IG to Re-Price Swiss Franc Trades after Financial Ombudsman Decision
Following a determination by the Financial Ombudsman Service, the company announces an additional £1 mln loss due to CHF trades
One of the major U.K. brokers which lost a major amount of funds during the Swiss franc crisis, IG Group Holdings plc (LON:IGG), has just released an announcement via the London Stock Exchange website, detailing that the firm will be adjusting the fill rates for its clients on Swiss franc trades on the 15th of January.
The Swiss franc Black Swan has already impacted the company, as it announced in the aftermath that it was facing up to £30 million losses ($45.7 million). The decision of IG Group Holdings plc (LON:IGG) was taken after the U.K. Financial Ombudsman Service (FOS) determined that the fill rate which a particular client got in the aftermath of the Swiss National Bank removing the floor under the EUR/CHF could have been better.
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The decision will affect all of the Swiss franc trades on that day, yet the adjustment to the fill rate does not appear to be very substantial, since the additional financial impact for the broker is close to £1 million. IG Group has previously stated that it expects to cover the majority of client losses suffered on the 15th of January.
Clients of the company have been vocal about the fill rates at which their trades were executed, as the brokerage provided a rate of 0.9250 on the EUR/CHF pair. The rate has been much lower when compared to a number of other retail brokers who started filling client orders at rates above 1.1200.
Any mathematicians or maybe philosophy majors can explain the following puzzle? @ fill of 0.9250 there was a neg balance of £18mn With their new revised fill of 1.02493 it will cost them about £1mn Bearing in mind I think most people would have probably gone negative at something around 1.19, the cost to IG should be close to half the £18mn…more like £8mn On top of that, they offered most clients goodwill of 20-30% in the UK and bigger goodwills in Germany and Italy. What seems to be done here is purely a marketing ploy to make people think… Read more »
Doing this, for a listed company, thru an official RNS would be pure suicide, clients and shareholders would kill the company… Maybe you’re not good at maths, that’s all…
Well that’s why I asked…I’m no good at maths! 😉
That was more than a question “What seems to be done here is purely a marketing ploy to make people think they look after their clients. Publicity stunt which we can all see through”
Ig is protected!. This link below is IG Markets Cell, cell, cell. False and misleading advertisement that claims ” React instantly” and “Take a position wherever you are”. But in there legalese product disclosure statement they can at will refuse or void any of your trades. This add was placed in Financial Review Smart Investor on sale 18th March 2011, April issue.( Note: Australia).
http://postimg.org/image/gj2fj… – I have very bad spelling, I am SHORT for words about IG.
http://postimg.org/image/gj2fj6hsj/
Please can you fix the link in my comment with this above.