest credit of, say, €536.25. The overall result of the
trade is a loss, calculated as follows:
Loss on trade: (€4,050)
Total commission: (€798)
Interest adjustment: €536
Dividend adjustment: (€1,200)
Overall loss: (€5,512)
Example of buying with limited risk protection ("XYZ International")
Opening the position
XYZ International is quoted at €21.48/21.50 in the market, and you buy 2,000 shares as a CFD at
€21.50, the offer price, on a limited risk basis. You decide to put your guaranteed stop-loss at
€21.00. Should the market move against you, your position would be closed at €21.00, even if, for
example, the share opened at a substantially lower level after an overnight profit warning. So the
most you can lose on the position (excluding our commission, limited risk premium, interest and
dividend adjustments) is €1,000 (€21.50, the opening level, minus €21.00, the stop-loss level =
€0.50. €0.50 x 2000 shares = €1,000).
The commission on the transaction (using 0.25% as an example) is €107.50 (2000 shares x
€21.50 x 0.25%). The limited risk premium is also charged when the position is opened. In this
case it is 0.3% or €129 (2000 shares x €21.50 x 0.3%).
The Margin percentage required for a limited risk trade of this type is equal to the maximum
potential loss on the position plus an additional 10% to cover any interest or dividend adjustments.
In this example the Margin percentage requirement would be €1,100 (€1,000 maximum potential
loss + €100 (10% x 100)).
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Interest and Dividend adjustments are applied to limited risk positions in exactly the same way as
to standard CFD positions, as shown in the examples above.
Triggering the guaranteed stop-loss
The following day, XYZ International announces a profit downgrade and the shares open sharply
lower at €16.00. Your guaranteed stop is triggered, and your position is closed at €21.00, even
though the share opened well below this level. You sell 2,000 shares as a CFD at €21.00. The
commission, using the same example rate, is 0.25% or €105 (2,000 shares x €21.00 x 0.25%).
Your loss on the trade is calculated as follows:
Opening level: €21.50
Closing level: €21.00
Loss on trade : €0.50 x 2,000 = €1,000
Without the guaranteed stop, you would in this example have been able to close your position at
€16.00 (the opening market price) at best, representing a loss on the position of €11,000. Instead
you have limited your loss on the trade to €1,000.
* The overall result would also include commission, interest and any dividends that might be paid during the period the
position was held.
Example of selling with a non-guaranteed stop-loss ("EFG Corporation")
Opening the position
EFG Corporation is quoted at €14.12/14.14 in the market, and you sell 2,000 shares as a CFD at
€14.12, the bid price. You decide to put your non-guaranteed stop-loss at €15.00. Should the
market move against you, we will aim to close your position at €15.00, however, should the market
go straight through your stop-loss, your position will be closed at the next available level that we
Placing a non-guaranteed stop-loss on a particular position can result in a substantial reduction in
the Margin requirement. The Margin requirement is calculated as the difference between the
current level of the position, €14.12, and the stop-loss level, €15.00, plus a factor for market
slippage (which includes an allowance for any interest and dividend adjustments). The market
slippage factor is no more than 30% of the normal Margin requirement that would apply if the non-
guaranteed stop-loss had not been set. In this example, the total Margin required would equal
€2,607 being the difference between the current level of the position and the stop-loss level plus
30% of the normal margin requirement (based on a margin factor of 10%. The calculation can be
shown as follows: €15.00 stop-loss level - €14.12 opening level = €0.88. €0.88 x 2,000 shares =
€1,760 plus additional €847 required for market slippage calculated as 10% normal Margin
requirement x €14.12, opening level x 2,000 shares x 30% slippage factor = €847). Margin
requirements for positions with non-guaranteed stop-losses will not exceed the normal Margin
percentage requirement based on the current share price.
Interest and dividend adjustments are applied to positions in exactly the same way as to standard
CFD positions, as shown in the examples above.
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Triggering the non-guaranteed stop-loss
In this example, we will assume that EFG Corporation shares go straight through the stop-loss
level of €15.00 and the position is closed at €15.25, resulting in a loss of €2,260 (excluding our
commission, interest and dividend adjustments). This loss is calculated as (€14.12, the opening
level, minus €15.00, the stop level + market slippage of €0.25 = €1.13. €1.13 x 2,000 shares =
Your loss on the trade is calculated as follows:
Opening level: €14.12
Closing level: €15.25
Loss on trade*: €1.13 x 2,000 = €2,260
* The overall result would also include commission, interest and any dividends that might be paid during the period the
position was held
3.4 Stock index CFDs
A stock index CFD works in the same way as a CFD on an individual share and allows you to
make a profit or loss by reference to fluctuations in the value of the underlying index, such as the
AEX Index. There is no commission payable on opening or closing a stock index CFD. Our only
charge is the dealing spread.
Example: opening a stock index CFD ("AEX")
Our quote for the AEX is currently 463/464. You think the blue-chips look strong and decide to buy
two contracts at 464. (One contract is the equivalent of €100 per index point.) There is no
commission to pay.
Opening the position
To open your position you supply a deposit of €3,500 per contract = €7,000. You will then make or
lose €200 for every point the sell price rises above or falls below 464.
Closing the position
The market moves in your favour over the next few days, and you decide to take your profit. Our
quote has risen to 470/471, and you close your position by selling two contracts at 470.
Your profit on the trade is calculated as follows:
Closing level: 470
Opening level: 464
Profit on trade : €1,200 (6 points x 2 contracts x €100 per point)
*To calculate the overall result you also have to include interest and dividend adjustments. Interest adjustments are applied
daily to stock index trades in exactly the same way as to share CFDs. Dividend adjustments are applied whenever a stock
in the relevant index goes ex-dividend.
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3.5 CFDs on options
We also offer a range of CFDs on the price of traded options on various products including leading
stock indices and FX. Details of these markets and products are listed in the Contract Details.
There is no commission to pay on option CFDs; we quote an "all-in" price, so the only charge is the
dealing spread - the difference between our "buy" and "sell" quotes. The Margin requirements are
set out in the Contract Details.
As an example, we offer stock index option CFDs on two types of traded options, puts and calls. A
traded put option is the right to sell a market (the underlying market) at a fixed level, on or before a
particular date. For example, a September 350 AEX Index put is the right to sell the AEX Index at a
level of 350 on or before a specified date in September. A traded call option is the right to buy a
particular market at a fixed level on or before a fixed date. For example, a December 5500 FTSE
100 call option is the right to buy the December FTSE 100 Index at 5500 on or before a specified
date in December.
With traded options, the holder (or "buyer") of the put or call has the right but not the obligation to
exercise the option – they need only do so if they choose to. The writer (or "seller") of the put or
call has the obligation, if the option is exercised, to buy or to sell at the specified price (the "strike
Option CFDs are not exercisable. Profits or losses on option CFDs are made by reference to the
movement of an option price. You are not buying or selling the option itself. It cannot be exercised
by or against you and it cannot result in the acquisition or disposal of the underlying security, index
or its constituents. You are able to close an option CFD at any time before expiry but at expiry, the
difference between the closing price level and the price level at which you opened your CFD will
determine your profits or losses.
Your risk in dealing on "long" options positions is limited because the maximum loss you can
sustain is the cost of the option premium (it can only fall to zero). An option seller sells an option
believing that the underlying market will not move above or below the relevant strike price. If he is
right, the option will expire worthless and he will receive the total price of the option. It is very
important to note that the seller of an option faces an open ended risk, as there is no upper limit on
the price of an option, and there is no limit to the level at which the seller may be obliged to ‘buy’
the option to close out a losing position.
As the risks associated with buying and selling options are different from other CFDs we offer,
Margin requirements are calculated differently. The Margin you will be required to pay for placing a
buy CFD on an option is the price at which you buy the option multiplied by the deal size. This is
the total amount that you can lose on your CFD. The Margin requirement for selling an option is
variable. If the option has intrinsic value it is said to be "in the money" and its value moves one-for-
one with the underlying market; therefore, at worst, an option seller can be charged Margin equal
to what he would have paid had he taken a position in the underlying market. The Margin
percentage is never less than half the Margin percentage for the underlying instrument, because
there is always the possibility that the option may come "into the money". So the Margin
percentage lies between 50% and 100% multiplied by the equivalent for the underlying instrument,
and is often equal to the price of the option sold.
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3.6 Foreign Exchange ("FX") CFDs
FX CFDs allow you to gain exposure to movements in currency rates. FX CFDs are opened in the
same way as other CFDs. We will quote a bid and offer price for an exchange rate. For example,
we might quote the Euro against the US Dollar as 12214/12218. If you thought the Euro was going
to rise against the US Dollar you would "buy" the CFD at 12218. If you thought the Euro was going
to fall against the US Dollar you would "sell" the CFD at 12214. You can close your position in the
same way. If the CFD is a buy, the closing level will be the lower figure quoted by us, if the CFD is
a sell, it will be the higher figure.
Details of currency trading sizes are set out in the Contract Details. Margin percentage varies
according to the underlying currencies being traded, but is typically 2%.
While your position remains open, your Account is debited or credited to reflect the effect of the
interest rate differential between the two currencies (e.g. € and US$). For example, if you hold a
buy/long position in Euro against US Dollar you will receive interest if interest rates are higher in
the EU than in the United States. The amount of interest is determined by reference to the official
short-term interest rate quotations quoted by both relevant financial authorities. This will then be
credited or debited against your Account as appropriate.
Limited risk protection
As with the other CFDs that we offer, you can also take limited risk protection on your FX CFDs to
limit your losses at the level you select. The limited risk protection premiums payable on FX CFDs
are listed in section 4.8 and may be found in the Contract Details.
Example of trading FX CFD: Buying US$/yen
Opening the position
You decide to go long on the US dollar against the yen, and ask for a quote for 5 contracts, the
equivalent of US$500,000 (contract sizes are set out in the Contract Details). We quote you
124.34/124.38 and you buy 5 contracts at 124.38. There is no commission to pay on FX CFD
trades. Our only charge is the dealing spread.
While the position remains open, your Account is debited or credited to reflect the effect of the
interest rate differential between the US dollar and the yen. US dollar interest rates are higher than
yen rates, and you receive interest for holding a long position in the higher-rate currency, so the
interest adjustment is a credit to you.
In this example, the credit for one day might be ¥5025 (this amount will be very similar to the
amount you would earn from the "tom. next" in conventional FX trading).
Closing the position
Three weeks later, US$/yen has risen to 127.55/127.59, and you take your profit by selling
5 contracts at 127.55. Your profit on the trade is calculated as follows:
Closing transaction: US$500,000 (5 contracts) x 127.55 = ¥63,775,000
Opening transaction: US$500,000 (5 contracts) x 124.38 = ¥62,190,000
Profit on trade: ¥1,585,000
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Calculating the overall result
To calculate the overall profit, you also have to take the interest credit into account. In this
example, you might have held the position for 20 days, earning a total interest credit of ¥98,500:
Profit on trade: ¥1,585,000
Interest credit: ¥98,500
Overall profit: ¥1,683,500 = US$13,197 equivalent
You can choose which currency you wish to hold your Account balance in. Conversions will be at a
rate no less favourable to you than 0.75% below or above (as the case may be) the interbank spot
exchange rate at the time of conversion. Exchange rates are subject to fluctuations and clients
should always be aware of the effect that exchange rates will have on their positions.
Example of trading FX CFD: Selling €/US$ with limited risk protection
Opening the position
You decide to go short on the Euro against the US dollar, and ask for a quote for 2 contracts, the
equivalent of €200,000. We quote you 12214/12218 and you sell 2 contracts on a limited risk
basis. With limited risk transactions, all of the dealing spread plus the limited risk premium is paid
when the position is opened. So the position is opened at 12216 (the middle of our quote) minus 4
(all of the spread) minus 3 (the limited risk premium) = 12209.
Your position is opened at 12209. You decide to put your guaranteed stop-loss at 12300. This
means that, should the market move against you, your position will be closed at exactly 12300,
even if, for example, the market "gaps" from 12209 to 12380 on unexpected news. So the most
you can lose on the position is:
Stop level: €200,000 (2 contracts) x 12300 = US$246,000
Opening level: €200,000 (2 contracts) x 12209 = US$244,180
Maximum possible loss: US$1,820 (ignoring interest adjustments)
Interest adjustments are applied to limited risk positions in exactly the same way as standard FX
CFD positions. In this case, US dollar interest rates are higher than Euro rates, and you are
credited interest for running a short position in the higher-rate currency.
Closing the position
A week later, €/US$ has risen to 12265/12269. You think the Euro may now go higher and close
your position by buying two contracts at 12267, the middle of our quote. (There is no spread to pay
when you close a limited risk position; you paid all the spread on the opening). Your loss on the
trade is calculated as follows:
Closing transaction: €200,000 (2 contracts) x 12267 = US$245,340
Opening level: €200,000 (2 contracts) x 12209 = US$244,180
Loss on trade: US$1,160
Calculating the overall result
To calculate the overall result, you also have to take the interest debit into account. In this
example, you might have held the position for 7 days, incurring a total interest debit of US$40.60.
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Loss on trade: US$1,160
Interest debit: US$40.60
Overall loss*: US$1,200.60
This does not include limited risk premium.
3.7 Commodities and money market CFDs
We also offer a range of CFDs on the price of various commodity, interest rate and bond futures.
These are often generically referred to by us as Future CFDs. Details of these products are listed
in the Contract Details. There is no commission to pay on these types of CFDs; we quote an "all-in"
price, so the only charge is the dealing spread – the difference between our "buy" and "sell"
quotes. The Margin requirements are set out in the Contract Details. These types of CFDs have
set expiry dates, on or after which the position will be closed automatically.
Example: Buying the T-Bond (Decimalised)
Opening the position
You believe long-term interest rates in the US will fall and therefore the price of Treasury Bonds
will rise. You check the real-time price for our December Decimalised T-Bond on-line; the price is
showing 11167/11175 and you decide to buy three contracts at 11175.
The Decimalised T-Bond is quoted in hundredths of a full Treasury Bond point (in the underlying
market, T-Bonds are being quoted in fractions of 1/32 of a full point). So 11175 is equivalent to
111-24 in the underlying, as 111-24 means 111 and 24/32, or 111 and 0.75 of a point. One
contract is the equivalent of US$10 per hundredth of a full point.
Closing the position
As you predicted, interest rates do fall and the price of Treasury Bonds rises accordingly. You
check our current quote, and we are quoting the price 11245/11253. You close your position by
selling three contracts at 11245. Had you left your position open up until the expiry date, the
position would have closed at the closing price on that date, minus the closing spread.
Calculating the overall result
Closing level: 11245
Opening level: (11175)
So the profit on this trade would be 70 points x 3 contracts x US$10 per point = US$2,100
3.8 Binary Options
A Binary Option is a special type of CFD with an "all or nothing" payment profile. Binary Options
allow you to trade on discrete financial events, such as the closing level of a stock index on a
particular day. All Binary Options have only two possible results. For example, the Binary Option
for the Wall Street Index to finish up on the day: Wall Street will either finish up or it will not. If you
thought it was going to finish up, you would "buy" our Binary Option on Wall Street. If you thought it
was going to finish down, then you would "sell" the Binary Option.
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For a Binary Option, there are just two possible settlement prices. Using the above example:
• if Wall Street closes up, then the Binary Option settles at 100;
• if Wall Street closes down (even if it is only a fraction of one point down), then the Binary
Option settles at 0.
You can go long or short on any price that we quote. Binary Option prices are extremely sensitive
to market fluctuations, particularly in the period immediately before expiry; however your level of
risk is always certain. The Margin requirement for all Binary Option is an amount equal to your
maximum loss on that Binary Option or, if you make a series of trades, your maximum possible
loss on all of those trades.
We quote continuous two-way prices for every Binary Option, so you can take a profit on an open
position or cut a loss at any time.
We offer two basic types of Binary Options, with different types of trigger conditions:
1. Binary Options where the trigger condition is either a price barrier (e.g. DAX 30 Index to close
up on the day) or a price range (e.g. FTSE 100 Index to close between down-20 points and
down-30 points on the day).
2. American-style OneTouch Binary Options where the trigger condition is that a price level is
reached or exceeded before expiry. If the trigger condition is achieved, this type of Binary
Option settles immediately at 100.
Basis of quotation
A range of possible Binary Options may be offered on the daily move/official settlement of each
market. The price quotation for each Binary Option is expressed in points. If the outcome
described by the Binary Option occurs, that Binary Option will settle at 100. If it does not occur, the
Binary Option will settle at zero.
Spot FX Binary Options are offered on various currency pairs. Quotations are based on the
achievement of specified price levels in the spot rate concerned at 14.00 Chicago time each day.
These levels will be derived from the first printed trade as reported by Bloomberg after the
settlement time of the marker.
Our spread will vary according to the level of the price quotation and the time to expiry. Further
details can be found in the Contract Details.
Binary Option settlement
If the event which is the subject of the Binary Option occurs (using the example above, the Wall
Street Index finishes up on the day), the Binary Option will settle at a value of 100. If the event
does not occur (e.g. the Wall Street Index finishes down on the day), the Binary Option will settle at
a value of zero. For the purpose of settling Binary Options, the AEX Index future price in question
will be rounded to one decimal place, the Wall Street price will be rounded to two decimal places,
and the €/$US spot rate will be rounded to the nearest pip. If a market settles exactly on a Binary
barrier after such rounding, that market will be taken to have settled above the barrier for the
purposes of trade settlement.
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Further details on the types of Binary Options, the basis of our quotations, charges and any other
rules are set out in the Contract Details. There is no commission on Binary Options; the only
charge is the dealing spread.
Example: Buying a Wall Street 0/+20 Binary Option
It is half an hour before the close of Wall Street, and the index is 15.5 points below the previous
day's official settlement price. You think the market will rally before the close and end up on that
We quote a range of Binary Options on the daily settlement price of Wall Street. Our price for the
market to finish between unchanged and up 20 points (0/+20) is 6.8 - 9.5.
You decide to buy 5 contracts at 9.5, the offer price. Each contract is worth US$10 per point. So
you are risking 9.5 x 5 contracts x US$10 = US$475. You also know that, should the underlying
market indeed finish up on the day, your position will be worth 100 x 5 contracts x US$10 =
Ten minutes later, Wall Street has rallied and is up 2.5 points on that day. Our quote for the 0/+20
Binary Option is now 53.2 - 56.2. You decide to take your profit rather than risk waiting for the
settlement price. You close the position at our bid price of 53.2.
Closing level: 53.2
Opening level: 9.5
Profit on trade: 43.7 x 5 x US$10 = US$2,185
Example: Selling a Euro/US$ Up Binary Option
The Euro against the US Dollar is 20 points below the previous day's settlement price (a spot rate
derived from the official settlement price of EUR/USD on the Chicago Mercantile Exchange at
14.00 Chicago time). You think the market is not likely to recover by the next settlement.
Our price for the Euro/US$ to finish up is 38 - 41.5.
You decide to sell 10 contracts at 38, the bid price. Each contract is worth US$10 per point. The
worst outcome for you would be for the Euro/US$ to finish up and therefore for the Binary Option to
expire at 100. So you are risking (100-38) x 10 contracts x US$10 = US$6,200. Should the
underlying market not finish up on the day, however, the option would be worthless, meaning that
you would make 38 x 10 contracts x US$10 = US$3,800.
Several hours later, the exchange rate has recovered slightly but is still 10 points down on the day.
Our quote for the Euro/US$ Up Binary Option is now 11.8 - 15.3. You could take your profit here,
but decide to hold on to the expiry.
The Euro/US$ finishes just 4 points lower than the previous day's settlement price. It is close, but
the Euro/US$ has finished down and therefore the Euro/US$ Up Binary Option expires at 0.
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Opening level: 38.0
Closing level: 0.0
Profit on trade: 38.0 x US$100 = US$3,800
3.9 Important information about the examples in this Information Memorandum
The examples in this Information Memorandum are solely intended to illustrate the way IG Market’s
products operate. Such examples are not intended to give any representation about the
performance of particular shares or other underlying products, nor are they intended to give any
representation about the volatility of particular shares or the market in general. Further, the
companies used as examples in this Information Memorandum are completely fictional.
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4. COSTS AND OTHER CONSIDERATIONS
Upon opening a CFD, you will be required to make a payment of Margin to us, which will be a set
percentage of the value of the underlying transaction. The initial Margin requirement must be in
your Account before a position is opened.
For example, you buy a CFD of 5,000 ABC Inc shares priced €7.46. For this deal, you are required
to pay Margin of 10% to us. The initial Margin payment you make is therefore €3,730 (5,000 x
€7.46 x 10%).
Initial Margin requirements
The initial Margin requirement for any particular CFD is calculated as a percentage of the opening
Margin percentages for particular shares vary according to volatility and market conditions, and are
normally between 10% and 20%, although they may be higher in some circumstances. The Margin
requirement for a limited risk CFD transaction is equal to the amount which would be lost if the stop
were triggered, plus 10% to cover any interest and dividend adjustments.
The Margin requirement for buying an option CFD is the opening price (or premium) multiplied by
the contract value (per index point). This is the maximum possible loss on the position. The Margin
requirement for selling an option contract is variable and will be quoted to you on request
immediately prior to opening the transaction. In general, it will be related to the opening level of the
transaction, but will never be less than half the Margin requirement for the underlying instrument or
greater than the full Margin or deposit that would be required for the underlying instrument.
The normal initial Margin requirement for an FX CFD is 2% of the position value.
Further details of Margin rates can be found in the Contract Details.
Further Margin payments
For as long as a CFD is open, you are required to keep sufficient funds in your Account to meet
the Margin percentage requirement (in this example, 10%). Margin is a floating amount, rather than
one fixed payment. Each day that the CFD is open, we will recalculate the amount of Margin that
you are required to pay. For example, if one week after you open your ABC Inc CFD, the price of
ABC Inc has risen to €7.70, then you will be required to maintain a Margin amount of €3,850, i.e.
an additional €120. Similarly, if the price of ABC Inc drops, so also does the amount of Margin you
are required to maintain.
We will specify the Margin percentage required on your CFD at the time that you open the CFD.
However, we reserve the right to alter that percentage during the time that the CFD remains open
(including, for example, under volatile market conditions; see section 5.15). In extreme conditions
or situations, percentage or per-contract Margin requirements higher than those shown in the
Contract Details may apply. Examples of extreme conditions are: the financial market crash of
October 1987; the Kobe earthquake of 1995; and the aftermath of 11 September 2001. If an
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extreme condition occurs, we will take steps to notify you if you already have an open CFD, or, if
you wish to open a new CFD.
Making Margin payments
We constantly monitor your open positions to ensure that you retain the correct Margin percentage
on open positions. This means that we may call you for further Margin during the day, for example
if the price on your open CFD has moved significantly.
If we should contact you to require you to make Margin payments on your Account, we will add up
the Margin requirements for all open positions on your Account. If the cash in your Account and the
value of your open positions is less than the Margin requirement in your Account, you will be
required to fund the shortfall. The amount which you will be required to pay will be sufficient to
ensure that you have completely covered the Margin requirement for all open positions in your
If the Margin requirement shows that the total value of cash in your Account and the value of your
open positions is greater than the Margin requirement in your Account, that surplus is available to
be paid to you by us.
Payments of Margin are not a cost, per se, but you should be aware that we will not pay interest on
Margin payments (see section 4.7).
