Leading UK online trading firm IG Group Holdings plc (LON:IGG) began today what it plans to be a staged tightening of margin requirements for clients, leading up to the June 23 Brexit vote.
As with other leading forex brokers, IG expects increased volatility and possibly widening spreads among major currency pairs, as well as stock indices, as UK residents prepare to vote on an exit from the EU on June 23. In response, these brokers are reducing the amount of leverage that clients can use by upping margin requirements – both to protect the clients and the broker, and avoid situations which arose after the surprise spike in the Swiss Franc early last year which spelled doom for a number of forex brokers.
In IG’s case they have sent a note to clients (see below) stating that as of today (Friday June 10) the starting margin rates on trading the FTSE 100 and all GBP currency pairs will increase to 1%, up from 0.5%.
Additional increases will follow on next Friday June 17 and the following Wednesday June 22 – the day before the referendum – which will affect these and other markets. IG plans to send out further emails detailing these changes nearer the times in question.
The note sent to IG clients was as follows: