Culture and conduct
Our regulators expect us to be compliant, focusing on ensuring good outcomes for our clients – and they see culture as an important tool in achieving these aims. In the UK, the Financial Conduct Authority (FCA) extended the Senior Managers and Certification Regime to solo regulated firms like our UK entities. The regime aims to improve conduct in the financial services sector by ensuring that firms have clear accountability. It builds on the longstanding ‘Treating Customers Fairly’ expectations and aligns with a wider suite of regulatory requirements, including product governance.
One area that we need to keep in mind is conduct risk. This is the risk that a firm’s conduct may pose to achieving good outcomes for consumers, or to the sound, stable, resilient and transparent operation of the financial markets. Put another way, it’s the risk that clients or markets may suffer poor outcomes due to the way in which a firm carries out its business.
To mitigate against conduct risk, we have a comprehensive risk framework and risk management processes in place. We also have a strong culture of behaving ethically – both for our clients and for the markets in which we operate. We support fair and balanced regulation that offers positive outcomes for clients, as we feel this leads to a better industry in the long term.
To ensure that we comply with the relevant regulatory requirements, we have:
- A robust governance structure
- Highly competent and well-trained staff
- Products designed for our target market
- Marketing that is appropriately targeted
- Dealing practices that deliver best execution
- Strong protection of our clients’ money and assets
Licences
UK
IG Markets Limited (IGM) and IG Index Limited (IGI), incorporated in England and Wales, are separately licensed as investment firms by the FCA. In terms of the licences they hold, IGM and IGI may deal as principal or agent, and execute orders for a range of derivatives and securities. IGM may offer discretionary management services to professional and retail clients.
EU
Incorporated in Germany, IG Europe GmbH (IGE) has a regulatory licence from the German Federal Financial Supervisory Authority (BaFin) and Deutsche Bundesbank. This licence enables IGE to offer a direct service to our EU clients. It permits the same execution and dealing on financial markets as the licence held by IGM, but doesn’t permit IGE to offer discretionary management services.
Spectrum MTF Operator GmbH is authorised by BaFin and regulated as a multilateral trading facility (MTF) under MiFID. As such, it’s licensed to provide a trading venue for on-exchange leveraged trading products. Spectrum currently offers a 24/5 market for leveraged turbo warrants (Turbo24) which cover equities, indices, forex and commodities.
BrightPool Limited is an investment firm authorised and regulated by the Cyprus Securities and Exchange Commission (CySec). As such, it acts as a multi-asset market-making service provider, offering investment and ancillary services.
Switzerland
Incorporated in Switzerland, IG Bank SA (IGB) is authorised as a bank and securities dealer by the Swiss Financial Market Supervisory Authority (FINMA). The licence it holds permits the trading of bilateral non-tradable contracts for difference (CFDs) and other tailor-made derivatives on foreign exchange, equities, indices, precious metals, commodities and other underlying markets through one or more online platforms.
Dubai
IG Limited, incorporated in Dubai, is licensed by the Dubai Financial Services Authority (DFSA) to arrange deals in investments, providing custody and directly deal in investments as a principal in a range of investment types. Dealing in investments as a principal is limited to deals undertaken on a matched principal basis only.
South Africa
IG Markets South Africa Limited, incorporated within England and Wales, has a branch regulated by the Financial Sector Conduct Authority (FSCA) and is registered as an authorised financial services provider in South Africa. This permits the intermediary to offer (execution-only) services and non-automated advice on derivatives contracts on a variety of markets.
Singapore
IG Asia Pte Ltd (IGA) is regulated by the Monetary Authority of Singapore (MAS). It holds a Capital Markets Services licence under the Securities and Futures Act to deal in capital market products that are over-the-counter derivatives contracts on a variety of markets. As an Exempt Financial Adviser under the Financial Advisers Act, IGA is also permitted to issue analytic reports on investment products such as over-the-counter derivatives contracts and units in collective investment schemes.
Japan
IG Securities Ltd is regulated by the Japanese Financial Services Agency (JFSA) for Securities and Currencies, the Ministry of Economy, Trade and Industry (METI) for Hard Commodities, and the Ministry of Agriculture, Forestry and Fisheries (MAFF) for Soft Commodities. It has a licence to execute orders for derivatives contracts held for the financial instruments referenced above.
Australia and New Zealand
IGM is regulated in Australia by the Australian Securities and Investments Commission (ASIC) under an Australian Financial Services Licence. This licence allows the provision of general advice and dealing in derivatives, foreign exchange contracts and securities. It also allows IGM to make a market for derivatives and foreign exchange contracts, and to carry out custodial or depository services other than investor-directed portfolio services to retail and wholesale clients.
In New Zealand, IGM is regulated by the Financial Markets Authority (FMA) under a derivative issuers licence, covering a variety of derivative contracts.
US
IG US LLC (IG US) is registered as a retail foreign exchange dealer (RFED) and introducing broker (IB) with the CFTC, and is a member of the National Futures Association (NFA ID 0509630). IG US can offer rolling spot FX and options on an execution-only basis. It may not offer accounts to residents of Arizona or Ohio.
tastytrade is an award-winning US retail broker for active stock, options, futures or crypto traders. It’s a member of the Financial Industry Regulatory Authority (FINRA), Securities Investor Protection Corporation (SIPC) and National Futures Association (NFA).
Bermuda
Incorporated in Bermuda, IG International Limited (IG INT) is licensed by the Bermuda Monetary Authority to conduct investment and digital asset business. In terms of its licences, IG INT is permitted to offer CFDs on a range of asset classes, including cryptocurrencies, to retail clients on an execution-only basis.
Key regulations
We operate in a heavily regulated sector. As such, all our regulated entities are subject to a wide range of local and regional regulations that govern how we conduct our business. These include capital requirements such as the Capital Requirements Directive IV in the EU and the Packaged Retail and Insurance-based Investment Products Regulation, which defines the information we must provide to EU retail clients.
Regulatory changes have occurred in the EU, with the introduction of the Markets in Financial Instruments Directive II (MiFID II) and the General Data Protection Regulation in 2018. Since these are such wide-ranging regulations, we established significant project teams to ensure their correct implementation. Furthermore, we’ve taken care to ensure that they’ve been woven into the way we operate our business.
In Australia, we welcomed the introduction of legislation to better protect client money. This legislation came into effect in 2018, following a number of years where we worked closely with the Australian government as it sought to implement client money reforms.