RISK DISCLOSURE NOTICE

INTRODUCTION

This notice provides you with information about the risks associated with investment products, which you may invest in through services provided to you by IG Group entities, including IG Index Limited and IG Markets  Limited (‘IG’).

IG provides a wide range of investment services  and products through different accounts:

  • Spread bets are provided through a Spread Betting Account;
  • Contracts for difference (‘CFDs’) are provided through a

CFD Account;

  • Share Dealing services  are provided through three different products: a Share  Dealing  Account,  an IG Stocks and Shares  ISA and an IG SIPP; and
  • Discretionary management services are provided through an

IG Smart Portfolio Account.  These  services  can also be provided within an IG Stocks and Shares  ISA and an IG SIPP, (each an ‘Account’ and together, the  ‘Accounts’).

All financial investments involve  an element of risk. The value of your investment may fall as well as rise and you may get back less  than your initial investment. With Spread  bets and CFDs your losses may exceed your deposits. It is therefore possible for you to owe  additional money to IG.

To find out the risks which are relevant to the account you have chosen, please see  the relevant sections below:

Section 1: Spread  bets and CFDs

Section 2: Share Dealing  services (execution only) Section 3: Discretionary Management services

(IG Smart Portfolios)

Section 4: General  Risks (applicable to all accounts)

This notice provides a general description of the risks of the products that  you are able  to trade, bet  or invest in through your IG Accounts, and the services  provided by IG.

This notice does not explain all of the risks involved in investment products or how such risks relate to your personal circumstances.

It is important that  you fully understand the risks involved before making  a decision to enter into a CFD or Spread bet  (each a ‘Contract’) with us, or to buy or sell an instrument using our Share Dealing  services  (each a ‘Transaction’) or appoint us to manage investments for you through an IG Smart Portfolio. If you are in any doubt about the risks involved with your Account,  you should  seek professional advice.

If you choose to enter  into a Contract with us, instruct us to conduct a Transaction on your behalf  or appoint us to manage investments for you, it is important that you remain aware of the risks involved, that you have adequate financial resources to bear such risks and that you monitor  your positions carefully.

SECTION 1: SPREAD BETS AND CFDs

Spread  bets and CFDs are high risk financial products, which are not appropriate for many members of the public.

CONTRACTS FOR  DIFFERENCE (CFDs)

CFDs are a type  of transaction the purpose of which is to secure a profit or avoid a loss by reference to fluctuations in the value or price of an underlying instrument. Types of CFDs include  but are not limited to, Foreign Exchange CFDs, Futures CFDs, Option CFDs, Share  CFDs and Stock Index CFDs. CFDs can only be settled in cash.

Investing  in a CFD carries a high degree of risk because the ‘gearing’  or ‘leverage’ often obtainable means  that a relatively small movement in the market 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. You may need to provide further funds with little or no notice. It is possible to lose more money than you have deposited into the account.

SPREAD BETTING

A financial spread bet  is an agreement to exchange the difference between the open and closing  value of the bet.  When you place a financial spread bet,  you are speculating on the direction of the future price movements in an underlying instrument. You specify an amount you want to bet  on each  point  movement of the underlying instrument or index.

Investing  in a spread bet  carries a high degree of risk because the ‘gearing’  or ‘leverage’ often obtainable means  that a relatively  small 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. You may need to provide further funds with little or no notice. It is possible to lose  more money than you have deposited into the account.

NO  ADVICE

Our services  are provided on an execution only basis. We do not provide investment advice  in relation  to CFDs or spread bets. We sometimes provide factual information or research recommendations about a market, information about transaction procedures and information about the potential risks involved and how those risks may be minimised. However,  any decision to use our products or services  is made by you.

You are responsible for managing your tax and legal affairs including making  any regulatory filings and payments and complying with applicable laws and regulations. We do not provide any regulatory, tax or legal advice.  If you are in any doubt as to the tax treatment or liabilities of investment products available  through your CFD or spread betting Account,  you should  seek independent advice.

APPROPRIATENESS

Before we enable you to trade on a CFD or spread bet  account, we are required to make an assessment of whether the product(s) and/ or services  you have chosen are appropriate for you, and to warn you if, on the basis of the information you provide to us, any product or service is not appropriate. Any decision to open an account and to use our products or services  is yours. It is your responsibility to understand the risks involved with our products or services.

SECTION 1: SPREAD BETS AND CFDs (CONTINUED)

During our application process, we will ask you for information about your financial assets and earnings. We do not monitor on your behalf whether the amount of money  you have sent  to us or your profits or losses  are consistent with that  information. It is up to you to assess whether your financial resources are adequate for your financial activity with us and your risk appetite in the products and services you use.