Margin payments are required in the form of cleared funds in our bank account, unless we agree to
accept non-cleared funds. We may also agree to accept other assets as collateral in fulfilment of
your Margin requirements but, if we agree to do this, the holding of these assets will be subject to a
further written agreement between you and us. This agreement will set out how your assets will be
held by us and the circumstances in which they may be realised.
Commission on individual share CFDs
Commission charges for share CFDs are calculated as a percentage of the transaction value
and/or as an amount per equivalent security or securities in the underlying market. Commissions
are charged either on a percentage basis or on a cents-per-share basis and are subject to a
minimum charge. You will be informed of the commission rates and financing rates which apply
when you open your Account, and from time to time at our discretion. Further details of
commission rates are given in section 4.8 and in the Contract Details.
Commission on stock index CFDs, stock index option CFDs, FX CFDs, Binary Options
No commission is payable on these transactions. The only charge you pay is our dealing spread.
Dealing spread is the difference between our quotes (the level at which you open a "buy" or "sell" a
CFD). Dealing spreads vary according to the market concerned and are subject to variation,
especially in volatile market conditions. Wider spreads for stock indices apply when they are
quoted outside normal market hours. The maximum spreads are detailed in section 4.8 and further
details are provided in the Contract Details. Because dealing spreads depend upon activity in an
underlying market the dealing spread when you close a CFD may be different from the dealing
spread when you opened it. For limited risk transactions, all of the spread and the limited risk
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premium are charged upon the opening. Stock index and stock index option CFDs are closed at
the market level, FX CFDs are closed at the middle market level.
In extreme conditions we will, where possible, continue to quote prices even where the underlying
markets are suspended. In these unusual circumstances, spreads may be quoted which are
significantly wider than those shown in the information table in section 4.8.
4.3 Limited risk premiums
Limited risk transactions are available on certain CFDs at our discretion. Limited risk transactions
carry a limited risk premium, which is paid upon the opening of the position. The limited risk
premium is calculated as a percentage of the underlying transaction value, and may vary
according to the volatility of the share. Further details are set out in the information table in
section 4.8 and in the Contract Details.
4.4 Balance on your Account
The balance in your Account will fluctuate according to the funds you have deposited in your
Account, the trading conducted in your Account and positions held. During the day your Account
balance(s), including all open positions, are valued against the prevailing underlying market rate
or, where there is no underlying market, against our current quote. Therefore your balance is
constantly calculated in line with market movements. The balance is calculated at the end of the
day using the closing mid-price (or the last traded price). This balance is used to assess your
available funds for use as a Margin requirement against current positions and to meet Margin
requirements on any new positions you may wish to take. The balance is used to establish if there
is a requirement for additional Margin. It is your responsibility to ensure that your Account is
sufficiently funded at all times, especially during volatile periods. If the balance in your Account
falls below the required deposit limit, you will only be allowed to close or reduce open positions
until the balance in your Account is back in excess of the required Margin percentage for all open
If any of your positions are denominated in a currency other than the base currency of your
Account, they will be continually valued at the applicable interbank mid-market spot exchange rate
(this may be found on information services such as Bloomberg or Reuters). Your statement will
then value all your positions in your chosen base currency, which may be either Euro, US dollars
or Sterling (see also section 6.4).
4.5 Profits / losses on your Account
Profits made on your trading activities increase the balance in your Account. Any surplus funds
may be withdrawn from your Account, on request. Losses made on your trading activities decrease
the balance in your Account, and therefore the Margin available for opening new positions or
keeping existing positions open.
We do not pay interest to clients on money held by us in a separate account or on money paid to
us as Margin. This may be regarded as a cost, as you will have lost the opportunity to obtain
interest (or some other return) on those moneys elsewhere.
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4.7 Cost of borrowing
In certain circumstances where you are short or selling an individual share you may be subject to
an additional “cost of borrowing” charge. In certain market conditions we may be charged such
sum by our own counterparties when we attempt to borrow the security in respect of which you
wish to open a short CFD position. In such case the Customer Agreement states that we will
endeavour to notify you of any charge that is or becomes payable. If you are unwilling to pay the
share borrowing charge, we will close that CFD with immediate effect. If you are short selling an
individual share and that share becomes unborrowable, we may also choose to close your CFD on
4.8 Table of costs and Margin requirements
The table below outlines the maximum costs and Margin requirements* that may apply to you
under this Information Memorandum. The actual costs for commissions, interest rate charges,
limited risk premiums, spread (on commission free indices and currencies) and any other fees
which apply to you are detailed in the current Contract Details. We initially send these to you upon
Account opening and subsequently the Contract Details are updated from time to time and are
available on our website.
Market Maximum Actual Maximum Actual Maximum Actual
Commission* Commission limited risk limited risk Margin Margin
premium* premium Requirement** Requirement
SHARES 0.4% See Contract 1.5% See Contract 50% See Contract
Details Details Details
INDICES 100/160 See Contract 150 See Contract 10% See Contract
in/out of hours Details Details Details
INDEX 200 See Contract n/a See Contract 100% See Contract
OPTIONS Details Details Details
CURRENCIES 200 or 2% See Contract 25 See Contract 8% See Contract
Details Details Details
CURRENCY 100 or 2% See Contract n/a See Contract 100% See Contract
OPTIONS Details Details Details
SHARE 20 See Contract n/a See Contract 100% See Contract
OPTIONS Details Details Details
COMMODITIES 300 or 2% See Contract 150 See Contract 20% See Contract
Details Details Details
COMMODITY 200 or 2% See Contract n/a See Contract 100% See Contract
OPTIONS Details Details Details
INTEREST 10 or 1% See Contract 12 See Contract 5% See Contract
RATES Details Details Details
INTEREST 20 or 1% See Contract n/a See Contract 100% See Contract
RATE Details Details Details
* For shares, maximum commission and maximum limited risk premium are quoted as a percentage of the value of the
share CFD position. For all other Markets, maximum commission and maximum limited risk premium are quoted as number
of points of spread. For example, for a CFD on an Index traded in hours, the maximum commission we will charge (in the
form of spread) is 100 points and the maximum limited risk premium we will charge (also in the form of spread) is
** Subject to normal market conditions. Please see section 4.1 above for a description of when volatile market conditions
may impact on the rates set out above. Also, please be aware that margin requirements for limited risk CFDs are different –
see section 4.1.
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4.9 Interest and dividend adjustments
For share CFDs, adjustments to reflect the effect of interest and dividends are calculated daily and
posted to your Account weekly, or (on request) more frequently.
Interest in respect of long positions is debited from your Account and interest in respect of short
positions is credited to your Account at rates which will be notified to you when you open your
Account. In the case of FX CFDs if the first currency has a higher interest rate, then you are
credited interest for running a long position and debited interest for running a short position. If the
first currency has a lower interest rate, then you are debited interest for running a long position and
credited interest for running a short position.
A dividend adjustment is applied when a share (or a component share in the case of stock indices)
passes its ex-dividend date (including the ex-date of any special dividend) in the underlying
market. In the case of long positions, the dividend adjustment is credited to your Account, in the
case of short positions it is debited from your Account. The dividend adjustment for shares varies,
depending on local tax arrangements which may vary from time to time. An adjustment will also be
made to your Account to reflect the effect of a bonus share issue, scrip, rights issue or any other
corporate action affecting the underlying share if you have an open CFD position.
The maximum interest rate that may be levied under this Information Memorandum is the relevant
interbank or central bank cash rate target +5% (for long positions) or -5% (for short positions). The
current actual interest rate is detailed in the up-to-date Contract Details that is initially sent to you
and is also available on our website.
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5. TERMS AND CONDITIONS
The terms and conditions of the CFDs offered by IG Markets are set out in the Customer
Agreement and CFD Product Module which are included in section 5 of this Information
Memorandum. The paragraphs below are not a substitute for understanding the Customer
Agreement and CFD Product Module, which you should read carefully.
5.1 Applying to open an Account
Types of Account
We offer two types of Account, a standard Account and a limited risk Account. The limited risk
Account restricts you to making limited risk CFDs. See section 3.2 for a description of the limited
risk facility and section 4.1 for the different Margin arrangements that apply to limited risk and
Important Account documents
Before you begin doing business with us, you would need to obtain and read copies of the
important documents listed below, complete an Application Form and be approved by us. The
Application Form requires you to disclose personal information. You should refer to the Customer
Agreement and the privacy notice on our website which explains how we collect personal
information and then maintain, use and disclose that information amongst our Associated
Companies, and privacy issues specific to your use of our website.
Your dealings with IG Markets on and from the date of this Information Memorandum will be
undertaken in accordance with the following documents:
• Customer Agreement;
• Risk Disclosure Notice;
• Classification Notes;
• Contract Details.
All these documents are available on the website www.igmarkets.com.
5.2 Classification as an Intermediate Customer
In the United Kingdom the rules and regulations of the Financial Services Authority allow a firm to
classify a customer who would otherwise be a private customer as an Intermediate Customer. A
person may accept the categorisation as an Intermediate Customer by agreeing to the
Classification Notes on our website.
If a person accepts the categorisation as an Intermediate Customer he or she loses the protection
of some FSA rules that afford protection to private customer whilst other FSA rules will be modified
so that they offer him or her more limited protection than he or she would be afforded as a private
If you accept this categorisation you will lose the protection of the FSA rules that afford protection
to private customer covering the understanding of risk, disclosure of charges, remuneration and
commissions, Margin requirements and non-exchange traded securities. Additionally there are
other rules, dealing with financial promotions, confirmation of transactions and periodic statements,
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best execution, custody and client money that will be modified so that they offer you more limited
protection than you would be afforded as a private customer. Accordingly, you should read and
understand the Classification Notes which describe the FSA rules, the protections which you will
lose, or which are varied, by reason of being classified as an Intermediate Customer.
By signing the Application Form, you:
• declare to IG Markets that you have read and understood the Classification Notices;
• consent to being treated as an Intermediate Customer;
• consent to your money being treated outside the FSA Client Money Rules.
The CFDs that we offer to enter into are offered solely on the basis of the information and
representations contained in this Information Memorandum, including the Customer Agreement
and the Contract Details, and no other information or representation is authorised and you should
not rely on any such information or representation.
5.4 Trading as principal
We will enter into all CFDs with you as a principal, not as an agent. We will treat you as our client
for all purposes and you will be directly responsible for performing your obligations under each
5.5 Minimum initial Account balance
There is a minimum Account opening deposit of €5,000. We can change this by giving you notice
under the Customer Agreement and we may waive it altogether.
5.6 Minimum trade sizes
Minimum trade sizes for some CFDs are set out in the Contract Details. These may be amended
and you should check the current Contract Details for up-to-date information.
5.7 Confirmations and statements
CFDs opened or closed by telephone will be confirmed during your conversation with our dealer.
CFDs opened or closed via any on-line trading mechanism will be confirmed on-screen. We will
send you statements and formal confirmations of your CFDs by post or e-mail. Confirmations will
give the details of any CFDs that you open or close with us. It is very important that you read your
statements and contact us if you disagree with the contents or if you do not receive your
statements. Your statements will include a summary of the financial position of your Account and
details of all transactions in your Account for the statement period. We make every effort to ensure
that all details are correct. However, it is very important that you read your statements and contact
us if you disagree with the contents or if you do not receive your statements.
You need to be aware of your Account balance, your Margin requirements for open positions, and
whether you are approaching your Margin call level. Your statement will also show whether your
Account has any excess funds available.
When we send you a confirmation or a statement you should review it and advise us of any errors
or inaccuracies within the following time limits or you will be deemed to have accepted them, and
they will be binding on you:
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• if you receive your confirmations and statements by e-mail, within 1 day of receiving your
confirmation or statement or no later than 2 business days after the date on which your
confirmation or statement was e-mailed to you; or
• if you receive your confirmation and statements by post, within 1 day of receiving your
confirmation or statement or five business days after the date on which your confirmation or
statement should have been received by you.
Any queries concerning your confirmations and statements should be made to our customer
services department. Any failure to advise of an error or inaccuracy will not preclude your right to
make a complaint in accordance with our dispute resolution procedures (see section 12.10) but we
reserve the right to rely on the terms of the Customer Agreement.
5.8 Making payments to us
Customers may deposit funds through electronic or telegraphic transfer. Unless agreed otherwise
by us, payments will be required in Euro. All funds must be cleared funds in our bank Account
before they will be counted towards the balance on your Account.
Customers should note that, other than in highly exceptional circumstances, we will only accept
payments into an Account from the Account holder and not from any third party. Funds in your
Account with us may be set off against losses that you incur with other Associated Companies of
5.9 Payments made by us
You may request that moneys available to the credit of your Account be remitted to you. Payment
of any such amounts will be subject to your leaving sufficient funds in your Account to cover any
Margin requirements or any other charges that might arise for any reason. You should note that,
other than in highly exceptional circumstances, all payments out of an Account held with us must
go directly to the Account holder.
5.10 Trading hours
Our general trading hours are as follows:
European shares: Market hours for the relevant Exchange
American shares: 09.30 – 16.00 New York time
UK shares: 08.00 – 16.30 London time
Australian shares: 10.00 – 16.00 Australian Eastern Standard time (AEST)
HK, Japanese shares: Market hours for the relevant Exchange
Currencies: 24 hours a day (from Sunday evening to Friday evening)
Stock Indices: 24 hours a day (with short gaps)
(FTSE, DOW, DAX, Hang Seng) (from Sunday evening to Friday evening).
Stock Indicies: Market hours for the relevant futures market.
(all apart from those listed above)
In some cases shorter opening hours may apply on days which are public holidays in any relevant
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Please check our website or ask our dealing desk for current details and information on any
restrictions on these hours.
5.11 Monitoring your positions
You are responsible for monitoring your positions and maintaining the required Margin percentage
at all times. You may be required to make Margin payments to cover your open positions at short
notice, and you must be able to meet those obligations at all times.
For this reason, you must be able to be contacted at all times. If you are going away (e.g. on
holiday) and have positions open, you will need to make arrangements to keep in touch with us.
This is done so that we can contact you if we should require additional Margin.
5.12 Account deficit
You will not be allowed to deal in CFDs (other than to close or reduce your open positions) when
there is a shortfall in the balance in your Account until such time as the balance is in excess of
your Margin requirements.
5.13 Security of your Account
We are unable to verify your voice on the telephone or your person via the internet or e-mail. For
this reason, when you use the telephone to contact us we will use your name and Account
number, and when you contact us on-line we will use your Account number and password to
identify you. You are responsible for maintaining the security of your Account details, including
your Account number and password. It is extremely important that you keep your Account number
and password confidential. If you are aware or suspect that these details are no longer confidential
then you should contact us as soon as practicable so that these details can be changed. We will
deem any CFD opened or closed by any person using your Account number and password to be
binding upon you.
5.14 Key dates and events
It is your responsibility to be aware of key dates and events, such as the expiry dates for particular
5.15 Our ability to close out your CFD(s)
In the case of an emergency or exceptional market conditions, the Customer Agreement allows us
to declare a force majeure event. This might include the interruption of our power supplies or
communications equipment, or the closure or suspension of any stock or futures market upon
which we base our prices (such as the closure of many US exchanges following 11 September
2001). In such circumstances we may increase the Margin percentage required on your open
CFDs and or close out some or all of your open CFDs. We will take all reasonable steps to inform
you if we determine that any such force majeure events exist. You should note that the Customer
Agreement details certain other circumstances in which your CFDs may be closed.
5.16 Other matters you should consider
No interest in underlying instrument
You do not acquire any interest in or right to acquire, or obligation to sell, purchase, hold or deliver
or receive, the underlying instrument of any CFDs that you and we deal in.
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We are not obliged to quote prices or accept orders or instructions in respect of any markets on
which we offer CFDs on a public holiday in any jurisdiction which, in our reasonable opinion,
affects the relevant underlying markets.
Out of Hours Trading
Although we are open 24 hours a day, we are not obliged to quote prices or accept orders or
instructions in respect of any markets on which we offer CFDs to which Out of Hours Trading
applies during any time when the relevant exchange is closed for business. We will designate from
time to time on our website the markets on which we offer CFDs to which Out of Hours Trading
If you have opened a joint Account:
• the liabilities of each of you will be joint and several;
• we may act upon instructions received from any person who appears to be an Account holder;
• any notice or other communication given by us to one Account holder will be deemed to have
been given to all Account holders.
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6. RISK FACTORS
6.1 The risks of trading with us
Before you apply to begin trading with us, you should carefully consider whether using CFDs is
appropriate for you in the light of your circumstances and financial position. You should be aware
that Margin trading can carry a high risk and we do not consider it suitable for many members of
the public. You should not invest in CFDs unless you understand the nature of the contract you are
entering into and the extent of your exposure to risk.
While CFDs can be utilised for the management of investment risk, they are unsuitable for many
investors. CFDs involve different levels of exposure to risk, and in deciding whether to trade in
such instruments you should be aware of the following points.
• Trading in CFDs carries a high degree of risk. The “gearing” or “leverage” involved in trading
CFDs means that a small Margin payment or down payment can lead to large losses as well
• A relatively small market movement can lead to a proportionately much larger movement in the
value of your investment, and this can work against you as well as for you.
• CFDs are off-exchange derivatives. This involves greater risk than on-exchange derivatives as
there is no exchange market on which to close out an open position – you are only able to
open and close your positions with us.
• Trading in foreign markets will involve certain risks different from trading in European markets.
The potential for profit or loss from transactions relating to a foreign market or denominated in
a foreign currency will be affected by fluctuations in foreign exchange rates. It is possible to
incur a loss if exchange rates change to your detriment, even if the price of the instrument to
which the CFD relates remains unchanged.
• CFDs are contingent liability transactions which are margined and require you to make a series
of payments against the purchase price, instead of paying the entire purchase price
immediately, and they may only be settled in cash.
• You may sustain a total loss of the Margin that you deposit with us to establish or maintain a
position. If the market moves against you, you may be called upon to pay substantial additional
Margin at short notice. If you fail to do so within the required time, your position may be
liquidated at a loss and you will be liable for any resulting deficit. You will be deemed to have
received a notice requiring the payment of such funds, even if you are not at home or do not
receive the messages we leave for you, if the notices are delivered to your nominated contact
• Even if a transaction is not margined, it may still carry an obligation to make further payments
in certain circumstances over and above any amount paid when you entered into the contract.
• Under certain trading conditions it may be difficult or impossible to liquidate a position. This
may occur, for example, at times of rapid price movement if the price rises or falls in one
trading session to such an extent that trading in the underlying market is suspended or
restricted. The Customer Agreement provides further information on situations where the
underlying market is suspended.
• A limited risk transaction limits the extent of your liability, but you may sustain the loss in a
relatively short time. Placing an ordinary (non-guaranteed) stop-loss order will not necessarily
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limit your losses to the intended amounts, because market conditions may make it impossible
to execute such an order if the underlying market moves straight through the stipulated price.
• There is no clearing house for CFDs, and the performance of a transaction by IG Markets is
not "guaranteed" by an exchange or clearing house.
• As an investor in CFDs, you will be exposed to the financial and business risk, including credit
risk, associated with dealing with IG Markets.
• IG Markets is a company with limited liability incorporated under the laws of England and
Wales. In the event IG Markets fails to perform its obligations, you may need to seek
enforcement of your rights before the courts of England, in accordance with the Customer
• Our insolvency or default may lead to positions being liquidated or closed out without your
consent and loss of any deposit on Account with us. In certain circumstances, you may not get
back any assets which you deposited with us as collateral in accordance with the provisions of
the Customer Agreement and you may have to accept any available payment in cash as an
We will not provide you with personal financial advice relating to CFDs and we will not make CFD
recommendations of any kind. The only advice we will give you will be as to how CFDs work.
6.2 Derivative markets are speculative and volatile
Derivative markets can be highly volatile. The prices of CFDs and the underlying securities,
currencies, commodities, financial instruments or indices may fluctuate rapidly and over wide
ranges and in reflection of unforeseen events or changes in conditions, none of which can be
controlled by you. The prices of CFDs will be influenced by unpredictable events including,
amongst other things, changing supply and demand relationships, governmental, agricultural,
commercial and trade programmes and policies, national and international political and economic
events and the prevailing psychological characteristics of the relevant marketplace.
6.3 Your money is not segregated from our money
Any money that you deposit with us will be held together with our money, in a bank account, and
held and dealt with in accordance with the Governing Legislation and the Customer Agreement
unless otherwise agreed by us in writing.
6.4 Currency risk
Balances in currencies other than Euro may be maintained by you in your Account and, when
requested by you and/or necessitated by your trading, conversions between currencies will be
made at an exchange rate not more than 0.75% less favourable to you than the prevailing
interbank mid-market spot rate at the time of the conversion (these may be found on information
providers such as Bloomberg or Reuters). For example, if you open a CFD on movement in the
price of IBM shares, it will be priced in US dollars. The Margin requirement for the CFD will be
denominated in US dollars, so if you post Euros we will convert them into US dollars to cover the
Margin requirement. Any further amounts of Margin will first be calculated in US dollars and then
converted to Euros when a Margin call is made to you. Any crystallised profit or loss on the CFD
will be calculated first in US dollars and then converted to Euros (again, at an exchange rate no
more than 0.75% less favourable to you than the current interbank mid-market spot rate) before
being allocated to your Account. You may choose to maintain your Account in Euro, US dollars or
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By signing the Application Form you acknowledge to us that you:
• have given consideration to your objectives, financial situation and needs and the risks of loss
which accompany the prospects of profit associated with dealing in CFDs and have formed the
opinion that dealing in CFDs is suitable for your purposes;
• were advised by us to obtain independent tax, legal and financial advice concerning this
Information Memorandum, including the Customer Agreement;
• received and considered this Information Memorandum, including the Customer Agreement.
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7. CUSTOMER AGREEMENT
MARGIN TRADING CUSTOMER AGREEMENT
(1) IG Markets Limited (“we”, “us”, “our”, “ours” and “ourselves” as appropriate), are authorised and regulated by the Financial
Services Authority (registration number 195355) for the conduct of investment business. Our registered address is Friars House,
157-168 Blackfriars Road, London SE1 8EZ.
(2) This Agreement will govern all Transactions entered into between us and the customer (“you”, “your”, “yours” and “yourself” as
appropriate). You should read this Agreement carefully, including the Product Module(s), Contract Details and ancillary documents
together with the Risk Disclosure Notice and any other documents that we have supplied or in the future do supply to you. Your
attention is drawn, in particular, to those Terms that are highlighted in italics and to Terms 9, 13, 15, 21 and 23(2), which deal with
manifest error, margin, our rights on your default, Force Majeure Events and our rights in the event of a dispute between you and us.
(3) Nothing in this Agreement will exclude or restrict any duty or liability owed by us to you under the Financial Services and Markets
Act 2000 or the FSA Rules and if there is any conflict between this Agreement and the FSA Rules, the FSA Rules will prevail.
(4) This Agreement will come into effect on the date we open your account, and, for any new versions thereafter, on the date we
notify you and that version will supersede any previous agreement between us on the same subject matter. Each Transaction you
open after such date will be subject to the Terms of this Agreement.
(5) In this Agreement certain words and expressions have the meanings set out in Term 28.
2. The services we will provide
(1) This Agreement sets out the basis on which we will enter into Transactions with you and governs each Transaction entered into
or outstanding between you and us on or after the execution of this Agreement. Unless we otherwise agree, you will need to enter
into a further agreement with us in respect of any other services that we agree to provide to you.
(2) You acknowledge that, regardless of whether or not you deal with us on credit, neither any limit set on your account nor any
amount of margin you have paid puts any limit on your potential losses in respect of a Transaction. Your financial liability to us may
exceed the level of any credit or other limit placed on your account. We refer you to paragraph 1 of the Risk Disclosure Notice.
