advice anyone ftse 100 cash ig markets, page-22

Its a long post but they have basically given you warning in alot of mumbo jumbo. This is just for IG. CMC are similar but are Sydney based from what I understand, but do have similar terms and conditions.

I posted this a while ago more for updating markets on disclosure requirements of CFD provider's hedge positions. Key Terms and Conditions are at the bottom of the post.




Points that stand out to me are 1). they can use your cash balance for any purpose they see fit, 2).They say they will not purchase the underlying in one clause, but... 3). In the next they say they may hedge your contract by instructing a third party to buy the underlying. 4)Their liquidation terms are very grey 5).Jurisdiction of court proceedings are outside Australia.

Keep in mind these questions when reading below 1).THE BIG QUESTION: who is the third party buying the shares as instructed by IG, and how are these shares being held and used. (Smells of Opes Prime)

2).If they are not purchasing the underlying, why cant they offer prices outside ASX trading hours.

3). If they are not buying the underlying, are they using anything other than cash as security.

4). If the govt/ASIC cracks down on the third party that is buying the underlying on instruction from IG - how will that effect IG's hedging.




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4.3 Your money is deposited in a separate account
Any money that you deposit with us will be held separately from our
money, in a trust account, and held and dealt with in accordance with
the Governing Legislation and the Customer Agreement. However, you
consent that we are entitled amongst other things to:
withdraw, deduct or apply any sums payable by you to us and/or
any Associate Company of ours including, without limitation,
making a payment in respect of the margining, adjusting or
settling of CFDs entered into by you with us or the payment of
finance charges or interest to us, with all such amounts belonging
to us under the Customer Agreement;
pay, withdraw, deduct or apply any amounts from your money
held in any separate account, and to use such money in our
business from time to time, including for the payment of amounts
to our counter-parties;
your money may be co-mingled into one or more separate
accounts with our other customers’ money;
we are obliged to pay any money due to you in relation to
dealings in CFDs into a separate account;
the obligations to you under the Customer Agreement and
the CFDs are unsecured obligations, meaning that you are an
unsecured creditor of ours.

5.17 Other matters you should consider
No interest in underlying instrument
Neither you nor we acquire any interest in or right to acquire, and
neither party is obliged to sell, purchase, hold or deliver or receive, the
underlying instrument of any CFDs that you and we deal in.

4. Providing a quote
(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;

19. Market abuse
(1) We will frequently hedge our liability to you by opening analogous
positions with other institutions or in the Underlying Market. 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.

22. Suspension and insolvency
(4) If a company, who’s Instrument represents all or part of the subjectmatter
of a Transaction, de-lists from the exchange where its shares are
listed, ceases to be publicly traded, goes into external administration
or a receiver or a receiver and manager is appointed or it is otherwise
wound up, the day on which the company de-lists, ceases to trade
publicly, or (at IG’s reasonable discretion in the event of several of
these listed events being applicable) the day external administrator
or receiver or receiver and manager is appointed or the company is
otherwise wound up 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. The provisions of this Term 22(4) will not apply to Transactions
on stock indices.
9. Information about IG Markets Ltd

4. Termination and Liquidation
(This whole section is one grey area)


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.

IG Markets Limited is a company incorporated in England and
regulated by the UK Financial Services Authority and which holds an
Australian Financial Services Licence issued by the Australian Securities
and Investment Commission, number 220440. IG Markets Limited is
registered in Australia as a foreign company (ABN 84 099 019 851).
IG Markets Limited is a subsidiary of IG Group Limited, a UK speciality
finance and derivatives company offering off-exchange/over-the-
counter (OTC) derivatives including CFDs. The IG group was founded in
1974 and employs approximately 400 staff worldwide.
The Australian Securities and Investments Commission holds no
responsibility for the contents of this PDS or any other materials
provided to you by IG Markets Ltd.