 SPREAD BETS AND CFDs GENERAL RISKS                                  

Our spread bets and CFDs are not listed on any exchange. The prices and other conditions are set by us in accordance with our obligation to provide best execution as set out in our order execution policy, to act reasonably and in accordance with the applicable Customer Agreement. Each CFD or spread bet  you open with us (including where  you have opened a CFD via our Direct Market Access platform)  results  in you entering into a Contract with us. These  Contracts can be closed only with us, and are not transferable to any other person. No Contracts provide any right to the underlying instruments or voting rights.

All Contracts you enter into with us are legally enforceable by both parties.

RANGE OF MARKETS

We offer our Contracts across  a wide range of underlying markets. Although the prices at which you open Contracts are derived from the underlying market, the characteristics of our Contracts can vary substantially from the actual  underlying market  or instrument. Full details of all of our Contracts are set out in the Product Details section on our website, including:  contract size, margin  rates,last dealing time, settlement procedures, rollover procedures, commissions and currency.

NON-GUARANTEED STOPS

When a non-guaranteed stop  is triggered it has the effect of issuing an order from you to us to close your Contract. Your Contract is not closed immediately when the stop  is triggered. We aim to deal with such orders fairly and promptly but the time taken  to fill the order and the level at which the order is filled depends upon  the underlying market  and the number of client orders triggered. In fast-moving markets, a price for the level of your order might  not be available  or the market  might  move  quickly and significantly away from the stop  level before we are able  to fill it. To prevent this risk, guaranteed stops are available  on certain  Contracts.

CORPORATE EVENTS

We do not aim to make a profit from our clients from the outcome of corporate events such as rights issues, takeovers, mergers, share distributions or consolidations and open offers. We aim to reflect the treatment we receive, or, would receive  if we were hedging our exposure to you in the underlying market. Ultimately however, you are not dealing in the underlying market  and therefore in relation  to our Contracts:

  • the treatment you receive may be less advantageous than if you owned the underlying instrument;
  • we may have to ask you to make a decision on a corporate event earlier than if you owned the underlying instrument;
  • the options we make available to you might be more  restricted and less advantageous to you then  if you owned the underlying instrument; and/or
  • where you have a stop attached to your open share  position, the treatment that  you will receive  from us will always, to the  greatest extent possible, aim to preserve the economic equivalent of the rights and obligations attached to your Contract with us immediately prior to the corporate event  taking place.

GOING SHORT ON  INDIVIDUAL SHARES

Going  short  on an individual share  via a CFD or spread bet  carries some additional risks. These  risks include  but are not limited to:

  • forced buy-back due to changes in regulatory or stock-borrowing conditions;
  • imposition of, and increase in, borrowing charges over the lifetime of the Contract; and/or
  • the obligation to take the other side of purchase opportunities (eg rights issues) afforded to clients who are long on the same stock. This might result in the obligation to go further short at unfavourable market  prices.

In addition, you should  be aware that  corporate events affecting obligations of short  sellers can often  be announced at very short notice, leaving no opportunity (or choice) to close Contracts out and avoid participation.

GENERAL TRADING RISKS

Even though the characteristics of your Contract will vary from those of the underlying instrument or market, it is important that you understand the risks associated with trading in the relevant underlying market  because fluctuations in the price of the underlying market  will affect your instruments and the profitability of your trades. Spread bets and CFDs are financial products that  allow you to speculate on price movements in underlying markets and although the prices at which you trade these products are set by us, our prices are derived from the underlying market. Please see  Section  4 for more  details.

PAST PERFORMANCE

Past performance is not an indication of future performance. The value of investments can go down as well as up.

CURRENCY

If you trade in a market  denominated in a currency  other than  your base currency,  currency  exchange fluctuations will impact  your profits and losses.

VOLATILITY

Movements in the price of underlying markets can be volatile. This will have a direct  impact  on your profits and losses.  Knowing the volatility of an underlying market  will help  guide you as to where any Stops  should  be placed. It should  be noted that  volatility can be unexpected and unpredictable.

GAPPING

Gapping is a sudden shift in the price of an underlying market  from one  level to another. Various factors  can lead  to gapping (for example, economic events or market  announcements) and gapping can occur both when the underlying market  is open and when it is closed. When these factors  occur when the underlying market is closed, the price of the underlying market  when it reopens (and therefore our derived price) can be markedly  different from the closing  price, with no opportunity to sell your instruments before the market  opens. Unlike a guaranteed stop, a non-guaranteed stop  will not protect you against the risk of gapping.