3. Dealings between you and us
(1) We will act as principal and not as agent on your behalf. You will open each Transaction with us as principal and not as agent for
any undisclosed person. This means that unless we have otherwise agreed in writing, we will treat you as our client for all purposes
and you will be directly and personally responsible for performing your obligations under each Transaction entered into by you,
whether you are dealing with us directly or through an agent. If you act in connection with or on behalf of someone else, whether or
not you identify that person to us, we will not accept that person as an indirect customer of ours and we will accept no obligation to
them unless otherwise specifically agreed in writing.
(2) Dealings with you will be carried out by us on an execution-only basis unless agreed by us, in writing, as being on an advisory
basis or a discretionary management basis. We will not provide advice about a particular Transaction unless we reasonably believe
at the time that you open or close that Transaction, or at any other relevant time, that you are expecting and wish to receive advice
from us in relation to it. You agree that, unless otherwise provided in this Agreement, we are under no obligation:
(a) to satisfy ourselves as to the suitability of any Transaction for you;
(b) to monitor or advise you on the status of any Transaction;
(c) to make margin calls; or
(d) (except in the case of Limited Risk Transactions or where the FSA Rules require) to close any Transaction that you have
opened, notwithstanding that previously we may have given such advice or taken such action in relation to that Transaction or any
other. Unless otherwise specifically agreed, we do not owe you a duty of best execution.
(3) Where dealings between you and us are on an execution-only basis you will not be entitled to ask us to provide you with
investment advice relating to a Transaction or make any statement of opinion to encourage you to open a particular Transaction. We
may, at our absolute discretion, provide information:
(a) in relation to any Transaction about which you or your agent have enquired, particularly regarding procedures and risks attaching
to that Transaction and ways of minimising risk; and
(b) by way of factual market information however, we will be under no obligation to disclose such information to you and in the event
of us supplying such information it will not constitute investment advice. If, notwithstanding the fact that dealings between you and
us are on an execution-only basis, a dealer employed by us nevertheless makes a statement of opinion (whether in response to
your request or otherwise) regarding any Instrument, you agree that it will not be reasonable for you to rely on such statement and
that it will not constitute investment advice.
(4) Where dealings between you and us have been agreed by us, in writing, as being on an advisory basis, any investment advice
we may provide to you will be subject to the Product Module for Advisory Services.
(5) You acknowledge that advice given to you may result in gains or losses and agree that, in the absence of our fraud, wilful default
or negligence, we will not be liable to you in any way for any loss that may occur as a consequence of our having given or not given
any advice to you. You acknowledge and agree that if, in any given circumstance, we do not positively offer any advice or
recommend that you take any action in relation to any Transaction, that does not imply that we are advising you not to take such
action (or any action at all) in relation to that Transaction.
(6) You acknowledge that where we give you advice in relation to a Transaction we, an Affiliate, or some other person connected
with us, may have an exposure to, or interest, relationship or arrangement in, or that is material to, the Instrument concerned. When
we advise you to deal in a Transaction we could have a matching or opposite Transaction, or position in the underlying Instrument,
on behalf of another client, Affiliate or ourselves.
(7) Notwithstanding Terms 3(3) to 3(6), you agree that in respect of execution-only dealing you rely on your own judgement in
opening, closing, or refraining from opening or closing a Transaction with us and that in respect of both execution only and advisory
dealing we will not, in the absence of fraud, wilful default or negligence be liable for any losses (including, without limitation, indirect
or consequential losses or loss of opportunity or profits arising from any failure by you to make any anticipated profits), costs,
expenses or damages suffered by you arising from any inaccuracy or mistake in any information or advice, or unsuitability of any
advice, given to you, including without limitation, information or advice relating to any of your Transactions with us. Subject to our
right to void or close any Transaction in the specific circumstances set out in this Agreement, any Transaction opened by you
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following such inaccuracy or mistake will nonetheless remain valid and binding in all respects on both you and us.
(8) You acknowledge that information contained in the Contract Details is indicative only and may, at the time when you open or
close a Transaction, have become inaccurate. You will receive a copy of the then current Contract Details at the time you open your
account. The current Contract Details will be the version then displayed on our website(s), which may be updated from time to time.
It is not our policy to re-issue a printed copy of the Contract Details to customers unless specifically requested.
(9) Without detracting from any other limitation of our liability contained elsewhere in this Agreement, the maximum amount of our
liability in respect of any losses that you may suffer in connection with any advice given by us regarding a Transaction will be limited
to four times the amount of Commission or Spread payable in respect of that Transaction.
(10) Before you begin to trade with us you should obtain a clear explanation of all commission, spreads, fees and interest charges
for which you will be liable. These charges will affect your trading net profits (if any) or increase your losses.
4. Providing a quote
(1) Upon your request, in accordance with Terms 4(2) and 4(3), we will quote a higher and lower figure for each Transaction. These
figures will be the bid/offer prices in the Underlying Market or our own bid/offer prices and details of which basis will apply may be
found in the Contract Details or may be obtained from our dealers on request. Commission will be charged as follows:
(a) where you are quoted the bid/offer prices in the Underlying Market, we will charge you a commission in accordance with Terms
5(5) and 7(9); and
(b) where you are quoted our own bid/offer prices, the difference between them will comprise the Market Spread (where there is an
Underlying Market) and our Spread; unless we notify you in writing to the contrary you will not be charged any additional
You acknowledge that Spreads, including Market Spreads, can and do widen significantly in some circumstances, that they may not
be the same size as the examples given in the Contract Details and that there is no limit on how large they may be. You
acknowledge that when you close a Transaction, the Spread may be larger or smaller than the Spread when the Transaction was
opened. For Transactions transacted when the Underlying Market is closed or in respect of which there is no Underlying Market, the
figures that we quote will reflect what we believe the market price in an Instrument would be at that time. You acknowledge that such
figures will be set by us at our reasonable discretion. Our quotation is not guaranteed to be within any specific percentage of the
Underlying Market quotation, and the Spread quoted by us will reflect our view of prevailing market conditions.
(2) Subject to Terms 4(6) and 21, you may request a quote to open a Transaction or to close all or any part of a Transaction at any
time during our normal hours of trading for the Instrument in respect of which you wish to open or close the Transaction. We will be
under no obligation to but may, at our absolute discretion, provide a quote and accept and act on your offer to open or close a
Transaction outside our normal hours of trading for the Instrument to which the Transaction relates. We may notify you of certain
Instruments in respect of which we will not quote, restrictions on the amount for which we will quote, or other conditions that may
apply to our quote, but any such notification will not be binding on us.
(3) Subject to Term 4(2) we may provide a quote either orally by telephone or electronically via our internet trading platform(s), our
mobile dealing platform or by such other means as we may from time to time notify to you. Our quoting of a higher and lower figure
for each Instrument (whether by telephone, internet or otherwise) does not constitute an offer to open or close a Transaction at
those levels. A Transaction will be initiated by you offering to open or close a Transaction in respect of a specified Instrument at the
level quoted by us. We may, acting reasonably, accept or reject your offer at any time until the Transaction has been executed or we
have acknowledged that your offer has been withdrawn. A Transaction will be deemed to have been opened or closed only when
your offer has been received and accepted by us. Our acceptance of an offer to open or close a Transaction will be evidenced by
our confirmation of its terms to you. Prices displayed by us on any television or text service or via public pages of our website(s) are
only indicative and are for demonstration purposes only.
(4) If, before your offer to open or close a Transaction is accepted, we become aware that any of the factors set out in Term 4(5) are
not satisfied at the time you offer to open or close a Transaction, we reserve the right to reject your offer at the level quoted. If we
have, nevertheless, already opened or closed a Transaction prior to becoming aware that a factor set out in Term 4(5) has not been
met we may, at our absolute discretion, either treat such a Transaction as void from the outset or close it at our then prevailing price.
However, we may, at our absolute discretion, allow you to open or, as the case may be, close the Transaction in which case you will
be bound by the opening or closure of such Transaction, notwithstanding that the factors in Term 4(5) were not satisfied.
(5) The factors referred to in Term 4(4) include, but are not limited to, the following:
(a) the quote must be obtained from us by telephone, via our internet dealing platform(s), via our mobile dealing platform or by such
other means as we may from time to time notify to you;
(b) the quote must not be expressed as being given on an “indicative only” or similar basis;
(c) if you obtain the quote by telephone, it must be given by a person who is a dealer employed by us and your offer to open or close
the Transaction must be given during the same telephone conversation in which you obtained the quote and the dealer giving the
quote must not have informed you before you make the offer to open or close the Transaction and that offer has been confirmed as
accepted by us that the quote is no longer valid;
(d) if you obtain the quote electronically via our internet trading platform(s), via our mobile dealing platform or by such other means
as we may from time to time notify to you, your offer to open or close the Transaction must be given while the quote is still valid;
(e) the quote must not be manifestly erroneous;
(f) when you offer to open a Transaction, the number of shares, contracts or other units in respect of which the Transaction is to be
opened must be neither smaller than the Minimum Size nor larger than the Normal Market Size;
(g) when you offer to close part but not all of an open Transaction both the part of the Transaction that you offer to close and the part
that would remain open if we accepted your offer must not be smaller than the Minimum Size;
(h) a Force Majeure event must not have occurred;
(i) when you offer to open a Transaction an Event of Default must not have occurred in respect of you;
(j) the telephone, internet or other electronic conversation in which you offer to open or close the Transaction must not be terminated
before we have received and accepted your offer;
(k) when you offer to open or close any Transaction, the opening of the Transaction must not result in your exceeding any credit or
other limit placed on your dealings; and
(l) subject to Term 4(2), your offer must be given to us during our normal trading hours for the Instrument in respect of which you
offer to open or close the Transaction.
(6) If, upon accepting your offer, we open or close a Transaction that is larger than the Normal Market Size for that Instrument, it
may be subject to special conditions and requirements agreed at the time that you specify the size of Transaction that you wish to
open. We reserve the right to refuse any offer to open or close a Transaction larger than the Normal Market Size. Our quotation for a
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Transaction equal to or greater than Normal Market Size is not guaranteed to be within any specific percentage of any Underlying
Market or related market quotation. We will inform you of the Normal Market Size for a particular Instrument on request.
5. Opening a Transaction
(1) You will open a Transaction by “buying” or “selling”. In this Agreement a Transaction that is opened by “buying” is referred to as a
“Buy” and may also, in our dealings with you, be referred to as “long” or “long position”; a Transaction that is opened by “selling” is
referred to as a “Sell” and may also, in our dealings with you, be referred to as “short” or “short position”.
(2) When you open a Buy, the Opening Level will be the higher figure quoted by us for the Transaction and when you open a Sell,
the Opening Level will be the lower figure quoted by us for the Transaction.
(3) A Transaction must always be made for a specified number of shares, contracts or other units that constitute the underlying
Instrument. Upon accepting a Transaction, we will allocate to it a contract number that will be notified to you upon our confirming
each Transaction under Term 12(7).
(4) Each Transaction opened by you will be binding on you notwithstanding that by opening the Transaction you may have
exceeded any credit or other limit applicable to you or in respect of your dealings with us.
(5) When you open and when you close a Transaction on the basis of the bid/offer prices in the Underlying Market, you will pay us
an amount (the Commission) that is calculated as a percentage of the value of the opening or closing Transaction (as applicable) or
as an amount per equivalent Instrument or Instruments on the Underlying Market or on any other basis agreed between ourselves in
writing. Our Commission terms will be notified in writing to you, however, in the event that we do not notify you of the commission
terms, we will charge the standard commission rate as published on our website or, if no rate is published, 0.3% of the value of the
opening or closing Transaction (as applicable).
(6) Unless we agree otherwise, all sums payable by you pursuant to Term 5(5) upon opening are due and must be paid upon the
Opening Level of your Transaction being determined by us.
6. Multiple Transactions
(1) Where you have opened a Buy in respect of a particular Instrument and you subsequently open a Sell in respect of the same
Instrument, including by an order that is a Stop Order or Limit Order, at a time when the Buy remains open, then unless you instruct
us to the contrary (which includes a Force Open if accepted by us):
(a) if the size of the Sell order is less than the size of the Buy, we will treat the offer to sell as an offer to partly close the Buy to the
extent of the size of the Sell order;
(b) if the size of the Sell order is the same as the size of the Buy, we will treat the offer to sell as an offer to close the Buy entirely;
(c) if the size of the Sell order exceeds the size of the Buy, we will treat the offer to sell as an offer to close the Buy entirely and open
a Sell position equal to the amount of such excess.
(2) Where you have opened a Sell in respect of a particular Instrument and you subsequently open a Buy in respect of the same
Instrument, including by an order that is a Stop Order or Limit Order, at a time when the Sell remains open, then unless you instruct
us to the contrary:
(a) if the size of the Buy order is less than the size of the Sell we will treat the offer to buy as an offer to partly close the Sell to the
extent of the size of the Buy order;
(b) if the size of the Buy order is the same as the size of the Sell we will treat the offer to buy as an offer to close the Sell entirely;
(c) if the size of the Buy order exceeds the size of the Sell we will treat the offer to buy as an offer to close the Sell entirely and open
a Buy position equal to the amount of such excess.
(3) Terms 6(1) and 6(2) do not apply to Limited Risk CFDs.
(4) The Master Netting Agreement will apply to both you and us in relation to all Transactions entered into by you pursuant to this
Agreement and any Product Module.
7. Closing a Transaction
(1) Subject to this Agreement and any requirement we may specify in relation to Linked Transactions, you may close an open
Undated Transaction or any part of such open Undated Transaction at any time.
(2) When you close an Undated Transaction, the Closing Level will be, if you are closing an Undated Buy Transaction, the lower
figure quoted by us and, if you are closing an Undated Sell Transaction, the higher figure quoted by us.
(3) Subject to this Agreement and any requirement we may specify in relation to Linked Transactions, you may close an open Expiry
Transaction or any part of such open Expiry Transaction at any time prior to the Last Dealing Time for that Instrument.
(4) Details of the applicable Last Dealing Time for each Instrument will normally be available in the Contract Details and may be
obtained from our dealers on request. It is your responsibility to make yourself aware of the Last Dealing Time or, as the case may
be, the expiry time for a particular product. Information relating to the Last Dealing Time may also be provided in other information
documents or brochures that we provide.
(5) When you close an Expiry Transaction prior to the Last Dealing Time for the Instrument, the Closing Level will, if the Transaction
is a Buy, be the lower figure quoted by us and if the Transaction is a Sell, the higher figure quoted by us.
(6) If you do not close an Expiry Transaction in respect of an Instrument on or before the Last Dealing Time then, subject to Term
7(7), we will close your Expiry Transaction as soon as we have ascertained the Closing Level of the Expiry Transaction. The Closing
Level of the Expiry Transaction will be (a) the last traded price at or prior to the close or the applicable official closing quotation or
value in the relevant Underlying Market as reported by the relevant exchange, errors and omissions excluded; plus or, as the case
may be, minus (b) any Spread that we apply when such an Expiry Transaction is closed. Details of the Spread that we apply when a
particular Expiry Transaction is closed are set out in the Contract Details and are available on request. You acknowledge that it is
your responsibility to make yourself aware of the Last Dealing Time and of any Spread or Commission that we may apply when you
close an Expiry Transaction.
(7) Where an Expiry Transaction in respect of an Instrument is in excess of the Normal Market Size, or where any number of such
Expiry Transactions are together in excess of the Normal Market Size then any such Expiry Transaction that has not already been
closed by the close of the Underlying Market at the Last Dealing Time will be rolled over automatically to the next contract period,
unless we decide, acting reasonably, to close the Expiry Transaction(s) at the Closing Level. Where we do effect a rollover for any
reason, the original Expiry Transaction will be closed at the Last Dealing Time and become due for settlement and a new Expiry
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Transaction will be created; such closing and opening trades will be on our normal terms.
(8) We may accept instructions from you to automatically roll over your Expiry Transaction(s) to the next contract period, so that they
do not automatically expire. You may ask that we accept instructions in respect of a specific Expiry Transactions or all Expiry
Transactions that you open in future with us. You acknowledge that it is your responsibility to make yourself aware of the next
applicable contract period for a Transaction and that effecting the rollover of a Transaction may result in you incurring losses on your
account. We reserve the right to refuse to rollover a Transaction or Transactions, despite any instruction you have given us, if we
determine, acting reasonably, that to effect a rollover would result in you exceeding any credit or other limit placed on your dealings
(9) You acknowledge that your instructions will become effective only when they have been agreed by us in relation to each Expiry
Transaction. In the absence of the acceptance of any instruction from you, we will be entitled to close out your Expiry Transactions
in accordance with Term 7(6), subject to Term 7(7). For the avoidance of doubt and unless we agree otherwise, any losses resulting
from the closing and re-opening of a Transaction will be due and payable immediately upon the Opening Level of the Transaction
being determined by us.
(10) Our additional rights to void and/or close one or more of your Transactions in specific circumstances are set out in Terms 4(4),
8(1),8(2), 9, 13(1), 15, 18(4), 19, 21 and 23(2).
(11) We reserve the right to aggregate the instructions we receive from our clients to close Transactions. Aggregation means that
we may combine your instruction with those of other clients of ours for execution as a single order. We may combine your instruction
to close with those of other clients if we reasonably believe that this is in the overall best interests of our clients as a whole.
However, on occasions, aggregation may result in you obtaining a less favourable price once your instruction to close has been
(12) Upon closing a Transaction, and subject to any applicable adjustments for interest and dividends in accordance with the
provisions of the relevant Product Module:
(a) you will pay us the difference between the Opening Level of the Transaction and Closing Level of the Transaction multiplied by
the number of units of the Instrument that comprise the Transaction if the Transaction is:
(i) a Sell and the Closing Level of the Transaction is higher than the Opening Level of the Transaction; or
(ii) a Buy and the Closing Level of the Transaction is lower than the Opening Level of the Transaction; and
(b) we will pay you the difference between the Opening Level of the Transaction and the Closing Level of the Transaction multiplied
by the number of units of the Instrument that comprise the Transaction if the Transaction is:
(i) a Sell and the Closing Level of the Transaction is lower than the Opening Level of the Transaction; or
(ii) a Buy and the Closing Level of the Transaction is higher than the Opening Level of the Transaction.
(13) When you close a Transaction you will pay us Commission as set out in Term 5(5).
(14) Unless we agree otherwise, all sums payable by you pursuant to Term 7(12)(a), Term 7(13) and (if not already paid) the
provisions of the relevant Product Module are due immediately upon the Closing Level of your Transaction being determined by us
and will be paid in accordance with Term 14. Sums payable by us pursuant to Term 7(12)(b) will be settled in accordance with Term
8. Dealing procedures
(1) Without prejudice to our right to rely and act on communications from your agent under Term 12(4), we will not be under any duty
to open or close any Transaction or accept and act in accordance with any communication if we reasonably believe that such agent
may be acting in excess of its authority. In the event that we have opened a Transaction before coming to such a belief we may, at
our absolute discretion, either close such a Transaction at our then prevailing price or treat the Transaction as having been void
from the outset. Nothing in this Term 8(1) will be construed as placing us under a duty to enquire about the authority of an agent
who purports to represent you.
(2) We will not be under any duty to open or close any Transaction if we reasonably believe that to do so may not be practicable or
would infringe any law, rule, regulation or Term. In the event that we have opened a Transaction before coming to such a belief we
may, at our absolute discretion, either close such a Transaction at the then prevailing bid price (in the case of Sell Transactions) or
offer price (in the case of Buy Transactions) or treat the Transaction as having been void from the outset.
(3) In the event that a situation arises that is not covered under these Terms or the Contract Details, we will resolve the matter on
the basis of good faith and fairness and, where appropriate, by taking such action as is consistent with market practice.
9. Manifest Error
(1) We reserve the right to void from the outset any Transaction containing or based on any error that we reasonably believe to be
obvious or palpable (a “Manifest Error”) or to amend the terms of any such Transaction to what we reasonably believe, at our
discretion, would have been fair at the time it was entered into. In deciding whether an error is a Manifest Error we may take into
account any relevant information including, without limitation, the state of the Underlying Market at the time of the error or any error
in, or lack of clarity of, any information source or pronouncement. Any financial commitment that you have entered into or refrained
from entering into in reliance on a Transaction with us will not be taken into account in deciding whether or not there has been a
(2) In the absence of our fraud, wilful default or negligence, we will not be liable to you for any loss, cost, claim, demand or expense
following a Manifest Error. In the event that a Manifest Error is made by any information source, commentator or official on whom we
reasonably rely, we will not be liable to you, in the absence of our fraud, wilful default or negligence, for any loss, cost, claim,
demand or expense.
10. Non-Guaranteed Stop Orders and Limit Orders
(1) We may, at our absolute discretion accept an instruction (a “Stop Order” or a “Limit Order”) from you to open or close a
Transaction at a specified level. You may specify that such an offer is to apply:
(a) until the next close of business for the relevant Underlying Market or earlier (a “Day Order”), which, for the avoidance of doubt,
will exclude any overnight trading sessions on the Underlying Market. Please note that a Day Order can only be placed if the order is
placed by telephone; or
(b) until a time specified by you anytime during the twenty four (24) hours following your placement of the order; or
(c) for an indefinite period (a “Good Till Cancelled Order” or “GTC Order”), which, for the avoidance of doubt, will include any
overnight trading sessions on the Underlying Market.
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We may, at our absolute discretion, accept standing offers that will apply for some other specified duration. You acknowledge that
Stop Orders and Limit Orders may not be available on all of our dealing platforms and that we may act on any such order
irrespective of the length of time for which the specified level in relation to that order is reached or exceeded.
(2) The details of how a Stop Order or Limit Order (“Order”) will be executed are set out in the relevant Product Module together with
further details about how Orders may be aggregated with other customer Orders. You should be sure that you are fully aware of
(3) You acknowledge that when you place and we accept a Stop Order or Limit Order you are dealing with us as principal and not
dealing on the Underlying Market. You further acknowledge that while we will seek to execute your Order based on the level that
might have been achieved had an equivalent order been placed on the Underlying Market, it may not be possible to determine what
that level might have been. Accordingly, we do not guarantee that your order will be executed at any such level and you
acknowledge that the time and level at which Orders are executed will be determined by us, acting reasonably.
(4) You may, with our prior consent (and such consent will not be unreasonably withheld), cancel or amend the level of a Stop Order
or Limit Order at any time before our quote or the relevant Underlying Market quotation reaches or goes beyond the relevant level.
However, once the level has been reached, you may not cancel or amend the level of the Order unless we expressly agree to permit
you to do so.
(5) If you open a Transaction and place a Stop Order or Limit Order that is nominated against that Transaction then:
(a) if, when that Stop Order or Limit Order was executed, it would be capable of closing or partly closing that Transaction and you
subsequently offer to close that Transaction prior to the level of the Stop Order or Limit Order being reached, we will treat that
as a request to cancel the associated Stop Order or Limit Order. You acknowledge that it is your responsibility to inform us,
when you close a Transaction, whether you wish an associated Stop Order or Limit Order to remain valid, and that, unless
otherwise agreed by us, the Stop Order(s) or Limit Order(s) will be cancelled;
(b) if the Transaction is only partially closed by you then the Stop Order or Limit Order associated with that Transaction, adjusted
to the size of the Transaction that remains open, will remain in full force and effect; and
(c) if the Transaction is an Expiry Transaction and the Stop or Limit Order nominated against that Expiry Transaction is stipulated
by you as being at a certain point in relation to the opening level of the Expiry Transaction, then the Stop or Limit Order will be
fixed at that specified level at the first opening time and date of that Expiry Transaction and will not be adjusted subsequently
following any rollover of the Expiry Transaction.
(6) For the purposes of determining whether any of the conditions that would require us to act on a Stop Order or a Limit Order have
been satisfied, we will be entitled (but not obliged), at our discretion, to disregard any prices in the Underlying Market during any pre-
market, post-market or intra-day auction period, during any intra-day or other period of suspension, or during any other period that in
our reasonable opinion may give rise to short-term price distortions.
(7) We reserve the right both to work and to aggregate Stop Orders. Working the Order may mean that your Stop Order is executed
in tranches at different bid prices (in the case of an order to Sell) or offer prices (in the case of an order to Buy), resulting in an
aggregate opening or closing level for your Transaction that may differ both from your specified level and from the price that would
have been attained if the Stop Order had been executed in a single tranche. Aggregating an Order means that we may combine
your order with the orders of other clients of ours for execution as a single order. We may combine your Orders with those of other
clients if we reasonably believe that this is in the overall best interests of our clients as a whole. However, on occasions, aggregation
may result in you obtaining a less favourable price once your Stop Order is executed.
11. Limited Risk
(1) You may request us to open a “Limited Risk” Transaction and ask for a specific stop level to apply to such Limited Risk
Transaction. We may, at our absolute discretion, agree to open a Limited Risk Transaction for you and both you and we must agree
the specific stop level to apply to that Transaction. The level you and we agree may differ according to conditions in the Underlying
Market and/or the size of your Transaction.
(2) Unless a Limited Risk Transaction has previously been closed in accordance with this Agreement, we guarantee that, when the
bid (in the case of Sell Transactions) or offer (in the case of Buy Transactions) on the relevant Underlying Market reaches or goes
beyond the level specified by you, we will close a Limited Risk Transaction at exactly the agreed stop level. In the event that a
guaranteed stop on a long position is triggered as a result of a stock going ex-dividend (and any consequent price adjustment made
by us pursuant to the Product Module or otherwise), where the notional dividend is credited to your account we reserve the right to
deduct part or all of that notional dividend credit from your account, or, in the event that a notional dividend credit has yet to be
made, to reduce the notional dividend credit made to you.
(3) Once you have opened a Limited Risk Transaction, you may only change the level at which the Transaction will be automatically
closed with our consent (which we may, at our absolute discretion, withhold) and upon payment of any additional Limited Risk
Premium that may be required.
(4) Where you open a Limited Risk Transaction in respect of a particular Instrument and specified period that is (i) a Buy and you
subsequently offer to sell in respect of the same Instrument and period; or (ii) a Sell and you subsequently offer to buy in respect of
the same Instrument and period, we may, in the absence of clear instructions from you, treat the offer to sell or, as the case may be,
buy, as an offer to close all or any part of the Limited Risk Transaction or as an offer to open a new Transaction.
(5) When you open a Limited Risk Transaction, you will pay us both the opening and the closing Spread and an additional Limited
Risk Premium when you open the position for spread-based Transactions; for Commission-based transactions, you will pay us the
opening Commission and the additional Limited Risk Premium when you open the Transaction, and will pay the closing Commission
when the Transaction is closed. If we, at our absolute discretion, agree to change a Transaction to a Limited Risk Transaction for
you, you will pay us an additional Limited Risk Premium. The Limited Risk Premium will be as set out in the Contract Details or as
agreed between you and us or otherwise notified to you or, if no such amount is specified to you, it will be 0.3% of the underlying
(6) Unless we agree otherwise, all sums payable by you pursuant to Term 11(5) are due and must be paid immediately upon the
Opening Level of your Transaction being determined by us.
(1) An offer to open or close a Transaction (including a Stop Order, a Limit Order or an Opening Order) must be made by you, or on
your behalf: orally, either by telephone or in person; via our internet dealing platform(s); via our mobile dealing platform; or in such
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other manner as we may specify from time to time. Written offers to open or close a Transaction, including offers sent by fax, e-mail
or text message, will not be accepted. Any communication that is not an offer to open or close a Transaction must be made by you,
or on your behalf: orally, by telephone or in person; in writing, by e-mail, post, fax; or in such other manner as we may specify from
time to time. If sent to us by post or by fax, a communication must be sent to our head office and, if sent to us by e-mail, it must be
sent to an e-mail address currently designated by us for that particular purpose. Any such communication will only be deemed to
have been received by us upon our actual receipt thereof.
(2) If we receive an offer to open or close a Transaction other than in accordance with Term 12(1), we will only accept and act on
such offer at our absolute discretion and will not be responsible for any loss, damage or cost that you suffer or incur arising out of
any error, delay or omission in acting on such offer.
(3) If at any time you are unable, for whatever reason, to communicate with us, we do not receive any communication sent by you,
or you do not receive any communication sent by us under this Agreement, we will not:
(a) be responsible for any loss, damage or cost caused to you by any act, error delay or omission resulting therefrom where such
loss, damage or cost is a result of your inability to open a Transaction; and
(b) except where your inability to communicate with us results from our fraud, wilful default or negligence, be responsible for any
loss, damage or cost caused to you by any act, error, omission or delay resulting therefrom including without limitation, where such
loss, damage or cost is a result of you inability to close a Transaction.
(4) You acknowledge and agree that any communication transmitted by you or on your behalf is made at your risk and you authorise
us to rely and act on, and treat as fully authorised and binding on you, any communication (whether or not in writing) that we
reasonably believe to have been transmitted by you or on your behalf by any agent or intermediary who we reasonably believe to
have been duly authorised by you. You acknowledge that we will rely on your account number and/or password to identify you and
you agree that you will not disclose these details to any person not duly authorised by you. If you suspect that your account number
and/or password has been learnt or may be used by any other person then you must notify us immediately.
(5) You agree that we may record our telephone conversations with you. Such records will be our sole property and you accept that
they will constitute evidence of the communications made.
(6) You agree that in the event of a dispute over any communication (including a dispute as to whether a Transaction was ever
opened), we may close the actual or alleged Transaction in accordance with Term 23(2).
(7) We will confirm each Transaction that we open for you.
(a) If you open or close a Transaction via our internet dealing platform(s), our mobile dealing platform or such other electronic
platform as we may make available to you from time to time, you should receive an on-screen message setting out details of the
transaction. In the event that you believe any of those details to be inaccurate you should contact us as soon as possible and in any
event within one hour of receiving the message. The on-screen message does not constitute our formal confirmation of the
transaction, which we will send to you in writing by e-mail, post or fax. We will also post confirmation of the transaction to the internet
dealing platform(s),where we will provide an updated statement, which will only be accessible by you.
(b) If you open or close a Transaction with us orally, we will confirm the transaction in writing, by e-mail, post, or fax. Any such
confirmation will be e-mailed, posted, or as the case may be, faxed to you or to your order on or before the business day following
the day on which the Transaction is opened or, as the case may be, closed.
(c) You will, in the absence of a Manifest Error, be bound by and deemed to have acknowledged the content of any confirmation
unless you have notified us to the contrary both orally, as soon as possible, and in writing, (i) within one hour of the Transaction or
purported Transaction (in the case of on-screen confirmations) or (ii) within two business days of the day on which you are deemed
to have received the confirmation in accordance with Term 12(9) below. In the event that you think you have opened or closed a
Transaction but we have not sent you a confirmation in respect of that Transaction, any query in relation to the purported
Transaction will not be entertained unless: (i) you inform us within two business days of the day on which you ought to have
received such confirmation that you have not received it; and (ii) you can provide accurate details of the time and date of the
purported Transaction. In the event of any inconsistency between an on-screen message and a subsequent written confirmation of
the same Transaction, we will determine the position reasonably and on the basis of the available evidence.
(d) We will provide you with a statement of your account on a regular basis.
(8) We may communicate with you by telephone, letter, fax, e-mail, text message or telex and you consent to us telephoning you at
any time whatsoever.
(9) All correspondence, documents, written notices, confirmation and statements will be sent or transmitted to you or to your order at
the address, fax number, mobile telephone number, e-mail address or telex number specified on your account opening form or to
such other address or number as you may subsequently notify to us. Any correspondence, document, written notice, confirmation or
statement will be deemed to have been properly given:
(a) if sent by post to the address last notified by you to us, on the next business day after being deposited in the post;
(b) if delivered to the address last notified by you to us, immediately on being deposited at such address;
(c) if sent by fax, text message or telex, as soon as we have transmitted it to any of the fax, mobile telephone or telex numbers last
notified by you to us; and
(d) if sent by e-mail, one hour after we have transmitted it to the e-mail address last notified by you to us.
(10) It is your responsibility to ensure, at all times, that we have been notified of your current and correct address and contact
details. Any change to your address or contact details must be notified to us immediately in writing, unless we agree to another form
(11) Although e-mail, the internet and other forms of electronic communication are often a reliable way to communicate, no
electronic system is entirely reliable or always available. You acknowledge and accept that a failure or delay by you to receive any
communication from us sent by e-mail, text message or otherwise whether due to mechanical, software, computer,
telecommunications or other electronic systems failure, does not in any way invalidate or otherwise prejudice that communication or
any transaction to which it relates. We will not be liable to you for any loss or damage, howsoever caused, arising directly or
indirectly out of a failure or delay by you or us to receive an e-mail or other electronic communication. Further, you understand and
accept that e-mails, text messages and other electronic communications we send to you may not be encrypted and therefore may
not be secure.
(12) You acknowledge the inherent risk that communications by electronic means may not reach their intended destination or may
do so later than intended for reasons outside our control. You accept this risk and agree that a failure or delay by us to receive any
offer or communication from you sent electronically, whether due to mechanical, software, computer, telecommunications or other
electronic systems failure, does not in any way invalidate or otherwise prejudice that offer or communication or any transaction to
which it relates. If, for any reason, we are unable to accept your offer electronically, we may, without obligation, provide you with
further information advising you that your offer can be made by telephone as an alternative and we may endeavour to inform you of
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(13) In the event that you are granted access to our mobile dealing platform and/or our Online Service (which, for the avoidance of
doubt, provides authorised users with direct market access and is separate from the general quote and offer facility provided via our
internet dealing platform(s)), then all use of such service(s) will be subject both to this Agreement and to supplemental mobile
dealing and/or electronic trading terms issued by us from time to time.
(1) From time to time we may require you to provide margin payments, which, other than with our express prior consent, will only be
provided in the form of cleared funds (in our bank account) unless, by separate written agreement, we accept other assets from you
as collateral for payment of margin. If assets other than cash are accepted, we will be entitled to realise such assets, in
circumstances as defined in the separate agreement. In the event that any applicable debit card authority or other paying agent
declines to transfer funds to us for any reason whatsoever then we may, at our absolute discretion, treat any Transaction entered
into by us in reliance on receipt of those funds as void from the outset or close it at our then prevailing price, and recover any losses
arising from the voidance or closure of the Transaction from you. We may reserve the right to stipulate the method of payment to be
used by you.
(2) In making any calculation of the margin payments that we require from you under this Term 13, we may, at our absolute
discretion, have regard to your overall position with us including your position in other accounts held with us or with an Associated
Company of ours or any part thereof including any of your net unrealised losses (i.e. losses on open positions). We will also have
regard to the rules of any Underlying Market that requires payments of margin to be made in respect of any Transaction or any
Instrument underlying any Transaction.
(3) If a written demand is delivered to you or sent by post, fax, e-mail, text message or telex, it will be deemed to have been made
as soon as you are deemed to have received such notice in accordance with Term 12(9). We will also be deemed to have made a
demand on you if: (a) we have left a message requesting you to contact us and you have not done so within a reasonable time after
we have left such a message; or (b) if we are unable to leave such a message and have used reasonable endeavours to attempt to
contact you by telephone (at the telephone number last notified to us by you) but have been unable to contact you at such number.
Any message that we leave for you requesting you to contact us should be regarded by you as extremely urgent unless we specify
to the contrary when we leave the message. You acknowledge and accept that what constitutes a reasonable time in the context of
Term 13 may be influenced by the state of the Underlying Market and that, according to the circumstances, that could be a matter of
minutes or even immediately.
(4) It is your responsibility to notify us immediately of any change in your contact details and to provide us with alternative contact
details and ensure that our calls for margin will be met if you will be uncontactable at the contact address or telephone number
notified to us (for example because you are travelling or are on holiday). We will not be liable for any losses, costs, expenses or
damages incurred or suffered by you as a consequence of your failure to do so.
(5) Unless otherwise agreed by us, on the business day on which you open a Transaction you will pay us the required margin for
that Transaction, as calculated by us. This amount is due and payable immediately upon opening the Transaction. Details of how
the continuing margin requirements will be calculated by us will be set out in the Contract Details and may be obtained from our
dealers on request. You acknowledge that it is your responsibility to be aware of the margin required at all times for all Transactions
that you open with us.
(6) We may agree to reduce or waive all or part of the margin that we would otherwise require you to pay us in respect of a
Transaction and we may agree to permit you to withdraw all or part of any margin previously paid to us by you in respect of a
Transaction. If we agree to such a reduction, waiver or permission to withdraw margin, we may nevertheless require you to pay us
further margin in respect of that Transaction at any time thereafter. Unless otherwise agreed, we will be entitled, at any time, to
increase the margin required from you on open Transactions. Any such increase will be due and payable immediately on our
demand, including our deemed demand in accordance with Term 13(3).
(7) Where, following a deposit or margin call becoming due, positive movements in your positions result in you no longer being
marginable, we may, at our absolute discretion, deem that deposit or margin call to have been satisfied.
14. Payment and set-off
(1) All payments to be made under this Agreement (other than payments under Terms 11(6) and 13(5) that are due and payable in
accordance with those Terms respectively) are due immediately on our oral or written demand. All payments must be paid by you,
and must be received in full by us for value, by (a) where the demand is made before 12 noon on any day, not later than 12.00
midday on the business day following the day on which our demand (including our deemed demand in accordance with Term 13(3))
is made; or (b) where the demand is made after 12.00 midday on any day, not later than 4.00 pm on the business day following the
day on which our demand (including our deemed demand in accordance with Term 13(3)) is made. For the avoidance of doubt,
these timeframes are subject to the rules of any Underlying Market that have been advised to you by us in the event that the
Underlying Market requires payment of margin to be made sooner.
(2) Subject to Term 14(2)(b) below, you may make any payment to us by debit card, direct debit, or direct bank transfer for value
within 24 hours (e.g. by CHAPS or SWIFT payment). Our failure on one or more occasions to enforce or exercise our right to insist
on immediate payment of margin will not amount to a waiver or bar to enforcement of that right. If we accept any payment(s) due
under this Agreement or in relation to any Transaction by credit card, we reserve the right to levy an administrative charge.
(a) At our discretion, we may accept payments from you made by cheque. Cheques should be crossed and made payable to IG
Markets Limited or such other payee as we may notify you of and your account number should be marked clearly on the reverse.
Cheques presented in settlement of margin requirements will, unless otherwise agreed, be drawn on a United Kingdom clearing
bank. Where you make a margin payment by cheque, we may decline to treat such payment of margin as having been made for the
purposes of Term 15(1) until we have received cleared funds in our bank account.
(b) We reserve the right to require payments of £5,000 or more, or other currency equivalent, to be made by direct bank transfer for
value within 24 hours and, at our discretion, to require payments of any amount that falls due to be made by cleared funds in our
bank account on the same day or, in the event that the payment falls due after 12.00 midday and you are unable, despite using all
reasonable efforts to effect payment that day, on the next business day.
(3) Margin payments and any other payments due will, unless otherwise agreed or specified by us, be required in pounds, dollars or
euros. When we consider it necessary, or when requested by you, we may convert money standing to your credit or paid by you to
us in one currency to another currency. Such conversions will be made at an exchange rate within 1% of the prevailing market rate
at the time of the conversion.
(4) Subject to Terms 14(5) and 14(6) and our right to set such sums off against payments of any margin and charges that are
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outstanding, money standing to the credit of your account will be remitted to you if requested by you. Where you do not make such a
request, we will be under no obligation to, but may, at our absolute discretion, remit such monies to you. All bank charges
howsoever arising will, unless otherwise agreed, be for your account. Such monies will be returned to the bank account previously
notified to us by you, other than in exceptional circumstances when we may, at our absolute discretion, consider a suitable
(5) Without prejudice to our right to require payment from you in accordance with Terms 14(1) and (2), we will at any time have the
right to set off any losses incurred in respect of, or any debit balances in, any of your accounts against any sums or other assets
held by us for or to your credit on any other account (including any joint account and any account held with an Associated Company
of ours) in which you may have an interest. If any loss or debit balance exceeds all amounts so held, you must forthwith pay such
excess to us whether demanded or not. You also authorise us to set off sums held by us for or to your credit in a joint account
against losses incurred by the joint account holder. You also authorise us to set off any losses incurred in respect of, or any debit
balances in, any account held by you with an Associated Company of ours against any credit on your account(s) (including a joint
account) with us.
(6) We will be under no obligation to pay any money to you if that would reduce your credit balance (less running losses) to less than
the margin payments required on your open Transactions. Subject thereto and to Terms 14(5) and 15, the money requested by you
will, if you are entitled to it, be sent to you by first class mail not later than the next business day or in such other manner as you and
we may agree.
(7) You will pay interest to us on any sums due in respect of any Transaction that you fail to pay on the due date. Interest will accrue
on a daily basis from the due date until the date on which payment is received in full, at a rate not exceeding 4% above the
applicable central bank’s base rate from time to time and will be payable on demand.
15. Default and default remedies
(1) Each of the following constitutes an “Event of Default”:
(a) your failure to make any payment (including any payment of margin) to us or to any Associated Company of ours in accordance
with Term 14;
(b) your failure to perform any obligation due to us;
(c) where any Transaction or combination of Transactions or any realised or unrealised losses on any Transactions or combination
of Transactions opened by you results in your exceeding any credit or other limit placed on your dealings;
(d) if you are an individual, your death;
(e) the initiation by a third party of proceedings for your bankruptcy (if you are an individual) or for your winding-up or for the
appointment of an administrator or receiver in respect of you or any of your assets (if you are a company) or (in both cases) if you
make an arrangement or composition with your creditors or any other similar or analogous procedure is commenced in respect of
(f) where any representation or warranty made by you in Terms 18 and 19 is or becomes untrue;
(g) you are or become unable to pay your debts as and when they fall due; or
(h) any other circumstance where we reasonably believe that it is necessary or desirable to take any action in accordance with Term
15 (2) to protect ourselves or all or any of our other clients.
(2) If an Event of Default occurs in relation to your account(s) with us or in relation to any account(s) held by you with an Associated
Company of ours, we may, at our absolute discretion, at any time and without prior notice:
(a) close all or any of your Transactions at a Closing Level based on the then prevailing quotations or prices in the relevant markets
or, if none, at such levels as we consider fair and reasonable;
(b) exercise rights of set-off under Term 14(5), retain any funds, investments (including any interest or other payment payable
thereon) or other assets due to you, and sell them without notice to you at such price and in such manner as we, acting reasonably,
decide, applying the proceeds of sale and discharging the costs of sale and the sums secured under this Term;
(c) charge you interest on any money due, from close of business on the date when monies first fell due until the date of actual
payment at a rate not exceeding 4% above the applicable central bank’s base rate from time to time;
(d) if you have failed to make a payment when due, inform your partner, employer, any professional, regulatory or other organisation
with which you are associated or any person who we believe to have an interest in knowing such facts of the amount of such
overdue sum, the circumstances thereof, the fact that you have failed to make payment, and any other relevant facts or information.
By entering into this Agreement you expressly consent to any disclosure of this data by us in the circumstances set out herein;
(e) close all or any of your accounts held with us of whatever nature and refuse to enter into further Transactions with you.
(3) If we take any action under Term 15(2), unless at our absolute discretion we consider it necessary or desirable to do so without
prior notice by you, we will, where reasonably possible, take steps to advise you before exercising such rights. However, any failure
on our part to take such steps will not invalidate the action taken by us under Term 15(2).
(4) Subject to the FSA Rules and at our absolute discretion we may, in the event of your failing to meet a demand for margin or your
being in excess of any credit limit placed on your account, allow you to continue to trade with us, or allow your open Transactions to
remain open, but this will depend on our assessment of your financial circumstances.
(5) You acknowledge that, if we agree to allow you to continue to trade or to allow your open Transactions to remain open under
Term 15(4), this may result in your incurring further losses.
(6) You acknowledge and agree that, in closing out Transactions under this Term 15, it may be necessary for us to ‘work’ the order.
This may have the result that your Transaction is closed out in tranches at different bid prices (in the case of Sells) or offer prices (in
the case of Buys), resulting in an aggregate closing level for your Transaction that results in further losses being incurred on your
16. Client Money
(1) Any money received from you will be held by us in a non-segregated account unless otherwise specified or required by the FSA
Client Money Rules.
(2) Where your money is held in a segregated account and unless you have notified us in writing to the contrary, we may hold client
money on your behalf with an approved bank in a client bank account located outside the United Kingdom or pass money held on
your behalf to an intermediate broker, settlement agent or OTC counterparty located outside the United Kingdom. The legal and
regulatory regime applying to any such approved bank or person will be different from that of the United Kingdom and in the event of
the insolvency or any other equivalent failure of that approved bank or person, your money may be treated differently from the
treatment which would apply if the money was held with an approved bank in an account in the United Kingdom. We will not be
liable for the solvency, acts or omissions of any third party referred to in this sub-clause.
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(3) It is not our policy to pay interest to you on any of your money that we hold and by entering into this Agreement you acknowledge
that you are therefore waiving any entitlement to interest under the FSA Client Money Rules or otherwise.
(4) Where your money is held in a segregated account, you agree that, in the event that there has been no movement on your
account balance for a period of at least six years (notwithstanding any payments or receipts of charges, interest or similar items) and
we are unable to trace you despite having taken reasonable steps to do so, we may release any client money balances from the
17. Indemnity and liability
(1) Subject always to Term 1(3), you will indemnify us, and keep us indemnified on demand, in respect of all liabilities, losses or
costs of any kind or nature whatsoever that may be incurred by us as a direct or indirect result of any failure by you to perform any of
your obligations under this Agreement, in relation to any Transaction or in relation to any false information or declaration made either
to us or to any third party, in particular to any Exchange.
(2) You will take all reasonable steps to ensure that no computer viruses, worms, software bombs or similar items are introduced
into the computer hardware or software you use to access our website(s).
(3) To the extent permitted by law, you will indemnify, protect and hold us harmless from and against all losses, liabilities,
judgements, suits, actions, proceedings, claims, damages and/or costs resulting from or arising out of any act or omission by any
person obtaining access to your account by using your designated account number and/or password, whether or not you authorised
(4) Without prejudice to any other Terms of this Agreement, we will have no liability to you in relation to any loss that you suffer as a
result of any delay or defect in or failure of the whole or any part of our website(s) or any systems or network links or any other
means of communication. We will have no liability to you, whether in contract or in tort (including negligence) in the event that any
computer viruses, worms, software bombs or similar items are introduced into your computer hardware or software via our
website(s), provided that we have taken reasonable steps to prevent any such introduction.
(5) Unless we are prohibited from excluding such liability by law (for example, for losses relating to death or personal injury or
caused by our fraud), we will not be liable for any direct, indirect, special, incidental, punitive or consequential damages (including,
without limitation, loss of business, loss of profits, failure to avoid a loss, loss of data, loss or corruption of data, loss of goodwill or
reputation) caused by any act or omission of ours under this Agreement.
(6) If and to the extent that we are found liable for any losses or damages in relation to a Transaction then, unless we are prohibited
from limiting such liability by law, the maximum amount of our liability will be limited to four times the amount of Commission or
Spread paid or payable by you in respect of that Transaction.
18. Representations and warranties
(1) You represent and warrant to us, and agree that each such representation and warranty is deemed repeated each time you open
or close a Transaction by reference to the circumstances prevailing at such time, that:
(a) the information provided to us in your application form and at any time thereafter is true and accurate in all respects;
(b) you are duly authorised to execute and deliver this Agreement, to open each Transaction and to perform your obligations
hereunder and thereunder and have taken all necessary action to authorise such execution, delivery and performance;
(c) you will enter into this Agreement and open each Transaction as principal;
(d) any person representing you in opening or closing a Transaction will have been, and (if you are a company) the person entering
into this Agreement on your behalf is, duly authorised to do so on your behalf;
(e) you have obtained all governmental or other authorisations and consents required by you in connection with this Agreement and
in connection with opening or closing Transactions and such authorisations and consents are in full force and effect and all of their
conditions have been and will be complied with;
(f) execution, delivery and performance of this Agreement and each Transaction will not violate any law, ordinance, charter, by-law
or rule applicable to you, the jurisdiction in which you are resident, or any agreement by which you are bound or by which any of
your assets are affected; and
(g) other than in exceptional circumstances, you will not send funds to your account(s) with us from, or request that funds be sent
from your account(s) to, a bank account other than that identified in your account opening form or as otherwise agreed by us.
Whether exceptional circumstances exist will be determined by us from time to time.
(2) This Agreement contains the entire understanding between the parties in relation to the dealing services we offer. Any
amendment to this Agreement must be in writing and signed on behalf of the parties by you and by an authorised person on our
(3) In the absence of our fraud, wilful default or negligence, we give no warranty regarding the performance of our website(s), our
internet dealing or other software or their suitability for any equipment used by you for any particular purpose.
(4) Any breach by you of the warranties in Term 18(1) above renders any Transaction voidable from the outset or capable of being
closed by us at our then prevailing prices, at our absolute discretion.
19. Market abuse
(1) We will frequently hedge our liability to you by opening analogous positions with other institutions. The result of our doing this is
that when you open or close a Transaction relating to a share or other Instrument with us, your Transactions can, through our
hedging, exert a distorting influence on the Underlying Market for that Instrument, in addition to the impact that it may have on our
own prices. This creates a possibility of market abuse and the function of this Term is to prevent such abuse.
(2) You represent and warrant to us now, and agree that each such representation and warranty is deemed repeated each time you
open or close a Transaction, that:
(a) you will not open and have not opened a Transaction or Transactions with us relating to a particular share price if to do so would
result in you, or others with whom you are acting in concert together, having an exposure to the share price that is equal to or
exceeds the amount of a declarable interest in the relevant company. For this purpose the level of a declarable interest will be the
prevailing level at the material time, set by the stock exchange(s) on which the underlying share is listed;
(b) you will not open and have not opened a Transaction with us in connection with:
(i) a placing, issue, distribution or other analogous event; or
(ii) an offer, take-over, merger or other analogous event,
in which you are involved or otherwise interested; and
(c) you will not open and have not opened a Transaction that contravenes any primary or secondary legislation or other law against
insider dealing. For the purposes of this clause you agree that we may proceed on the basis that when you open or close a
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Transaction with us on a share price, you may be treated as dealing in securities within the meaning of Part V of the Criminal Justice
(3) In the event that (i) you open any Transaction in breach of the representations and warranties given in Term 19(1) above, or (ii)
we have reasonable grounds for suspecting that you have done so, we may, at our absolute discretion and without being under any
obligation to inform you of our reason for doing so, close that Transaction and any other Transactions that you may have open at the
time and also, at our absolute discretion:
(a) enforce the Transaction or Transactions against you if it is a Transaction or Transactions under which you have incurred a loss;
(b) treat all your Transactions closed under this clause as void if they are Transactions under which you have secured a profit,
unless and until you produce conclusive evidence that you have not, in fact, committed the breach of warranty and/or
misrepresentation the suspicion of which was the ground for closing your Transaction(s). For the avoidance of doubt, if you do not
produce such evidence within the period of six months from the date on which such Transaction was opened, all such Transactions
will be finally null and void as between you and us.
(4) You acknowledge that the Transactions in which you deal with us are speculative instruments and you agree that you will not
open any Transactions with us in connection with any corporate finance style activity.
Details of any credit arrangement that may be available to you are or will be set out in, and will be subject to, such terms, conditions
and limits as may be agreed in separate correspondence. We reserve the right to alter any credit arrangements agreed with you at
21. Force Majeure Events
(1) We may, in our reasonable opinion, determine that an emergency or an exceptional market condition exists (a “Force Majeure
Event”), in which case we will, in due course, inform the FSA and take reasonable steps to inform you. A Force Majeure Event will
include, but is not limited to, the following:
(a) any act, event or occurrence (including without limitation any strike, riot or civil commotion, industrial action, acts and regulations
of any governmental or supra national bodies or authorities) that, in our opinion, prevents us from maintaining an orderly market in
one or more of the Instruments in respect of which we ordinarily deal in Transactions;
(b) the suspension or closure of any market or the abandonment or failure of any event on which we base, or to which we in any way
relate, our quote, or the imposition of limits or special or unusual terms on the trading in any such market or on any such event;
(c) the occurrence of an excessive movement in the level of any Transaction and/or the Underlying Market or our anticipation (acting
reasonably) of the occurrence of such a movement;
(d) any breakdown or failure of transmission, communication or computer facilities, interruption of power supply, or electronic or
communications equipment failure;
(e) failure of any relevant supplier, intermediate broker, agent or principal of ours, custodian, sub-custodian, dealer, exchange,
clearing house or regulatory or self-regulatory organisation, for any reason, to perform its obligations.
(2) If we determine that a Force Majeure Event exists, we may, at our absolute discretion, without notice and at any time, take one
or more of the following steps:
(a) increase your margin requirements;
(b) close all or any of your open Transactions at such Closing Level as we reasonably believe to be appropriate;
(c) suspend or modify the application of all or any of the Terms of this Agreement to the extent that the Force Majeure Event makes
it impossible or impracticable for us to comply with the Term or Terms in question; or
(d) alter the Last Dealing Time for a particular Transaction.
22. Suspension and insolvency
(1) If at any time trading on the Underlying Market is suspended in any Instrument that forms the subject of a Transaction then the
value of the contract unless re-valued by us as set out in this Term 22, for the purposes of margining and otherwise, will be the
midprice quoted by us at the time of suspension.
(2) In the event that the suspension continues for five business days, we may at our discretion impose a closing date at any time
during the suspension and a Closing Level, which will be the Closing Level of that Transaction. If we do not impose a closing date
and Closing Level then the Transaction, irrespective of whether it is an Expiry Transaction and the date of contract expiry passes
and irrespective of any Stop Orders or Limit Orders given by you, will remain open until such time as the suspension is terminated or
until, where the Instrument is in respect of a company, that company goes into insolvency or is otherwise dissolved. If it is an Expiry
Transaction you will be deemed to have requested that the Transaction be rolled forward into the next contract period until the first
expiry date following the lifting of the suspension unless, as noted above, the Transaction is in respect of a company and that
company goes into external administration or similar.
(3) We reserve the right at all times during the term of a Transaction where the underlying Instrument is suspended to revalue such
Transaction at such price and/or to change the margin rate, in both cases as we shall determine to be reasonable in the
circumstances and to require payment of deposit or margin accordingly. If the Transaction remains open until such time as the
suspension is terminated, which, for the avoidance of doubt, can occur without warning or notice to us, any Orders that you may
have given us with respect to that Transaction will be executed as soon as is reasonable in the circumstances. We cannot
guarantee that Orders will be executed at the first available Underlying Market price.
(4) If a company, whose Instrument represents all or part of the subject-matter of a Transaction, goes into insolvency or is otherwise
dissolved, the day on which the company goes into insolvency or is otherwise dissolved will be the closing date of that Transaction.
The Closing Level will be the value of any distribution a holder of a security of the same type as the Instrument underlying the
Transaction would receive.
23. Queries, complaints and disputes
(1) If you have a complaint against us, you should advise our Customer Services Department of the complaint immediately. We will
investigate the complaint promptly and fully in accordance with our complaints handling procedure. A copy of our complaints
handling procedure may normally be found on our website(s) and is available on request. If you are dissatisfied with the result of our
investigation or with any action taken by us as a result thereof, you may refer the complaint to our Compliance Department for
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(2) Without prejudice to any of our other rights to close a Transaction under this Agreement, in any case where we are in dispute
with you in respect of a Transaction or alleged Transaction or any communication relating to a Transaction, we may, at our absolute
discretion and without notice, close any such Transaction or alleged Transaction, where we reasonably believe such action to be
desirable for the purpose of limiting the maximum amount involved in the dispute, and we will not be under any obligation to you in
connection with any subsequent movement in the level of the Transaction concerned. If we close one or more of your Transactions
under this Term, such action will be without prejudice to our right to contend in relation to any dispute that such Transaction had
already been closed by us or was never opened by you. We will take reasonable steps to inform you that we have taken such action
as soon as practicable after doing so. Where we close a Transaction or alleged Transaction in accordance with this Term, the
closing will be without prejudice to your rights:
(a) to seek redress or compensation for any loss or damage suffered in connection with the disputed or alleged Transaction or
communication, prior to the closing; and
(b) to open a new Transaction at any time thereafter, provided that such Transaction is opened in accordance with this Agreement,
which will be applied, for the purposes only of calculating any relevant limits or money required from you, on the basis that our view
of the disputed events or communication is correct.
(3) We are covered by the Financial Services Compensation Scheme. You may be entitled to compensation from the scheme if we
cannot meet our obligations. This depends on the type of business and the circumstances of the claim. Most types of investment
business are covered for 100% of the first £30,000 and 90% of the next £20,000, so the maximum compensation is £48,000. Further
information about compensation arrangements is available from the Financial Services Compensation Scheme.
(1) We reserve the right to close or suspend your account at any time.
(2) Our rights and remedies under this Agreement will be cumulative, and our exercise or waiver of any right or remedy will not
preclude or inhibit the exercise of any additional right or remedy. Our failure to enforce or exercise any right under this Agreement
will not amount to a waiver or bar to enforcement of that right.
(3) We may assign the benefit and burden of this Agreement to a third party, in whole or in part, provided that any assignee agrees
to abide by the Terms of this Agreement and subject to the approval of the FSA. Such assignment will come into effect 10 business
days following the day you are deemed to have received notice of the assignment in accordance with Term 12(9). You agree that
you may not assign the benefit and burden of this Agreement, whether in whole or in part, to any third party without our prior written
(4) You acknowledge and agree that the copyrights, trade marks, database and other property or rights in any information distributed
to or received by you from us (including, but not limited to, our prices), together with the contents of our website(s), brochures and
other material connected with our dealing service and in any database that contains or constitutes such information, will remain the
sole and exclusive property of ours or any third party identified as being the owner of such rights.
(5) You agree that you will not permit or facilitate, and will take reasonable steps to prevent, any sale, dissemination, re-distribution
or re-publication of the information referred to in Term 24(4) to any third party.
(6) If any Term (or any part of any Term) is held by a court of competent jurisdiction to be unenforceable for any reason then such
Term will, to that extent, be deemed severable and not form part of this Agreement, but the enforceability of the remainder of this
Agreement will not be affected.
(7) You will be responsible at all times for the payment of all taxes due and for providing any relevant tax authority with any
information relating to your dealings with us. You agree that if we provide you with any information or express any opinion in relation
to the tax treatment of your dealings with us it will not be reasonable for you to rely upon any such statement and it will not constitute
25. Amendment and termination
(1) We may amend this Agreement and any arrangements made hereunder at any time by written notice to you. Such amendments
will come into effect at the time notified to you, or otherwise 10 business days after you are deemed to have received such notice in
accordance with Term 12(9) (unless it is impractical in the circumstances to do so), and will not apply to Transactions opened prior
to such date.
(2) This Agreement and any arrangements hereunder may be suspended or terminated by either party upon giving the other party
written notice of suspension or termination, which will take effect immediately, unless otherwise specified in the notice. Any such
suspension or termination will not affect any obligation that may already have been incurred by either party in respect of any
outstanding Transaction or any legal rights or obligations that may already have arisen under this Agreement or any dealings made
26. Governing law
(1) This Agreement and each Transaction entered into with you is in all respects governed by English law and the courts of England
and Wales will have non-exclusive jurisdiction to settle any disputes that may arise in relation thereto. Nothing in this Term 26 will
prevent us from bringing proceedings against you in any other jurisdiction.
(2) If you are situated outside of England and Wales, process by which any proceedings in England are begun may be served on
you by being delivered to the address provided by you when you opened your account or to any new address subsequently notified
to us. Nothing in this Term affects our right to serve process in another manner permitted by law.
(1) You acknowledge that by opening an account with us and opening or closing Transactions, you will be providing us with personal
information within the meaning of the Data Protection Act 1998. You consent to us processing all such information for the purposes
of performing the contract and administering the relationship between you and us. You consent to our disclosing such information
where we are required to by law and to our disclosing such information to Associated Companies, to the FSA and other regulatory
authorities upon their reasonable request, and to introducing brokers with whom we have a mutual relationship, any of whom may
be either within or outside the European Economic Area.
(2) You authorise us, or our agents acting on our behalf, to carry out such credit and identity checks as we may deem necessary or
desirable, including requesting a reference from your bank from time to time and you agree to assist us, where necessary, in
obtaining such a reference. You acknowledge and agree that this may result in your personal information being sent to our agents,
who may be within or outside the European Economic Area. You agree that we will be permitted, if so required, to furnish relevant
information concerning you or your account to any person who we believe to be seeking a reference or credit reference in good
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(3) You authorise us or our Associated Companies to telephone or otherwise contact you at any reasonable time in order to discuss
any aspect of our business or of our Associated Companies’ business. If you do not wish us or our Associated Companies to so
contact you for any direct marketing activities, you must inform us (or the relevant Associated Company) in writing.
In this Agreement:
“Agreement” means this agreement and all schedules, Product Modules, the Contract Details, any ancillary documents referred to
herein and any amendments thereto. For the avoidance of doubt this agreement supercedes and replaces any previous customer
agreement in force between you and us which dealt with Transactions;
“Associated Company” means any holding company or subsidiary company (as defined in the Companies Act 1985), from time to
time, of ours and/or any subsidiary company of any such holding company;
“business day” means any day other than a Saturday, Sunday and a public holiday in the UK;
“Buy” has the meaning attributed to it in Term 5(1);
“Contract Details” means the section of the public pages of our website designated as the Contract Details as amended from time to
time. If you do not have access to our website a copy of these is available upon request, however, please note that they may
change without notice to you and it is your responsibility to make yourself aware of the current Contract Details, whether by
telephone or otherwise, where they apply to any positions opened or closed by you;
“Closing Level” means the level at which a Transaction is closed;
“Commission” has the meaning attributed to it in Terms 5(5) and 7(9);
“dollars” and “$” denote lawful currency of the United States;
“euros” and “€” denote lawful currency of the Eurozone countries of the European Union;
“Event of Default” has the meaning attributed to it in Term 15(1);
“Expiry Transaction” means a Transaction which has a set contract period, at the end of which the Expiry Transaction expires
“Force Majeure Event” has the meaning attributed to it in Term 21(1);
“Force Open” means a Transaction in respect of a particular Instrument where you already have an open Transaction in respect of
the same Instrument which would ordinarily result in the netting of these two Transactions against each other and the closing or
partial closing of both pursuant to Term 6 of this Agreement and/or the Master Netting Agreement which applies to you; but where
we accept your offer to open the second Transaction without offsetting it against that which preceded it so that two
“FSA” means The Financial Services Authority or any organisation that will replace the FSA or take over the conduct of its affairs;
“FSA Rules” means the rules of the FSA as from time to time varied, amended or substituted by the FSA;
“Instrument” means any stock, share, futures contract, forward or option contract, commodity, precious metal, Exchange Rate,
interest rate, debt instrument, stock or other index, or other investment in respect of which we offer to deal in Transactions;
“Sell” has the meaning attributed to it in Term 5(1);
“Internet conversation” means a conversation between you and us held via our dealing software or the client pages on our
website(s) or such other pages or method as we may specify from time to time;
“Last Dealing Time” means the last day and (as the context requires) time before which a Transaction may be dealt in, as set out in
the Contract Details or otherwise notified to you, or otherwise the last day and (as the context requires) time on which the underlying
Instrument may be dealt in on the relevant Underlying Market;
“Limit Order” has the meaning given to it in Term 10(1) and may be an order to open or to close a Transaction;
“Limited Risk Premium” has the meaning attributed to it in Term 11(5);
“Linked Transactions” means two or more Transactions in respect of which we agree not to call for, or apply, the full amount of
margin as a result of the relationship between such Transactions;
“Manifest Error” has the meaning attributed to it in Term 9(1);
“Market Spread” means the difference between the bid and offer prices for a transaction of equivalent size in a Instrument, or a
related Instrument, in the Underlying Market;
“Master Netting Agreement” means the two-way netting agreement set out at Schedule A to this Agreement regarding all
Transactions entered into by you pursuant to this Agreement that will apply to you and to us and, where applicable, has the specific
meaning set out in the relevant Product Modules;
“Minimum Size” means, in respect of a Transaction in which a Minimum Size applies, the minimum number of shares, contracts or
other units of an Instrument that we will deal on, which in most cases is specified in the Contract Details and, where not so specified,
we will inform you of on request;
“Normal Market Size” means the maximum number of stocks, shares, contracts or other units that we reasonably believe the
Underlying Market to be good in at the relevant time, having regard, if appropriate, to the normal market size set by the London
Stock Exchange or any equivalent or analogous level set by the Underlying Market on which the Instrument is traded;
“Online Service” has the meaning attributed to in Term 12(13) and is currently known as “L2 Dealer”;
“Opening Level” means the level at which a Transaction is opened;
“pounds” and “£” denote lawful currency of the United Kingdom at the date of issue of this Agreement, known as “sterling”;
“Product Module” means a product specific module which forms part of this Agreement and sets out the terms and conditions that
apply to specific types of Transactions and/or Services, and any amendments thereto. If, after your agreement to these Terms, you
are sent a Product Module for a particular Transaction type that you have not traded or been provided with before, then that Product
Module will be effective and binding on you from the date that you first trade or open a Transaction governed by that Product
“Risk Disclosure Notice” means the notice provided by us to you in compliance with FSA Rules regarding the risks associated with
trading Transactions under this Agreement;
“Spread” has the meaning attributed to it in Term 4(1) and may, as the context requires, include Market Spread;
“Stop Order” has the meaning given to it in Term 10(1) and may be an order to open or to close a Transaction;
“Transaction” means a future, option, contract for differences, spot or forward contract of any kind in relation to any Instrument
(including a security) or any combination of Instruments and means either or both Expiry Transactions or Undated Transactions as
the context requires;
“Undated Transaction” means a Transaction with an indefinite contract period that is not capable of expiring automatically;
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“Underlying Market” means the Exchange or other similar body on which a Instrument is traded or trading in that Instrument as the
(2) a reference to:
(a) a Term is a reference to a term of this Agreement;
(b) an Act of Parliament is a reference to such Act as from time to time amended, consolidated or re-enacted (with or without
modification) and includes all instruments or orders made under such enactment;
(c) any time or date will be to the time and date in London, England, unless expressly noted to the contrary; and
(d) the singular will import the plural and the masculine will import the feminine as the context requires.
(3) Priority of documents: in the event of any conflict between the terms of the main body of this Agreement and any Product
Module, Schedule, Appendix or ancillary document referred to in this Agreement, the order of precedence for the purpose of
construction shall be:
(a) Schedule A
(b) Schedule of Supplementary Terms and Conditions (if applicable);
(c) Product Module;
(d) Terms and conditions;
(e) Contract Details;
(f) Any other ancillary documents referred to in this Agreement.
TWO-WAY MASTER NETTING AGREEMENT for Exchange Traded and Related Transactions including all Transactions under the
Margin Trading Customer Agreement
THIS MASTER NETTING AGREEMENT between you and us is entered into as part of and on the same date as your Agreement to
the Margin Trading Customer Agreement, or, if this Schedule did not form part of the Margin Trading Customer Agreement at the
time of your agreement to the same, ten business days following the date you are advised that this Schedule forms part of the
Margin Trading Customer Agreement.
NOW IT IS HEREBY AGREED as follows:
1. Scope of this Agreement
1.1 Unless otherwise agreed in writing by the Parties in Schedule 1 or otherwise and subject to the next sentence, these
terms and the particular terms agreed by the Parties govern each Transaction entered into or outstanding between any two
Designated Offices of the Parties on or after the date of execution of these terms. In the case of Transactions within paragraph (i),
(ii), (iii) or (iv) of the definition of "Transaction", these terms govern only those Transactions where the exchange mentioned in such
definition is a Specified Exchange.
1.2 These terms, the particular terms of, and applicable to, each and every Transaction governed by these terms, the
Schedules to these terms and all amendments to any of such items shall together constitute a single agreement between the
Parties. The Parties acknowledge that all Transactions governed by these terms which are entered into on or after the date of
execution of these terms are entered into in reliance upon the fact that all such items constitute a single agreement between the
2. Settlement and Exchange or Clearing Organisation Rules
2.1 Unless a Liquidation Date has occurred or has been effectively set, a Party shall not be obliged to make any payment or
delivery scheduled to be made by that Party under a Transaction governed by these terms for so long as an Event of Default or
Potential Event of Default with respect to the other Party has occurred and is continuing.
2.2 Unless otherwise agreed in writing by the Parties, if the Parties enter into any Transaction governed by these terms to
close out any existing Transaction between the Parties then their obligations under such Transactions shall automatically and
immediately be terminated upon entering into the second Transaction, except for any settlement payment due from one Party to the
other in respect of such closed-out Transactions.
2.3 These terms shall not be applicable to any Transaction to the extent that action which conflicts with or overrides the
provisions of this agreement has been started in relation to that Transaction by a relevant exchange or clearing organisation under
applicable rules or laws and is continuing.
3. Representations, Warranties and Covenants
3.1 Each Party represents and warrants to the other Party as of the date of execution of these terms and, in the case of the
representation and warranty in (v) of this Clause 3.1 relating to the entering into of Transactions, as of the date of entering into each
Transaction governed by these terms that: (i) it has authority to enter into this agreement; (ii) the persons entering into the
agreement on its behalf have been duly authorised to do so; (iii) this agreement and the obligations created under this agreement
are binding upon it and enforceable against it in accordance with their terms (subject to applicable principles of equity) and do not
and will not violate the terms of any agreements to which such Party is bound; (iv) no Event of Default or Potential Event of Default
has occurred and is continuing with respect to it; and (v) it acts as principal and sole beneficial owner (and not as trustee) in entering
into these terms and each and every Transaction governed by these terms.
3.2 Each Party covenants to the other Party that: (i) it will at all times obtain and comply with the terms of and do all that is
necessary to maintain in full force and effect all authorisations, approvals, licences and consents required to enable it lawfully to
perform its obligations under this agreement; and (ii) it will promptly notify the other Party of the occurrence of any Event of Default
Final version 47
or Potential Event of Default with respect to itself or any Credit Support Provider in relation to it.