MARKET LIQUIDITY

In setting our prices,  spreads and the sizes in which we deal,  we take into account the market  or markets for the relevant underlying instruments. Market conditions can change significantly in a very short period of time, so that  if you wish to sell an instrument or close a Contract, you may not be able  to do so under the same  terms  as when you purchased or opened it. 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  under the rules of the relevant exchange trading is suspended or restricted.

GENERAL TRADING RISKS (CONTINUED)

OUT-OF-HOURS MARKETS

During the out-of-hours sessions on index markets, our quotations reflect our own view of the prospects for a market. This could  include referring to price movements in other relevant markets which are open. Furthermore, business done by other clients may itself affect our quotations. There  may be nothing against which to measure our quotation at these times.

GEARING AND LEVERAGE

Before you are allowed  to enter into a Contract with us, you will generally be required to deposit money  with us – this is called the margin  requirement. This margin  requirement will usually be a relatively modest proportion of the overall Contract value, 10% of the Contract value, for example. This means that  you will be using ‘leverage’  or ‘gearing’  and this can work for or against you; a small price movement in your favour can result in a high return  on the margin  requirement placed for the Contract, but a small price movement against you may result in substantial losses.

At all times during  which you have open positions, you must ensure that  your account balance, taking into account all running  profits and losses,  is equal to at least the total margin  requirement that  we require you to have deposited with us. Therefore, if our price moves against you, you may need to provide us with significant  additional funds immediately to meet your margin  requirement and maintain your open positions. If you do not do this, we will be entitled to close one  or more  or all of your positions. You will be responsible for any losses  incurred as a result.

You should  also be aware that  under the applicable Customer Agreement we are entitled to increase margin  rates  at short  notice. If we do so, you may be required to deposit additional funds into your account to cover the increased margin  rates.  If you do not do this, we will be entitled to close one  or more  or all of your positions.

Unless you have taken  steps to place  an absolute limit on your losses  (for example, by attaching a guaranteed stop) it is possible for adverse market  movements to result in the loss of the whole of your account balance and more,  so that  you owe additional money  to us. We offer a range of risk management tools to help  you to manage this risk.

The need to monitor your positions is of greater importance when you have entered into Contracts with us because of the effect of gearing. Gearing magnifies the rate  at which profits or losses  can be incurred and, as a result, it is important that  you monitor your positions closely.

DIGITAL 100s & SPRINTS

Digital 100s & Sprints are both Binary products. Binary bets are a type  of financial spread bet  that  can be placed through a Spread Betting  Account,  Binary Options are a type  of CFD available  on a CFD Account  (collectively ‘Binaries’). Binaries share  many of the same trading risk characteristics as Spread Bets and CFDs, but due  to the different pay out structure there are some different features to be aware of:

  • There is no effect of leverage
  • For some types of Binary you will not be able to close the position prior its expiry time.

When trading binaries your capital  is at risk. Whilst the amount you can win or lose when trading binaries is fixed there is potential to make substantial losses.  This can include  losing your entire initial investment.

SECTION 2: SHARE DEALING SERVICES (EXECUTION ONLY)

IG’s Share  dealing services  are offered through Share  Dealing Accounts, IG Stocks and Shares  ISA and IG SIPPs. Our Share  dealing services  allow you to instruct  us to buy or sell financial instruments (Shares and Exchange Traded Products) on your behalf.

All instruments offered through our Share  Dealing  Services are listed on an exchange, which means that  the prices are not set by us. We will act on any instruction that  you provide us to buy or sell an instrument on your behalf  in accordance with our obligation to provide best execution as set out in our order execution policy, to act reasonably and in accordance with the applicable Customer Agreement. We may place  your instructions to deal  outside of an exchange if this satisfies our order execution policy.

As part of our service, we will arrange for the custody of your instruments.

All investments purchased for you or transferred to us by you into your IG Share  Dealing  Account  or IG Stocks and Shares  ISA, will be purchased in the name of and/or held  by a nominee company selected by us, for the benefit of you.

Investments purchased for you or transferred to us by you into your IG SIPP Account  will be purchased in the name of and/or held  by a nominee company selected by us for the benefit of the trustee(s)  of your SIPP.

As investments will be held  in the name of a nominee company, you may not have voting rights which you would have had if you held  the investment in your own name.

All financial investments involve  an element of risk. The value of any investment you make through  our Share dealing services may fall as well as rise and you may get back less  than your initial investment. Past performance is not an indication  of future performance.

The risks you are exposed to will vary according to the instruments you instruct  us to buy and sell on your behalf.

You should  be aware that:

  • Physical shares admitted to trading on a regulated market are not high risk financial products; and
  • Many Exchange Traded Funds (ETFs) are not high risk financial products;
  • Exchange Traded Commodities (ETCs) and certain ETFs are considered high risk financial products, normally due to their use of derivatives, and are not appropriate for many members of the public.