4. Termination and Liquidation
4.1 If, at any time:
(i) a Party fails to make any payment when due under or to make or take delivery of any property when due under, or to
observe or perform any other provision of, this agreement (including any Transaction governed by these terms) and such failure
continues for two business days after notice of non-performance has been given by the other Party to the defaulting Party;
(ii) a Party commences a voluntary case or other procedure seeking or proposing liquidation, reorganisation, an
arrangement or composition, a freeze or moratorium, or other similar relief with respect to itself or to its debts under any bankruptcy,
insolvency, regulatory, supervisory or similar law (including any corporate or other law with potential application to an insolvent
Party), or seeking the appointment of a trustee, receiver, liquidator, conservator, administrator, custodian, examiner or other similar
official (each a "Custodian") of it or any part of its assets; or takes any corporate action to authorise any of the foregoing; and, in the
case of a reorganisation, arrangement or composition, the other Party does not consent to the proposals;
(iii) an involuntary case or other procedure is commenced against a Party seeking or proposing liquidation, reorganisation,
an arrangement or composition, a freeze or moratorium, or other similar relief with respect to it or its debts under any bankruptcy,
insolvency, regulatory, supervisory or similar law (including any corporate or other law with potential application to an insolvent
Party) or seeking the appointment of a Custodian of it or any part of its assets and such involuntary case or other procedure either
(a) has not been dismissed within five days of its institution or presentation or (b) has been dismissed within such period but solely
on the grounds of an insufficiency of assets to cover the costs of such case or other procedure;
(iv) a Party dies, becomes of unsound mind, is unable to pay its debts as they fall due or is bankrupt or insolvent, as
defined under any bankruptcy or insolvency law applicable to such Party; or any indebtedness of a Party is not paid on the due date
therefor or becomes, or becomes capable at any time of being declared, due and payable under agreements or instruments
evidencing such indebtedness before it would otherwise have been due and payable, or proceedings are commenced for any
execution, any attachment or garnishment, or any distress against, or an encumbrancer takes possession of, the whole or any part
of the property, undertaking or assets (tangible and intangible) of a Party;
(v) a Party or any Credit Support Provider in relation to a Party (or any Custodian acting on behalf of a Party or any Credit
Support Provider in relation to a Party) disaffirms, disclaims or repudiates any obligation under this agreement (including any
Transaction governed by these terms) or any Credit Support Document;
(vi) any representation or warranty made or deemed made by a Party pursuant to this agreement or pursuant to any
Credit Support Document proves to have been false or misleading in any material respect as at the time it was made or given;
(vii) (a) any Credit Support Provider in relation to a Party or the relevant Party itself fails to comply with or perform any
agreement or obligation to be complied with or performed by it in accordance with the applicable Credit Support Document; (b) any
Credit Support Document relating to a Party expires or ceases to be in full force and effect prior to the satisfaction of all obligations
of such Party under this agreement (including any Transaction governed by these terms), unless the other Party has agreed in
writing that this shall not be an Event of Default; (c) any representation or warranty made or deemed made by any Credit Support
Provider in relation to a Party pursuant to any Credit Support Document proves to have been false or misleading in any material
respect as at the time it was made or given or deemed made or given; or (d) any event referred to in (ii) to (iv) or (viii) of this Clause
4.1 occurs in respect of any Credit Support Provider in relation to a Party;
(viii) a Party is dissolved, or in respect of a Party whose existence is dependent upon a formal registration, such
registration is removed or ends, or any procedure is commenced seeking or proposing a Party's dissolution or the removal or ending
of such a registration of a Party; or
(ix) any event of default (however described) occurs under any terms of business in place between the Parties or any
other event specified for these purposes in Schedule 1 or otherwise occurs,
then the other Party (the "Non-Defaulting Party") may exercise its rights under Clause 4.2, except that, if so agreed in writing by the
Parties (whether by specifying as such in Schedule 1 hereto or otherwise), in the case of the occurrence of any Event of Default
specified in paragraph (ii) or (iii) above the provisions of Clause 4.3 shall apply.
4.2 Subject to Clause 4.3, at any time following the occurrence of an Event of Default, the Non-Defaulting Party may, by
notice to the Defaulting Party, specify a Liquidation Date for the termination and liquidation of Transactions in accordance with the
provisions of Clause 4.4.
4.3 If the Parties have so agreed, the date of the occurrence of any Event of Default specified in paragraph (ii) or (iii) of
Clause 4.1 shall automatically constitute a Liquidation Date, without the need for any notice by either Party and to the intent that the
provisions of Clause 4.4 shall then apply.
4.4 Upon the occurrence of a Liquidation Date:
(i) neither Party shall be obliged to make any further payments or deliveries under any Transactions governed by these
terms which would, but for this Clause, have fallen due for performance on or after the Liquidation Date and such obligations shall
be satisfied by settlement (whether by payment, set-off or otherwise) of the Liquidation Amount;
(ii) the Non-Defaulting Party shall (on, or as soon as reasonably practicable after, the Liquidation Date) determine
(discounting if appropriate), in respect of each Transaction governed by these terms, its total cost, loss or, as the case may be, gain,
in each case expressed in the Non-Defaulting Party's Base Currency (and, if appropriate, including any loss of bargain, cost of
funding or, without duplication, cost, loss or, as the case may be, gain as a result of the termination, liquidation, obtaining,
performing or reestablishing of any hedge or related trading position), as a result of the termination, pursuant to this agreement, of
each payment or delivery which would otherwise have been required to be made under such Transaction (assuming satisfaction of
each applicable condition precedent and having due regard to, if appropriate, such market quotations published on, or official
Final version 48
settlement prices set by, a relevant exchange or clearing organisation as may be available on, or immediately preceding, the date of
(iii) the Non-Defaulting Party shall treat each cost or loss to it, determined as above, as a positive amount and each gain
by it, so determined, as a negative amount and aggregate all of such amounts to produce a single, net positive or negative amount,
denominated in the Non-Defaulting Party's Base Currency (the "Liquidation Amount").
4.5 If the Liquidation Amount determined pursuant to Clause 4.4 is a positive amount, the Defaulting Party shall pay it to the
Non-Defaulting Party and if it is a negative amount, the Non-Defaulting Party shall pay it to the Defaulting Party. The Non-Defaulting
Party shall notify the Defaulting Party of the Liquidation Amount, and by which Party it is payable, immediately after the calculation of
4.6 Unless the Parties specify otherwise in Schedule 1 or otherwise, where termination and liquidation occurs in accordance
with Clause 4.4, the Non-Defaulting Party shall also be entitled, at its discretion, to apply the provisions of Clause 4.4 to any other
Transactions entered into between the Parties which are then outstanding, as if each such Transaction were a Transaction
governed by these terms.
4.7 The amount payable by one Party to the other Party pursuant to the provisions of Clause 4.5, or any applicable laws or
regulations, shall be paid in the Non-Defaulting Party's Base Currency by the close of business on the business day following the
completion of the termination and liquidation under Clause 4.4, or any laws or regulations having a similar effect, (converted as
required by applicable law into any other currency, any costs of such conversion to be borne by, and (if applicable) deducted from
any payment to, the Defaulting Party). Any such amount which is not paid on the due date therefor shall bear interest, at the average
rate at which overnight deposits in the currency of such payment are offered by major banks in the London interbank market as of
11.00 a.m. (London time) (or, if no such rate is available, at such reasonable rate as the Non-Defaulting Party may select) plus 1%
per annum, for each day for which such amount remains unpaid.
4.8 For the purposes of any calculation hereunder, the Non-Defaulting Party may convert amounts denominated in any other
currency into the Non-Defaulting Party's Base Currency at such rate prevailing at the time of the calculation as it shall reasonably
4.9 The Non-Defaulting Party's rights under this Clause 4 shall be in addition to, and not in limitation or exclusion of, any other
rights which the Non-Defaulting Party may have (whether by agreement, operation of law or otherwise).
Without prejudice to any other right or remedy which it may have, either Party may, on or after the occurrence of a Liquidation Date
and the determination of the Liquidation Amount, set off any amount owing by it (whether actual or contingent, present or future and
including, if applicable and without limitation, the Liquidation Amount and any amount due and payable on or before the Liquidation
Date but remaining unpaid) to the other Party against any amount owing by such other Party (whether actual or contingent, present
or future and including, if applicable and without limitation, the Liquidation Amount and any amount due and payable before the
Liquidation Date but remaining unpaid) to the first Party.
6. Currency Indemnity
If a Party (the first Party) receives or recovers any amount in respect of an obligation of the other Party (the second Party) in a
currency other than that in which such amount was payable, whether pursuant to a judgment of any court or otherwise, the second
Party shall indemnify and hold harmless the first Party from and against any cost (including costs of conversion) and loss suffered by
the first Party as a result of receiving such amount in a currency other than the currency in which it was due.
7. Assignments and Transfers
Neither Party may assign, charge or otherwise transfer or purport to assign, charge or otherwise transfer its rights or obligations
under this agreement (including the Transactions governed by these terms) or any interest therein without the prior written consent
of the other Party, and any purported assignment, charge or transfer in violation of this Clause shall be void.
Unless otherwise agreed, all notices, instructions and other communications to be given to a Party under this agreement shall be
given to the address, telex (if confirmed by the appropriate answerback) or facsimile (confirmed if requested) number and to the
individual or department specified in Schedule 1 or by notice in writing by such Party. Unless otherwise specified, any notice,
instruction or other communication given in accordance with this Clause shall be effective upon receipt.
9. Termination, Waiver and Partial Invalidity
9.1 Either of the Parties hereto may terminate this agreement at any time by seven days' prior notice to the other Party and
termination shall be effective at the end of such seventh day; provided, however, that any such termination shall not affect any then
outstanding Transactions governed by these terms, and the provisions of this agreement shall continue to apply until all the
obligations of each Party to the other under this agreement (including the Transactions governed by these terms) have been fully
9.2 A Party may waive any right, power or privilege under this agreement only by (and to the extent of) an express statement
9.3 If, at any time, any provision of these terms is or becomes illegal, invalid or unenforceable in any respect under the law of
any jurisdiction, neither the legality, validity or enforceability of the remaining provisions of these terms nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction shall in any way be affected or impaired thereby.
10. Time of Essence
Time shall be of the essence in this agreement.
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Every payment to be made by a Party under these terms shall be made in same day (or immediately available) and freely
transferable funds to the bank account designated by the other Party for such purpose.
12. Governing Law and Jurisdiction
Unless the Parties specify otherwise in Schedule 1 or otherwise:
12.1 These terms shall be governed by, and construed in accordance with, the laws of England and Wales.
12.2 With respect to any Proceedings, each Party irrevocably (i) agrees that the courts of England shall have exclusive
jurisdiction to determine any Proceedings and irrevocably submits to the jurisdiction of the English courts and (ii) waives any
objection which it may have at any time to the bringing of any Proceedings in any such court and agrees not to claim that such
Proceedings have been brought in an inconvenient forum or that such court does not have jurisdiction over such Party.
12.3 Each Party irrevocably waives to the fullest extent permitted by applicable law, with respect to itself and its revenues and
assets (irrespective of their use or intended use), all immunity on the grounds of sovereignty or other similar grounds from (i) suit, (ii)
jurisdiction of any courts, (iii) relief by way of injunction, order for specific performance or for recovery of property, (iv) attachment of
its assets (whether before or after judgment) and (v) execution or enforcement of any judgment to which it or its revenues or assets
might otherwise be entitled in any Proceedings in the courts of any jurisdiction and irrevocably agrees to the extent permitted by
applicable law that it will not claim any such immunity in any Proceedings. Each Party consents generally in respect of any
Proceedings to the giving of any relief or the issue of any process in connection with such Proceedings, including, without limitation,
the making, enforcement or execution against any property whatsoever of any order or judgment which may be made or given in
13.1 In these terms:
"Base Currency" means, as to a Party, the currency specified as such in Schedule 1 or agreed as such in relation to it in writing
between the Parties or, failing any such specification or agreement, the lawful currency of the United Kingdom;
"Credit Support Document" means, as to a Party (the first Party), a guarantee, hypothecation agreement, margin or security
agreement or document, or any other document containing an obligation of a third party ("Credit Support Provider"), or of the first
Party, in favour of the other Party supporting any obligations of the first Party under this agreement;
"Credit Support Provider" has the meaning given to it in the definition of Credit Support Document;
"Custodian" has the meaning given to it in Clause 4.1;
"Defaulting Party" means the Party in respect of which, or related to a Credit Support Provider in respect of which, an Event of
Default has occurred;
"Designated Office(s)" means, as to a Party, the office identified with its name on page 1 of these terms and any other office(s)
specified in Schedule 1 or otherwise agreed by the Parties to be its Designated Office(s) for the purposes of this agreement;
"Liquidation Date" means a day on which, pursuant to the provisions of Clause 4, the Non-Defaulting Party commences the
termination and liquidation of Transactions or such a termination and liquidation commences automatically;
"Potential Event of Default" means any event which may become (with the passage of time, the giving of notice, the making of any
determination hereunder or any combination thereof) an Event of Default;
"Proceedings" means any suit, action, or other proceedings relating to this agreement;
"Specified Exchanges" means the exchanges specified in Schedule 2 and any other exchanges agreed by the Parties to be
Specified Exchanges for the purposes of Clause 1.1; and "Specified Exchange" means any of them;
(i) a contract made on an exchange or pursuant to the rules of an exchange;
(ii) a contract subject to the rules of an exchange; or
(iii) a contract which would (but for its term to maturity only) be a contract made on, or subject to the rules of, an exchange and
which, at the appropriate time, is to be submitted for clearing as a contract made on, or subject to the rules of, an exchange,
in any of cases (i), (ii) and (iii) being a future, option, contract for differences, spot or forward contract of any kind in relation to any
commodity, metal, financial instrument (including any security), currency, interest rate, index or any combination thereof;
(iv) a transaction which is back-to-back with any transaction within paragraph (i), (ii), or (iii) of this definition; or
(v) any other transaction which the Parties agree shall be a Transaction.
13.2 In these terms, "Event of Default" means any of the events listed in Clause 4.1; "Liquidation Amount" has the meaning
ascribed to it in Clause 4.4; and "Non-Defaulting Party" has the meaning ascribed to it in Clause 4.1.
13.3 Any reference in these terms to:
a "business day" shall be construed as a reference to a day (other than a Saturday or Sunday) on which:
(i) in relation to a date for the payment of any sum denominated in (a) any currency (other than ecu or euro), banks generally are
open for business in the principal financial centre of the country of such currency; (b) ecu, the Ecu Clearing and Settlement System
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operated by the Ecu Banking Association (or, if such clearing system ceases to be operative, any other clearing or settlement
system determined by the Parties) is open for business; or (c) euros, settlement of payments denominated in euros is generally
possible in London or any other financial centre in Europe selected by the Parties; and
(ii) in relation to a date for the delivery of any property, property of such type is capable of being delivered in satisfaction of
obligations incurred in the market in which the obligation to deliver such first property was incurred;
a "Clause" or "Schedule" shall be construed as a reference to, respectively, a clause or schedule of these terms, unless the context
a "currency" shall be construed so as to include any unit of account;
"indebtedness" shall be construed so as to include any obligation (whether present or future, actual or contingent, as principal or
surety or otherwise) for the payment or repayment of money;
"Parties" means you and us and shall be construed as a reference to the parties to this agreement and shall include their
successors and permitted assigns; and "Party" shall be construed as a reference to whichever of the Parties is appropriate in the
context in which such expression may be used;
a Party to which a Credit Support Provider relates shall be construed as a reference to the Party whose obligations under this
agreement are supported by that Credit Support Provider; and
these "terms" or this "agreement" shall be construed as this Schedule A including the Schedules 1 & 2 to the same and as a
reference to these terms or this agreement as the same may be amended, varied, novated or supplemented from time to time.
1. Scope of Agreement
Each of the following shall be a Transaction for the purposes of paragraph (v) of the definition of "Transaction" in Clause 13.1:
All Transactions as defined in the Margin Trading Customer Agreement.
2. Designated Offices
Each of the following shall be a Designated Office:
Us - IG Markets Limited, Friars House, 157 - 168 Blackfriars Road, London, SE1 8EZ, UK
You – your physical address as notified by you to us from time to time
3. Additional Event(s) of Default
4. Automatic Termination
Upon the occurrence of any Event of Default specified in paragraph (ii) or (iii) of Clause 4.1, the provisions of Clause 4.3 shall
5. Termination of Other Transactions
The provisions of Clause 4.6 shall apply.
All notices from us to you will be sent as per Term 12 of the Margin Trading Customer Agreement and all notices from you to us
are to be sent by post or facsimile to our registered address: IG Markets Limited, Friars House, 157 - 168 Blackfriars Road,
London, SE1 8EZ, UK; or facsimile number +44 (0)20 7896 0010; marked for the attention of Group Legal Counsel.
7. Governing Law and Jurisdiction
8. Base Currency
9. Selected Financial Centres for Euro Settlements
The following exchanges are Specified Exchanges for the purposes of Clause 1.1:
Any exchange on which we agree to enter into an exchange traded Transaction, including but not limited to Futures or Options,
under the Margin Trading Customer Agreement and any clearing organisation from time to time appointed as such by any such
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IG Markets Limited
CONTRACTS FOR DIFFERENCES PRODUCT MODULE
(1) This Product Module forms part of the Agreement between you and us and sets out the terms and conditions that are specific to
all Transactions that are CFDs.
(2) Unless specified otherwise all references to Terms in this Product Module are references to Terms of the main body of the
(3) All capitalised words and phrases in this Product Module have the meanings set out in the Agreement except where they are
(4) Except as expressly amended or specified in this Product Module, all Terms of the Agreement remain in full force and effect.
2. Non-Guaranteed CFD Stop Orders, Limit Orders and Opening Orders
The following sub-clauses will be added to Term 10 (“Non-Guaranteed Stop Orders, Limit Orders and Opening Orders”) following
Term 10(1) – (7):
Stop Orders for Share CFDs
(8) If we accept a Stop Order for a Transaction that is a Share CFD then, provided you continue to satisfy the factors referred to at
Terms 4(5)(g), (h),(i), (j), (k), and (l), and subject to Term 10(6) we will act on that Stop Order by opening or closing (as the case
may be) the Transaction to which the Stop Order relates at a level determined in accordance with Term 10(3) when any of the
following conditions have been satisfied:
where the Stop Order is placed in respect of a Share CFD on an Instrument that is a Market Maker Share, the bid price (in the case
of an order to Sell) or the offer price (in the case of an order to Buy), in each case in relation to that Market Maker Share, reaches or
goes beyond the specified level; or
where the Stop Order is placed in respect of a Share CFD on an Instrument that is an Order Book Share, that Order Book Share has
traded on the Underlying Market at or beyond the specified level.
(9) Subject to the conditions in Term 10(8) being satisfied, we will execute the Stop Order within a reasonable time and, subject to
Term 10 (7), at a price based on the first attainable price for a transaction on the Underlying Market equivalent (including as to size)
to the transaction in relation to the relevant Transaction (being, in the case of an order to Sell, the bid price or, in the case of an
order to Buy, the offer price). You acknowledge that this first attainable price may differ from your specified level, especially in
relation to Share CFDs based on Market Maker Shares where order slippage can be significant in the event of more than minor
movement in the Underlying Market.
Limit Orders for Share CFDs
(10) If we accept a Limit Order for a Transaction that is a Share CFD then, provided you continue to satisfy the factors referred to at
Terms 4(5)(g), (h), (i), (j), (k) and (l), and subject to Term 10(6), we will act on that Limit Order when the bid price (in the case of an
order to Sell) or the offer price (in the case of an order to Buy) in the Underlying Market (in each case in relation to a transaction on
the Underlying Market that would be equivalent (including as to size) to the Transaction in question) reaches or goes beyond the
specified level for a length of time that, in our opinion, would be sufficient to make execution of such a transaction on the Underlying
Market reasonably practicable.
(11) Subject to the conditions in Term 10(10) being satisfied, we will execute the Limit Order within a reasonable time and, subject to
Term 10(3), at a price based on the first attainable price for a transaction in the Underlying Market that would be equivalent
(including as to size) to the Transaction in question. You acknowledge that this first attainable price may differ from your specified
level (but this price will not be any worse than the level of your Limit Order).
Stop Orders and Limit Orders for FX CFDs
(12) If we accept a Stop Order or Limit Order for a CFD that is an FX CFD then, provided you continue to satisfy the factors referred
to at Terms 4(5)(g), (h),(i), (j), (k), and (l), and subject to Terms 10(6), 10(7) and 10(13), as a default we will act on that Order by
opening or closing (as the case may be) the FX CFD to which the Order relates at a level determined in accordance with Term 10(3)
when the mid-point of our quote has reached or exceeded the specified level.
(13) For any Stop Orders or Limit Orders on FX CFDs, we may, whether on our internet dealing platform(s) or otherwise, offer you
the following choice: any Orders to be triggered at either (a) the bid price (in the case of an order to Sell) or the offer price (in the
case of an order to Buy) quoted to you; or (b) the mid-point of our quote to you as set out in Term 10(12). In the event that you are
offered this choice and you make a specific election for either option (a) or (b) then your Order(s) for all FX CFDs will be acted upon
in accordance with the balance of this Term 10 and with the election made by you.
Stop Orders for all other CFDs
(14) If we accept a Stop Order for a CFD that is neither a Share CFD nor an FX CFD then, provided you continue to satisfy the
factors referred to at Terms 4(5)(g), (h),(i), (j), (k), and (l), and subject to Term 10(6), we will act on that Stop Order by opening or
closing (as the case may be) the CFD to which the Stop Order relates at a level determined in accordance with Term 10(3) when the
mid-point of our quote has reached or exceeded the specified level.
(15) Subject to the conditions in Term 10(14) being satisfied, we will execute the Stop Order within a reasonable time and, subject to
Term 10(7), at a price based on the first attainable price for a transaction on the Underlying Market equivalent (including as to size)
to the transaction in relation to the relevant CFD (being, in the case of an order to Sell, the bid price or, in the case of an order to
Buy, the offer price).You acknowledge that this first attainable price may differ from your specified level.
Limit Orders for all other CFDs
(16) If we accept a Limit Order for a Transaction that is neither a Share CFD nor an FX CFD then, provided you continue to satisfy
the factors referred to at Terms 4(5)(g), (h), (i), (j), (k) and (l), and subject to Term 10(6), we will act on that Limit Order when the
mid-point of our quote has exceeded the specified level.
(17) Subject to the conditions in Term 10(16) being satisfied, we will execute the Limit Order within a reasonable time and, subject to
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Term 10(3), at a price based on the first attainable price for a transaction in the Underlying Market that would be equivalent
(including as to size) to the CFD in question. You acknowledge that this first attainable price may differ from your specified level (but
this price will not be any worse than the level of your Limit Order).
Cancellation and Rollover of various CFD Orders
(18) In relation to all CFDs that are Expiry Transactions on quarterly or monthly markets, Stop Orders and Limit Orders that relate to
a nominated Transaction that falls into this category will, where you roll over that Transaction into the next contract period, also be
rolled over, unless a specific instruction has been received by us prior to the roll over of the Transaction to cancel or amend the
Order(s). Please note that when the Stop Order or Limit Order is rolled over it will also be adjusted so that it falls the same distance
from the Opening Level of the CFD as the Stop Order or Limit Order did from the Opening Level of the CFD that related to the
previous contract period. A worked example of how this works is provided at paragraph 9 below. Any Stop Orders and Limit Orders
that do not relate to a nominated Transaction will be cancelled at the end of the contract period to which that Stop or Limit Order
3. CFD Charges
(1) Where you have opened a Sell in respect of a particular Instrument, we reserve the right to pass on to you any stock borrowing
charges incurred by us. If you do not pay any stock borrowing charges that become payable after you have opened such a CFD, or
we are unable to continue to borrow that Instrument in the Underlying Market (and we give you notice to that effect), we will be
entitled to close your CFD in respect of that Instrument with immediate effect. You acknowledge that this may result in you incurring
a loss on the CFD.
4. CFD Margin
(1) The following sub-clauses will be added to Term 13 (“Margin”) following Term 13(1) – (7):
(8) Unless otherwise agreed by us, on the business day on which you open a CFD, a margin requirement will be due from you to us
being the Margin Percentage multiplied by the Contract Value. This amount is due and payable immediately upon opening the CFD.
On each business day during the term of the CFD:
(a) if the Contract Value is higher than the preceding business day's close of business Contract Value, an additional margin
requirement will be due from you to us being the increase multiplied by the Margin Percentage; or
(b) if the Contract Value is lower than the preceding business day's close of business Contract Value, the margin requirement due
from you to us will reduce by the amount of such decrease multiplied by the Margin Percentage.
(9) When you close a CFD, we will account to you for all amounts received from you in respect of such CFD with Terms 13(8)(a) and
(b), or when you partially close a CFD, the appropriate proportion calculated pro rata.
5. CFD Adjustments, Take-overs and Voting Rights
(1) Adjustments for all of your positions will be made to reflect dividend, interest and other adjustments applicable to particular
Transactions. Adjustments will be calculated and will be credited to and/or deducted from your account on at least a monthly basis,
and on closing your positions, as follows:
(a) interest will be credited to your account if you sold, i.e. opened a short position, and debited if you bought, i.e. opened a long
(b) dividends will be credited to your account if you bought, i.e. opened a long position, and debited if you sold, i.e. opened a short
(2) If any Instrument becomes subject to possible adjustment as the result of any of the events set out in clause 5(3) below (a
“Corporate Event”), we will determine the appropriate adjustment, if any, to be made to the size and/or value and/or number of the
related CFD(s) (and/or to the level of any Stop Order or Limit Order) to:
(a) account for the diluting or concentrating effect necessary to preserve the economic equivalent of the rights and obligations of the
parties in relation to that CFD immediately prior to that Corporate Event; and/or
(b) replicate the effect of the Corporate Event on someone with an interest in the relevant underlying Instrument, to be effective from
the date determined by us and which may, for the avoidance of doubt, be retrospective.
(3) The events to which clause 5(2) refers are the declaration by the issuer of an Instrument (or, if the Instrument is itself a
derivative, the issuer of the security underlying that Instrument) of the terms of any of the following:
(a) a subdivision, consolidation or reclassification of shares, a share buy-back or cancellation, or a free distribution of shares to
existing shareholders by way of a bonus, capitalisation or similar issue;
(b) a distribution to existing holders of the underlying shares of additional shares, other share capital or securities granting the right
to payment of dividends and/or proceeds of liquidation of the issuer equally proportionately with such payments to holders of the
underlying shares, or securities, rights or warrants granting the right to a distribution of shares or to purchase, subscribe or receive
shares, in any case for payment (in cash or otherwise) at less than the prevailing market price per share as determined by us;
(c) any other event in respect of the shares analogous to any of the above events or otherwise having a diluting or concentrating
effect on the market value of the shares, whether temporary or otherwise; or
(d) any event analogous to any of the foregoing events or otherwise having a diluting or concentrating effect on the market value of
any Instrument not based on shares, whether temporary or otherwise.
(4) Any adjustment to the size and/or value and/or number of any CFD(s) (and/or to the level of any Stop Order or Limit Order) will
be determined reasonably and will be conclusive and binding on you. If you hold a long position (a Buy) in a CFD that is affected by
a Corporate Event, we will, should you give us notice of the same, give consideration to your views about the action or adjustment to
be made as a result of the Corporate Event. If you hold a short position (a Sell) then we will take whatever action is decided by us,
acting reasonably. We will inform you of any adjustment or amendment under this clause as soon as reasonably practicable.
(5) If at any time a take-over offer is made in respect of a company, then at any time prior to the closing date of such offer we may
give notice to you of our intention to close a CFD in respect of that company's Instruments. The date of such notice will be the
closing date and the Closing Level will be such price as we notify to you. References to “offer”, “take-over” and “closing date” in this
clause have the meaning given to them in the City Code on Take-overs and Mergers, as amended from time to time. These
expressions will, to the extent necessary, be applied by us (acting reasonably) to analogous events on any non-UK stock exchange.
(6) You acknowledge that we will not transfer voting rights relating to an underlying share or other Instrument to you, or otherwise
allow you to influence the exercise of voting rights held by us or by an agent on our behalf.
6. Dividends and interest
(1) We will value open CFDs on a daily basis and calculate the amount of interest, on a basis notified to you in writing (including
electronically), that would apply to the sum of money necessary to take out a position in the underlying Instrument with the same
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value. A different rate of interest will normally apply to long and short positions. While your CFD remains open, the amount of
interest will be calculated and will accrue on a daily basis.
(2) Where applicable (e.g. where an Instrument is a stock or share in respect of which a company pays dividends) a dividend
adjustment will be calculated for your account in respect of open positions held on the ex-dividend day for the relevant underlying
Instrument. The dividend adjustment will generally be the amount of the net dividend receivable by a UK taxpayer holding the
equivalent position in an underlying UK Instrument and will reflect normal practice in respect of non-UK Instruments, unless
otherwise agreed with you.
Futures CFDs And Option CFDs
(3) In the event that there is declared or paid in respect of any Instrument a special dividend or a dividend that is unusually large or
payable by reference to an ex-dividend date that is unusually early or late (in each case, having regard to dividend payments in
previous years in respect of that same Instrument), we may make an appropriate adjustment (including a retrospective adjustment)
to the Opening Level and/or the transaction size of a Futures CFD or Option CFD related to that Instrument and/or to the strike price
of an Option CFD related to that Instrument.
7. CFD Force Majeure Events
(1) The following sub-clause will be added to Term 21 (“Force Majeure Events”) following Term 21(1) (e):
(f) We will consider it to be a Force Majeure Event in the event that you open a Transaction in relation to an underlying Instrument
that is a share, and that underlying share becomes unborrowable so that we are unable to hedge against losses that we may incur
in relation to that Transaction. A stock may either be unborrowable from the outset or our brokers or agents may recall from us a
stock that we have already borrowed against. In the event that these circumstances arise, irrespective of when, we reserve the right
to take any of the actions set out in Term 21(2).
8. CFD Product Module Definitions:
“CFD” or “Contract for Differences” is a type of Transaction that may be an Undated CFD or an Expiry CFD and means a contract
the purpose of which is to secure a profit or avoid a loss by reference to fluctuations in the value or price of property of any
description or in an index or other factor designated for that purpose by us but specifically excludes any Transactions which are
dealt with in a separate Product Module. Types of CFD include, but are not limited to, Foreign Exchange CFDs, Futures CFDs,
Option CFDs, Share CFDs and Stock Index CFDs;
“Contract Value” means the number of shares, contracts or other units of the Instrument that you are notionally buying or selling
multiplied by (i) where the Instrument is traded on an Underlying Market, the current Underlying Market mid-market price or, if the
Underlying Market is closed, the preceding day’s close of business price; or (ii) where there is no Underlying Market, the midpoint of
our current quote for that Instrument;
“Corporate Event” has the meaning attributed to it in clause 6(2) above;
“Exchange Rate” means the rate (in relation to two currencies in respect of which you may wish to open a Foreign Exchange CFD)
at which a single unit of the first currency that you state may be bought with or, as the case may be, sold in, units of the second
currency that you state;
“Expiry CFD” means a CFD which has a set contract period, at the end of which the CFD expires automatically
“Foreign Exchange CFD” or “FX CFD” is a form of CFD that gives you exposure to changes in value of an Exchange Rate, but it
cannot result in the delivery of any Currency to or by you;
“Futures CFD” is a form of CFD that gives exposure to changes in the value of a futures contract. It is not a futures contract traded
on any exchange and it cannot result in the delivery of any Instrument to or by you;
“Margin Percentage” means the percentage of margin that you are required to pay on opening any CFD and maintain during the
term of the CFD, as we will notify to you from time to time or otherwise as may be set out in the Contract Details;
“Market Maker Share” means all shares that are not Order Book Shares and are generally quote rather than electronic order driven;
“Order Book Share” means all non UK shares and all UK shares that are traded using a fully electronic order book and order
matching system such as SETS;
“Option CFD” is a form of CFD that gives exposure to changes in option prices. It is not a traded option and it cannot be exercised
by or against you or result in the acquisition or disposal of any Instrument to or by you;
“Share CFD” is a form of CFD that gives exposure to changes in share prices. It is not an agreement to buy or sell any amount of
shares and it cannot result in the delivery of any shares to or by you. The share Instrument upon which the Share CFD is based may
be an Order Book Share or a Market Maker Share;
“Stock Index CFD” is a form of CFD that gives exposure to changes in the value of a stock index. It is not an agreement to buy or
sell any amount of shares and it cannot result in the delivery of any shares to or by you;
“Undated CFD” means a CFD with an indefinite contract period that is not capable of expiring automatically.
9. Worked Example of the roll-over of a Stop and a Limit Order on an Expiry CFD based on quarterly or monthly markets
You have a long position (a Buy) in an Expiry CFD in crude oil for the month of July with the details below:
Opening level: 5800
Stop Order Level: 5600 (being a stop distance of 200 points)
Limit Order Level: 5900 (being a limit distance of 100 points)
Current price to close: 5744
Current mid level: 5750
You have specified that we should roll your Stop Order and Limit Order on this CFD upon expiry into the August contract period at
the same levels. The current mid level of the Expiry CFD for the August period is 5600 which is a 150 point discount to the mid level
of July contract (5750 - 5600 = 150). Your Expiry CFD will be rolled over from July to August to reflect this discount as set out below:
Closing Level for the Expiry CFD for the July period: 5744
Opening Level for the Expiry CFD for the August period: 5604 (being the current mid price level of the August contract plus half the
relevant IG spread)
Amended Stop Order level for the August period: 5404 (being the Opening Level of the August Expiry CFD less the stop distance of
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200 points, the same relative stop distance from the Opening Level as your July Stop Order)
Amended Limit Order level for the August period: 5704 (being the Opening Level of the August Expiry CFD plus the limit distance of
100 points, the same relative limit distance from the Opening Level as your July Limit Order)
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8. INFORMATION ABOUT THE COMPANY
IG Markets is wholly responsible for the contents of this Information Memorandum. IG Markets was
incorporated as a limited company under the laws of England and Wales on 1 June 2000
(Company Registration No. 04008957). IG Markets is licensed and regulated by the UK Financial
Services Authority under FSA No. 195355 and has permission to inter alia hold client money and
advise on and deal in CFDs (and other investments) as principal or agent. IG Markets is also
licensed and regulated by the Australian Securities and Investment Commission (No. 220440).
IG Markets is registered with The Netherlands Authority for the Financial Markets (Autoriteit
Financiële Markten) as an EEA securities institution with a European passport to offer securities
services in the European Economic Area, including the Netherlands.
8.2 Registered Office
157-168 Blackfriars Road
London SE1 8EZ
T +44 (0)20 7633 5555 (New Accounts)
+44 (0)20 7633 5323 (Dealing)
F +44 (0)20 7896 0010
The directors of IG Markets are:
- Andrew Robert Mackay.
- Nathaniel Bernard le Roux; and
- Peter Geoffrey Hetherington;
- Timothy Alexander Howkins.
The main objects of IG Markets are to carry on the businesses of Margin trading, foreign exchange
trading and hedging operations in any part of the world. A full description of the company's objects
is set out in article 3 of the company's Memorandum of Association.
8.5 Share capital
The issued share capital of IG Markets is £13 million divided into 13 million ordinary shares of £1
each. The total amount of issued share capital is paid up. The ultimate parent company of
IG Markets is IG Group Holdings plc. All of IG Markets' issued share capital is owned by Market
Data Limited, which is in turn wholly owned by IG Group Limited, which is wholly owned by IG
Group Holdings plc.
There has been no change to the issued capital of IG Markets in the last three years, nor during
the last three financial years.
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The Memorandum of Association and the Articles of Association of IG Markets, including its share
capital, can be amended by a special resolution of the members of the company, in accordance
with the UK Companies Act 1985. Since the incorporation of IG Markets, the Articles of Association
of IG Markets have been amended once, on 25 June 2003.
8.7 The IG Group
IG Markets is an operating company of the IG Group, of which IG Group Holdings plc is the parent
company. The registered offices of Market Data Limited, IG Group Limited and IG Group Holdings
plc are at the same address as the registered office of IG Markets.
The directors of IG Group Holdings plc are:
- Jonathan Richard Davie (Non-executive Chairman);
- Nat le Roux (Chief Executive);
- Tim Howkins (Finance Director);
- Peter Hetherington (Chief Operating Officer);
- Andrew Mackay (Legal Director);
- Sir Alan Budd (Non-executive Director);
- David Martin Jackson (Non-executive Director);
- Robert Richard Lucas (Non-executive Director);
- Roger Philip Yates (Non-executive Director).
The Group was founded in the United Kingdom in 1974 and IG Group Holdings plc is listed on the
London Stock Exchange. The Group has offices in London, England; Melbourne, Australia; and
The Group's core business is spread betting, both on financial markets and on sporting,
entertainment and political events. The Group's other principal products and services are contracts
for differences, binary bets and foreign exchange trading. These products are provided to retail
clients and market professionals. More than 85 per cent of the Group's client transactions are
Two of the Group's principal operating subsidiaries, IG Markets and IG Index plc (which offers
spread betting and binary bets to its clients) are regulated by the Financial Services Authority in
the United Kingdom and by the Australian Securities and Investments Commission in Australia. IG
Index and Extrabet Limited (which offers fixed odds bets to its clients) both hold UK bookmakers'
IG Markets' main client activities consist of offering CFDs on financial instruments, as further
described in this Information Memorandum, and offering a facility through which clients can trade
foreign exchange contracts on a leveraged basis.
The majority of IG Markets' client CFD business relates to shares. IG Markets' clients are mainly
private individuals, although the company also trades with companies and other institutions.
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IG Markets also undertakes all hedging of the IG Group’s exposures to financial markets.
Furthermore, IG Markets undertakes daily CFD transactions with its group company IG Index plc,
which have the effect of transferring all market risk that IG Index plc incurs in dealing with its own
clients to IG Markets. IG Markets enters into transactions in equities, futures, options and foreign
exchange in order to reduce the group’s overall exposure to market risk, in accordance with the
group’s risk management policy. The main activities of IG Markets, as outlined above, have
remained unchanged over the past 3 years.
IG Markets has a single office in London. It also has an introducing arrangement with its Group
company, IG Australia (pty) Limited, which has an office in Melbourne, Australia, and introducing
agreements with brokers based in a number of other countries in relation to CFDs.
IG Markets deals with a significant proportion of customers via the internet, and has as a result
customers from all over the world. IG Markets has a German language website which is registered
in Germany. The core of IG Markets' trading activity is, however, in London and it is from here that
IG Markets hedges its exposure with market counterparties based in the UK and overseas.
8.9 Financial information
The figures below are derived by IG Markets from its annual accounts, which were prepared in
accordance with UK Generally Accepted Accounting Policies and audited by its UK auditor, who
issued their unqualified auditors' reports at the dates of the annual accounts. Reference is made to
the annual accounts for the respective years. The explanatory notes to the financial statements of
the last financial year (ended 31 May 2005) are included in section 9 of this Information
Memorandum. The relevant annual accounts of IG Markets and the annual accounts of IG Group
Holdings plc are also available for inspection (and copies can be obtained) at the address
mentioned in section 12.4.
Balance sheets of IG Markets for the last three financial years:
2003 2004 2005
£ £ £
Tangible assets 429,361 3,380,694 2,293,574
Investments – 60,001 60,001
429,361 3,440,695 2,353,575
Debtors 19,120,249 38,173,211 51,277,054
Cash at bank and in hand 23,926,719 7,091,691 14,788,243
43,046,968 45,264,902 66,065,297
Creditors: amounts falling due within one year 18,662,666 19,409,537 34,365,985
Net current assets 24,384,302 25,855,365 31,699,312
Total assets less current liabilities 24,813,663 29,296,060 34,052,887
Capital and reserves
Called up share capital 13,000,000 13,000,000 13,000,000
Profit and loss account 11,813,663 16,296,060 21,052,887
Total shareholders’ funds 24,813,663 29,296,060 34,052,887
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Profit and loss accounts of IG Markets for the last three financial years:
2003 2004 2005
£ £ £
Turnover 17,287,792 21,004,665 26,393,153
Administrative expenses 5,819,851 8,747,783 11,860,515
Operating profit 11,467,941 12,256,882 14,532,638
Interest receivable 1,134,972 1,693,306 3,154,211
Interest payable (112,593) (312,560) (814,913)
Profit on ordinary activities before taxation 12,490,320 13,637,628 16,871,936
Tax charge on profit on ordinary activities 3,918,185 1,855,231 3,615,109
Profit for the financial year 8,572,135 11,782,397 13,256,827
Dividends 2,600,000 7,300,000 8,500,000
Retained profit for the year 5,972,135 4,482,397 4,756,827
There are no recognised gains or losses other than retained profit during the year.
Results after tax and the amount of dividend per share of IG Markets during the last three financial
2003 2004 2005
£ £ £
Results after tax 8,572,135 11,782,397 13,256,827
Dividends 2003 2004 2005
£ £ £
20 / share 46.15 / share 65.38 / share
- Interim paid 2,600,000 6,000,000 8,500,000
- Second interim paid - 1,300,000 -
2,600,000 7,300,000 8,500,000
Overview of the cash flow during the last three financial years:
2003 2004 2005
£ £ £
Net cash inflow/(outflow) from operating 11,055,045 (7,048,317) 8,516,927
Returns on investments and servicing of
Interest received 1,134,972 1,693,306 3,154,211
Interest paid (112,593) (312,560) (814,913)
1,022,379 1,380,746 2,339,298
Corporation tax paid (3,048,075) (2,726,851) (2,033,024)
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Capital expenditure and financial
Payments to acquire tangible fixed assets (461,547) (1,082,105) (1,126,649)
Receipts from sales of fixed assets – 1,500 –
Payments to acquire fixed asset investments – (60,001) –
(461,547) (1,140,606) (1,126,649)
Equity dividends paid (4,472,000) (7,300,000) (8,500,000)
Management of liquid resources
Increase in short term deposits (5,000,000) 10,000,000 –
Increase/(decrease) in cash (954,198) (6,835,028) 7,696,552
Reconciliation of net cash inflow to 2003 2004 2005
movement in net funds £ £ £
Increase/(decrease) in cash (954,198) (6,835,028) 7,696,552
Cash outflow from short term deposits 5,000,000 (10,000,000) –
Change in net funds resulting from cash flows 4,045,802 (16,835,028) 7,696,552
Net funds at 1 June 19,880,917 23,926,719 7,091,691
Net funds at 31 May 23,926,719 7,091,691 14,788,243
IG Markets made the following significant investments in subsidiaries:
• On 27 January 2006, IG Markets acquired, for a purchase price of US$1,000,000, IG Asia Pte
Ltd (a company registered in Singapore) to act as a sales office helping the issuer gain access
to, and strengthen its position in, the Asian market.
• On 22 July 2003, IG Markets acquired, for a purchase price of £1, 60% of the shares in ITS
Market Solutions Limited ("ITS MS"), as part of a joint venture with Information Trading
Systems Limited to develop and promote ITS Market software to third parties.
• On 3 May 2002, IG Markets acquired, for a purchase price of £1, IG Nominees Limited to act
as a nominee company holding the legal title of shares and other property held by the issuer
on trust for the issuer's customers.
8.11 Loans and debts
An analysis of IG Market's creditors is set out at note 13 in section 9 of this Information
Memorandum. The group has no loans or debts other than those disclosed in that note. Amounts
due to group companies of £5,648,485 arise primarily out of trading with group companies and are
repayable on demand. All of the creditors shown in note 13 in section 9 are unsecured.
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IG Markets has granted fixed and floating charges over its assets to secure borrowing facilities and
other banking facilities that are available to it and to certain other group companies. The maximum
potential liability of all group companies under these facilities is £53m. There were no drawings
under these facilities by IG Markets or any other group company at either 31 May 2005 or
30 November 2005.
8.12 Recent developments and prospects
Since the end of its last financial year, IG Markets has continued to deliver substantial growth in
turnover and profits.
In the six months to 30 November 2005, IG Markets' turnover was £9,721,000, compared with a
turnover of £6,108,000 in the corresponding period the previous year, an increase of 59%.
The number of the IG Group's active financial clients is a key indicator of growth. In the six months
to 30 November 2005 15,490 financial clients (of whom approximately 3,940 were direct clients of
IG Markets) traded with the group at least once during the previous 6 months, compared to 12,896
(of whom approximately 2,330 were direct clients of IG Markets) in the corresponding period the
prior year, an increase of 20% in the number of group clients (69% in the number of direct IG
Since 30 November 2005 IG Markets has continued to experience the strong transaction volumes
seen in the first half of the financial year, and account opening levels (a key indicator of future
performance) continue to be robust. All parts of the business are performing well and IG Markets is
confident about its prospects.
IG Markets' cost base has not changed materially since the end of the financial year to the date of
this Information Memorandum.
Several factors have contributed to the company’s growth since the end of the financial year and
are expected to further contribute to the Company's growth.
Robust levels of client recruitment
Part of the growth in turnover and active client numbers since 31 May 2005 may be attributed to
the level of new client recruitment. A strong client recruitment level is in our view a key indicator of
In addition to direct clients, who come to IG Markets via its website, advertising and direct sales
force, an increasing number of clients are referred to IG Markets by stockbrokers and other
introducing parties. The breadth of the Company’s product offering, the qualities of its direct market
access dealing platform and the standard of it’s back office procedures will continue to attract
additional stockbrokers and other intermediaries as introducing parties.
IG Markets also benefits from the recruitment of financial clients by other IG group companies
since transactions undertaken by those companies are hedged with IG Markets.
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IG Markets has a track record for innovative product and technology development, and this has
helped and will help the Company to stay at the forefront of the CFD market. For example, IG
Markets' advanced trading platform L2TM is one of only a limited number of CFD trading platforms
that allow clients to execute directly into the underlying exchange’s order book, automatically
creating a CFD position between IG Markets and its client in the process.
Strong brand value
IG Markets and the IG Group more generally have strong brand recognition in the UK and
elsewhere. The strong brand recognition is strengthened by the Group’s focus on client service,
speed and quality of execution, breadth of product offering and technological innovation. This
leading brand strength creates a significant competitive advantage from which IG Markets and the
IG Group will continue to benefit in the future.
Proven risk management
IG Markets does not take proprietary positions based on an expectation of market movements. IG
Markets believes that this, coupled with its hedging policy and exposure limits have demonstrably
improved the consistency of its earnings and will do so in the future.
We intend to increase our overseas client numbers and revenues through the IG group’s overseas
offices, its websites and via introducing brokers.
The IG group’s Australian office, which, inter alia, recruits CFD clients for IG Markets, continues to
perform well. Group revenues from clients recruited by the Australian office have almost doubled in
the six months to 30 November 2005 compared with the six months ending 30 November 2004.
CFDs are a relatively new product in the Australian financial services market (IG Markets was the
first to offer CFDs in Australia in 2002) and we expect this market to continue to grow.
The IG group is in the late stages of obtaining authorisation from the Monetary Authority of
Singapore for its new subsidiary company, IG Asia Pte Ltd, of which IG Markets is the sole
shareholder. We expect the new Singapore office to commence trading in April, offering CFDs and
foreign exchange. IG Asia Pte will deal as principal with its clients and hedge all of the resulting
transactions with IG Markets.
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9. NOTES TO THE FINANCIAL STATEMENTS
Below are the explanatory notes to the financial statements of IG Markets for the last financial year
(ended 31 May 2005). The full annual accounts of IG Markets and the annual accounts of IG
Group Holdings plc are available for inspection (and copies can be obtained) at the address
mentioned in section 12.4.
1. Accounting policies
The financial statements are prepared under the historical cost convention, modified for the revaluation of derivative
transactions, and in accordance with applicable United Kingdom accounting standards.
Group financial statements
The company is exempt under s228 of the Companies Act 1985 from preparing group financial statements because it
has been included in the consolidated financial statements of IG Group Holdings plc, a company incorporated in the
Fixed assets are recorded at cost. Depreciation is provided on all tangible fixed assets at rates calculated to write off
the cost of each asset evenly over its expected useful life as follows:
Computer equipment - over 2 or 3 years
The carrying values of tangible fixed assets are reviewed for impairment when events or changes in circumstances
indicate that the carrying value may not be recoverable.
Fixed asset investments
Fixed asset investments are stated at cost, unless, in the opinion of the directors, there has been a permanent
diminution in value, in which case an appropriate adjustment is made.
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance
sheet date where transactions or events have occurred at that date that will result in an obligation to pay more, or a
right to pay less or to receive more, tax, with the following exception:
Deferred tax assets are recognised only to the extent that the directors consider that it is more likely than not that
there will be suitable taxable profits from which the future reversal of the underlying timing differences can be
Deferred tax is measured at a non-discounted basis at the tax rates that are expected to apply in the periods in which
the timing differences are expected to reverse, based on tax rates and laws that have been enacted or substantively
enacted at the balance sheet date.
Revenue is recognised to the extent that the economic benefits will flow to the group and the revenue can be reliably
measured. The following specific criteria must be met before revenue is recognised:
Turnover includes gains and losses on trading in financial markets. Open positions are carried at fair market value
and gains and losses arising on this valuation are recognised in turnover as well as gains and losses realised on
positions that have closed.
Revenue is recognised as the interest accrues.
Revenue is recognised when the shareholder’s right to receive the payment is established.
Assets and liabilities denominated in foreign currencies are re-translated at the rate of exchange ruling at the balance
sheet date. Transactions in foreign currencies are translated into sterling at the rate prevailing on the date of the
transaction. Differences arising are taken to the profit and loss account.
Derivative financial instruments
Derivative financial instruments are carried at fair market value and the resultant profits and losses are included in
trading income. Assets or liabilities resulting from gains or losses on open positions are reported gross in amounts
due from/to clients and brokers, reduced by the effect of other assets or liabilities with a counterparty where a
qualifying netting agreement is in place. Fair value is determined by reference to third party market values.
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Treasury bills are included at historical cost plus income accrued to the balance sheet date.
As the company is a 100% subsidiary undertaking, and consolidated financial statements for IG Group Holdings plc
are publicly available, group transactions have not been disclosed pursuant to the exemptions permitted in FRS 8.
The group operates a defined contribution scheme. Contributions are charged in the profit and loss as they become
payable and in accordance with the rules of the schemes. For certain directors the group also operates individual
schemes into which contributions are discretionary.
Rentals payable in respect of operating leases are charged in the profit and loss account on a straight line basis over
the term of the lease.
Turnover represents profits and losses from trading as principal with its clients in foreign exchange and contracts for
differences together with the net result of hedging its exposure by trading in futures, options, individual shares,
foreign exchange and contracts for differences.
The group trades global financial markets from its London base and hedges its exposures with market counterparties
based in the UK and overseas. The choice of counterparty for hedging transactions is based on operational
considerations at the time of the transaction. In order to provide an analysis by location it would be necessary to
match bets with their hedges. The directors consider this is not feasible as the group hedges on a portfolio basis and
counterparties to trades may not be in the same location. Accordingly, no geographical split of results is given.
3. Operating profit
This is stated after charging/(crediting):
Depreciation 2,213,979 1,311,718
Foreign exchange differences 413,271 (1,012,516)
4. Auditors’ remuneration
Audit services 42,451 28,140
Non-audit services – 13,021
5. Directors’ emoluments
Directors’ emoluments represent amounts paid to directors for services to the group. Only a proportion of these relate
to services to IG Markets Limited.
Emoluments 1,332,803 2,377,371
Pension contributions 282,753 118,171
Members of money purchase pension scheme 9 11
Highest paid director: 463,820 557,771
Emoluments 23,500 15,000
6. Staff costs
Wages and salaries 5,355,874 4,858,753
Social security costs 662,184 538,044
Other pension costs (note 17) 402,503 158,463
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The average monthly number of employees was made up as follows:
Dealing 43 45
Management and administration 28 25
7. Interest payable and similar charges
Interest payable to clients and brokers 814,913 312,560
8. Tax charge on profit on ordinary activities
(a) The tax charge is made up as follows:
UK Corporation tax 3,789,003 2,039,898
Under/(over) provision in previous years 93,043 (107,328)
Total current tax 3,882,046 1,932,570
Origination and reversal of timing differences (266,937) (77,339)
Tax on profit on ordinary activities 3,615,109 1,855,231
(b) Factors affecting current tax charge
Profit on ordinary activities before taxation 16,871,936 13,637,628
Profit on ordinary activities multiplied by
standard rate of corporation tax at 30% 5,061,581 4,091,288
Decelerated capital allowances 266,937 47,712
Expenses not deductible for tax purposes 143,568 (12,160)
Group relief (1,683,083) (2,086,942)
Under/(over) provision in previous years 93,043 (107,328)
Total current tax 3,882,046 1,932,570
The effective corporation tax rate is 23.0% (2004: 14.2%).
(c) Factors affecting future tax charges
The company expects capital allowances to be in excess of depreciation in future years.
(d) Deferred tax asset
Deferred tax is provided at 30% (2004 - 30%) in the financial statements as follows:
Depreciation in excess of capital allowances 344,276 77,339
At 1 June 2004 77,339
Decelerated capital allowances 266,937
At 31 May 2005 344,276
This is included in debtors (note 12).
- Interim paid 65.38p per share (2004 - 46.15p) 8,500,000 6,000,000
- Second interim paid nil per share (2004 - 10.0p) – 1,300,000
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10. Tangible fixed assets
At 1 June 2004 4,719,956
Currency movements 312
At 31 May 2005 5,846,917
At 1 June 2004 1,339,262
Currency movements 102
Charge for the year 2,213,979
At 31 May 2005 3,553,343
Net book value:
At 31 May 2005 2,293,574
At 31 May 2004 3,380,694
11. Fixed asset investments
Investments in subsidiaries
At 1 June 2004 and 31 May 2005 60,001
Name of company Country of Holding Proportion of voting Nature of business
incorporation rights held
IG Nominees Ltd UK Ordinary shares 100% Nominee company
ITS Market Solutions Ltd UK Ordinary shares 60% Software and
Amounts due from brokers 40,261,944 31,473,883
Amounts due from clients 781,047 268,288
Other debtors 315,163 50,930
Prepayments 126,321 71,628
Amounts due from group companies 9,448,303 6,231,143
Deferred tax asset 344,276 77,339
13. Creditors: amounts falling due within one year
Amounts due to clients 25,638,384 17,315,757
Accruals and deferred income 387,791 247,624
Corporation tax 2,681,591 832,569
Other taxes and social security 9,734 1,938
Amounts due to group companies 5,648,485 1,011,649
14. Clients’ money
Clients’ money is held by IG Markets Limited on trust in client accounts at approved banks in accordance with the
rules of the Financial Services Authority. Clients’ money held and the corresponding liability to clients are not included
in the balance sheet.
Client money held at balance sheet date 42,105,342 19,450,944
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15. Share capital
13,000,000 ordinary shares of £1 each 13,000,000 13,000,000
Allotted, called up and fully paid:
13,000,000 ordinary shares of £1 each 13,000,000 13,000,000
Profit and loss account
At 31 May 2004 16,296,060
Retained profit for the year 4,756,827
At 31 May 2005 21,052,887
17. Pension contributions
For the directors and certain employees the group makes contributions into individual personal schemes based upon
a percentage of the salary of the personnel involved. The company’s obligation to these individual pension schemes
is a defined contribution scheme per FRS 17.
The pension cost charge represents contributions payable by the company to all the schemes and amounted to:
18. Notes to the statement of cash flows
(a) Reconciliation of operating profit to net cash inflow from operating activities:
Operating profit 14,532,638 12,256,882
Depreciation 2,213,979 1,311,718
Losses on disposal – 5,793
(Increase) in debtors (12,836,906) (22,241,201)
Increase in creditors 4,607,216 1,618,491
Net cash inflow/(outflow) from operating activities 8,516,927 (7,048,317)
(b) Analysis of net funds:
At 31 May At 31 May
2004 Cash flow 2005
£ £ £
Cash at bank and in hand 7,091,691 7,696,552 14,788,243
––––––––––––––– ––––––––––––––– –––––––––––––––
Short term deposits are included within cash at bank and in hand in the balance sheet.
(c) Major non-cash transactions
Dividends amounting to £8,500,000 (2004 - £ nil) were settled through intercompany accounts during the year.
19. Transactions with directors
The directors of IG Markets Limited held shares of the ultimate parent company, IG Group Holdings plc, as disclosed
in the directors’ report.
Certain directors or their associates made loans to the ultimate parent company, which were all repaid during the
year. The loans were 11% subordinated loans further described in the group financial statements as follows:
Principal outstanding Unpaid interest
31 May 31 May 31 May 31 May
2004 Repaid 2005 2004 2005
£ £ £ £ £
P G Hetherington 145,088 (145,088) – 11,806 –
T A Howkins 149,168 (149,168) – 12,138 –
N B Le Roux 804,706 (804,706) – 65,479 –
A R Mackay 75,586 (75,586) – 6,150 –
J Austin 22,909 (22,909) – 1,864 –
A Matthews 13,090 (13,090) – 1,065 –
M Murray 155,160 (155,160) – 12,625 –
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M Tooth 16,171 (16,171) – 1,315 –
G Wilkes 65,454 (65,454) – 5,325 –
––––––––– ––––––––– ––––––––– ––––––––– –––––––––
1,447,332 (1,447,332) – 117,767 –
––––––––– ––––––––– ––––––––– ––––––––– –––––––––
The offer by the ultimate parent company to acquire IG Group plc included an option to receive loan notes as an
alternative to part of the cash due to shareholders for the sale of IG Group plc shares. The loan notes bear interest at
LIBOR minus 1%. The directors’ holdings of loan notes were:
Principal outstanding Unpaid interest
31 May 31 May 31 May 31 May
2004 Repaid 2005 2004 2005
£ £ £ £ £
P G Hetherington 76,500 (76,500) – 850 –
T A Howkins 189,975 (189,975) – 2,110 –
M Murray 50,745 (50,745) – 564 –
––––––––– ––––––––– ––––––––– ––––––––– –––––––––
317,220 (317,220) – 3,524 –
––––––––– ––––––––– ––––––––– ––––––––– –––––––––
In the years ended 31 May 2004 and 31 May 2005 the company had no other transactions with its directors other
than in relation to the management of the company.
20. Parent undertaking
The parent undertaking throughout the year was Market Data Limited which is a wholly-owned subsidiary of IG Group
The ultimate parent company is IG Group Holdings plc.
The group financial statements which include the results of IG Markets Limited can be obtained from Friars House,
157-168 Blackfriars Road, London SE1 8EZ.
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10. TAX INFORMATION
10.1 UK taxation of IG Markets
IG Markets is a UK resident company and is subject to UK corporation tax on the whole of its
profits (both income and chargeable gains). Corporation tax is charged at 30% and is paid in four
instalments commencing approximately 5½ months prior to the year end and ending approximately
3½ months after the year end.
No specific tax regime applies to IG Markets.
10.2 Taxation considerations for Dutch residents
The following is intended as general information only and it does not purport to present any
comprehensive or complete description of all aspects of Dutch tax laws which could be of
relevance to a holder of CFDs. Prospective holders of CFDs should therefore consult their tax
adviser regarding the tax consequences of any purchase, ownership or disposal of CFDs.
The following summary is based on Dutch tax law as applied and interpreted by Dutch tax courts
and as published and in effect on the date of this Information Memorandum without prejudice to
any amendments introduced at a later date and implemented with or without retroactive effect.
IG Markets has been advised that under Dutch tax law the following treatment will apply to CFDs.
The description of certain Dutch tax consequences in this paragraph is only intended for the
following holders of CFDs:
(i) individuals who are resident or deemed to be resident in the Netherlands;
(ii) individuals who opt to be treated as a resident in the Netherlands for purposes of Dutch
taxation ((i) and (ii) jointly referred to as Dutch Individuals); and
(iii) entities that are subject to the 1969 Dutch Corporate Income Tax Act (CITA) and are
resident or deemed to be resident in the Netherlands for the purposes of the CITA,
• pension funds (pensioenfondsen) and other entities, that are exempt from Dutch
corporate income tax;
• entities which are entitled to the participation exemption (deelnemingsvrijstelling) with
respect to the CFDs on shares in a company or membership rights in a cooperative
• Investment institutions (beleggingsinstellingen); (Dutch Corporate Entities).
Taxes on income and capital gains
This section does not purport to describe the possible Dutch tax considerations or consequences
that may be relevant to a holder of a CFD who, through that CFD, has a position in shares or
membership rights which constitutes a (fictitious) substantial interest (aanmerkelijk belang) in any
company or cooperative society.
Generally, a shareholder or member has a substantial interest if such holder or member, alone or
together with his partner, has, or if certain relatives of the shareholder or member or his partner
have, directly or indirectly:
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(i) the ownership of, or certain rights over, shares representing five percent or more of the
total issued and outstanding capital of a company, or of the issued and outstanding capital
of any class of shares of a company; or
(ii) the right to acquire shares, whether or not already issued, representing five percent or
more of the total issued and outstanding capital of a company, or of the issued and
outstanding capital of any class of shares of a company; or
(iii) certain profit participating certificates that relate to five percent or more of the annual profit
of a company or to five percent or more of the liquidation proceeds of a company; or
(iv) the right to cast five percent of more of the votes in the general meeting of a cooperative
Generally, a shareholder or member has a fictitious substantial interest (fictief aanmerkelijk belang)
if (a) he has disposed of, or is deemed to have disposed of, all or part of a substantial interest or
(b) he is an individual and has transferred an enterprise in exchange for shares, on a non-
Dutch Individuals not engaged or deemed to be engaged
in an enterprise or receiving benefits from miscellaneous activities
Generally, a Dutch Individual who holds CFDs that are not attributable to an enterprise from which
he derives profits as an entrepreneur (ondernemer) or pursuant to a co-entitlement to the net worth
of such enterprise other than as an entrepreneur or a shareholder, or to miscellaneous activities
(overige werkzaamheden), will be subject annually to an income tax imposed on a fictitious yield
on such CFDs. The CFDs held by such Dutch Individual will be taxed under the regime for savings
and investments (inkomen uit sparen en beleggen). Irrespective of the actual income (or capital
gains) realised, the annual taxable benefit of all the assets and liabilities of a Dutch Individual that
are taxed under this regime, including the CFDs, is set at a fixed amount. The fixed amount equals
4 percent of the average net fair market value of these assets and liabilities measured, in general,
at the beginning and end of every calendar year. The current tax rate under the regime for savings
and investments is a flat rate of 30 percent.
Dutch Individuals engaged or deemed to be engaged
in an enterprise or receiving benefits from miscellaneous activities
Any benefits derived or deemed to be derived from CFDs (including any capital gains realised on
the disposal thereof) that are either attributable to an enterprise from which a Dutch Individual
derives profits, whether as an entrepreneur or pursuant to a co-entitlement to the net worth of such
enterprise (other than as an entrepreneur or a shareholder), or attributable to miscellaneous
activities are generally subject to income tax in the Dutch Individual's hands at statutory
progressive rates with a maximum of 52 percent.
Dutch Corporate Entities
Any benefits derived or deemed to be derived from CFDs (including any capital gains realised on
the disposal thereof) that are held by a Dutch Corporate Entity are generally subject to corporate
income tax at statutory rates, currently 29.6 percent.
Dividend withholding tax
Dividends distributed by companies which are resident in the Netherlands are generally subject to
withholding tax imposed by the Netherlands at a rate of 25 percent, which rate may be reduced,
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often to 15 percent, under tax treaties the Netherlands has concluded with other countries. As
explained in paragraph 3.1 of this Information Memorandum, a holder of a CFD that represents a
long position in shares, will receive dividend adjustments to reflect any cash dividends declared on
such shares where the ex-dividend date occurs while the position is open. In the dividend
adjustment for shares in a company that is resident in the Netherlands any dividend withholding
tax which is imposed on dividends declared on the underlying shares will be taken into account
(i.e. the dividend adjustment reflects the net dividend, typically equal to 85 percent of the gross
dividend declared). As a Dutch Individual or a Dutch Corporate Entity that holds a CFD on shares
does not actually receive dividends, he/it will not be entitled to a credit against individual,
respectively corporate, income tax for any withholding tax which was taken into account in the
Other taxes and duties
No other taxes and duties (including stamp duty and VAT) are due by or on behalf of a holder of
CFDs in respect of or in connection with the purchase, ownership or disposal of CFDs.
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11. DECLARATION / AUDITOR'S REPORT
11.1 IG Markets declaration
IG Markets confirms that, insofar as it can reasonably be expected to be aware, the information in
this Information Memorandum is in accordance with the facts, and no information has been omitted
which, if included, would have altered the purport of this Information Memorandum.
11.2 Auditor's report
We have taken cognisance of this information memorandum dated 23 March 2006 of IG Markets
Limited, London, with the aim of establishing whether this information memorandum at least
contains the information which, to the extent applicable, is required to be included therein pursuant
to Section 2 (2) and (5) of the Netherlands Decree on the Supervision of the Securities Trade 1995
(Besluit toezicht effectenverkeer 1995) and the Netherlands Further Regulation on the Supervision
of conduct on the Securities Trade 2002 (Nadere Regeling gedragstoezicht effectenverkeer 2002).
This information memorandum is the responsibility of the company’s management. Our
responsibility is to express an opinion pursuant to Section 15 (2) of the Annex A to the Netherlands
Decree on the Supervision of the Securities Trade 1995.
Based on auditing standards generally accepted in the Netherlands, we are required to plan and
perform our procedures to obtain assurance about that this information memorandum at least
contains the information which, to the extent applicable, is required pursuant to Section 2 (2) and
(5) of the Netherlands Decree on the Supervision of the Securities Trade 1995 and the
Netherlands Further Regulation on the Supervision of conduct on the Securities Trade 2002.
Unless expressly stated otherwise in this Information Memorandum, the information included in this
information memorandum has not been audited. We believe that our procedures provide a
reasonable basis for our opinion.
In our opinion, the information memorandum at least contains the information which, to the extent
applicable, is required pursuant to Section 2 (2) and (5) of the Netherlands Decree on the
Supervision of the Securities Trade 1995 and the Netherlands Further Regulation on the
Supervision of conduct on the Securities Trade 2002.
Amsterdam, 23 March 2006
for Ernst & Young Accountants
R.G.H. Leonards C.G.J. de Lange
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12. ADDITIONAL INFORMATION
IG Markets' offering of and entering into CFDs in The Netherlands have been duly authorised by a
resolution of the Management Board of IG Markets dated 23 March 2006.
CFDs with IG Markets will not be listed on any securities exchange.
12.3 Use of proceeds
IG Markets' net proceeds from CFDs are used for general corporate purposes.
12.4 Documents available
This Information Memorandum and IG Markets' most recent annual report, annual accounts, semi-
annual figures, Memorandum of Association and Articles of Association, are available for
inspection (and copies may be obtained) at the following address:
5035 DJ Tilburg
PO Box 1103
5004 BC Tilburg
T +31 (0) 13 547 0653
F + 31 (0) 13 547 0624
12.5 Underlying markets and companies
References in this Information Memorandum or in any other materials prepared by us to any share
traded on any exchange or to any share, stock, index, commodity or currency on which a CFD is
based are included solely for the purposes of identification of the underlying instruments to which
those CFDs relate. Such references are not to be construed as an express or implied endorsement
of such share, stock, index, commodity or currency. We do not, therefore, accept any liability or
responsibility for, and make no representation or warranty, express or implied, as to, the accuracy
or completeness of such information. You should make your own enquiries.
We are not associated or affiliated with, nor endorsed or approved by any company, market or
market index referred to directly or indirectly in this Information Memorandum. References in this
Information Memorandum to the names of any markets or market indices are references to
markets or indices owned or operated by third parties who are not in any way associated with us,
and are used purely for the purposes of illustration. References in this Information Memorandum to
trade marks associated with or used in relation to such markets or indices are references to names
or trade marks owned or claimed by third parties who are not in any way associated with us.
12.6 No litigation
IG Markets is not nor has in the recent past been involved in any litigation or arbitration which
could have or has had a material effect on its financial and fiscal position.
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12.7 No interruptions
There are no interruptions in the activities of IG Markets which could have or in the recent past
have had a material effect on its financial position.
12.8 Significant change
There has been no material adverse change in the condition (financial or otherwise) or prospects
of the Company (taken as a whole) in the recent past.
12.9 Supplemental Information Memorandum
If any of the information set out in this Information Memorandum becomes inaccurate or out of
date, or if there is a material change in (or a significant event that affects) any of the matters
referred to, we will issue a Supplemental Information Memorandum (“SIM”). Generally we will issue
the SIM by publishing it on our website and making it available at the address mentioned in section
12.4. You agree to this method of issue when you open an account with us, and you accept
responsibility for checking our website for any such SIM. You also waive your right to any more
positive notification of such changes, e.g. by e-mail or post.
12.10 Complaints procedure
Any complaints will first be investigated by our customer services department and, if they are
unable to resolve the dispute to your satisfaction, by our compliance department.
If you would like more information on how complaints are handled, please contact our customer
The financial statements of IG Markets for the financial years 2003, 2004 and 2005 have been
audited by Ernst & Young LLP, who issued an auditors report thereon at the dates of issuing.
Ernst & Young Accountants are the auditors to IG Markets in relation to compliance with Section 2
(2) and (5) of the Netherlands Decree on the Supervision of the Securities Trade 1995 and the
Netherlands Further Regulation on the Supervision of conduct on the Securities Trade 2002. They
do not have responsibility for the fairness of the financial information included in this Information
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IG Markets Limited
157-168 Blackfriars Road
London SE1 8EZ
DUTCH LEGAL ADVISORS TO THE ISSUER
De Brauw Blackstone Westbroek
5th Floor, East Wing
10 King William Street
London EC4N 7TW
AUDITORS TO THE ISSUER
Ernst & Young LLP
1 More London Place
London SE1 2AF
Ernst & Young Accountants
1083 HK Amsterdam
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