Currency Risk: If you trade in a market  denominated in a currency other than  your base currency,  currency  exchange fluctuations will impact  your profits and losses.

Liquidity Risk: Under certain  market  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  under the rules of the relevant exchange trading is suspended or restricted.

SECTION 2: SHARE DEALING SERVICES (CONTINUED)

NO  ADVICE

Our services  are provided on an execution only basis. We do not provide investment advice  in relation  to Share dealing services or products available  for you to trade through our Share dealing services, such as Shares  or ETFs. We sometimes provide factual information or research recommendations about a market, information about transaction procedures and information about the potential risks involved and how those risks may be minimised.

However,  any decision to use our products or services  is made by you.

You are responsible for managing your tax and legal affairs including making  any regulatory filings and payments and complying with applicable laws and regulations. We do not provide any regulatory, tax or legal advice.  If you are in any doubt as to the tax treatment or liabilities of investment products available  through your Share  Dealing  Account,  IG ISA or IG SIPP, you should  to seek independent advice.

APPROPRIATENESS

The majority of instruments in which you can invest through our Share dealing services  are considered ‘non-complex’ and are not high risk financial products. However,  because ETCs, Exchange Traded Notes and certain  ETFs are considered high risk financial products, where  we make these available  to you we are required to make an assessment of whether these products are appropriate for you, and to warn you if, on the basis of the information you provide to us, that they are not appropriate. We will usually do this before you are able to invest in high risk products. Any decision to open an account and to use our products or services  is yours. It is your responsibility to understand the risks involved with our products or services.

During our application process, we will ask you for information about your financial assets and earnings. We do not monitor on your behalf whether the amount of money  you have sent  to us or your profits or losses  are consistent with that  information. It is up to you to assess whether your financial resources are adequate for your financial activity with us and your risk appetite in the products and services you use.

INVESTMENT SPECIFIC RISKS

SHARES

Shares,  known as equities, represent a portion of a company’s share capital.  The extent of your ownership in a company depends on the number of shares you own in relation  to the total number of shares in issue.

Shares  are bought and sold on stock exchanges and their values can go down.

In respect of shares in smaller companies, there is an extra risk of losing money  when such shares are bought or sold. There  can be a big difference between the buying  and selling price of these shares.

If they have to be sold immediately, you may get  back much less than you paid  for them.

Shares  in companies incorporated in emerging markets may be harder to buy and sell than  those shares in companies in more developed markets and such companies may also not be regulated as strictly.

EXCHANGE TRADED FUNDS (ETFs)

ETFs are open ended collective  investment schemes (‘CIS’) that  trade throughout the day like a share  on the secondary market  (i.e. through an exchange). Each ETF seeks  to track a benchmark and holdings are not altered in rising or falling markets, so when the benchmark falls in value, the ETF will too.  ETFs can be physical (where the fund invests directly in the underlying assets that  comprise the index) or synthetic (where the fund gains exposure to the index by entering into a swap agreement with a counterparty).

You should  read  the terms  of any key investor  information document or prospectus carefully before deciding on an investment. The value of ETFs can fall as well as rise, and you could  get  back less than

you initially invest. It is your responsibility to ensure that  you fully understand the contents of the documentation provided and if you are in any doubt you should  seek professional advice.

The risks of each  ETF are dependent on the benchmark the ETF seeks  to track (i.e. what the ETF itself is invested in). For example, ETFs which invest in emerging markets are often  subject to higher levels of volatility than  those invested in the developed world and the price of ETFs which invest in bonds will likely change if interest rates  do. ETFs that  focus on a specific country  or sector may display greater volatility than  those tracking  the the wider market  and so should  be considered as higher  risk than  more  diversified  ETFs. However,  there are no guarantees that  an ETF will have the same characteristics as the benchmark index and the returns will vary from that  of the benchmark index.

The use of derivatives within some ETFs means that  these products may not be appropriate for many investors. Their characteristics may differ more  widely from the benchmark index than  those which do not use derivatives and they should  be considered higher  risk. In relation  to ETFs that  you may purchase through your Share  Dealing Account,  IG Stocks and Shares  ISA or IG SIPP Account,  you do not have any right to the underlying instruments.

It may not be possible to trade units or shares in ETFs if there is no liquid market. If there is low liquidity in the market  then  you may not be able  to buy or sell units at a price considered to be fair.

Any income you receive  from your investment in an ETF may vary with the dividends or interest paid  by the underlying investments and so could  fall as well as rise.

Full details of the ETFs offered are set out in the Product Details on our website.

EXCHANGE TRADED COMMODITIES

ETCs are non-CIS exchange traded products and as such, are generally subject to less regulation than  ETFs. This means that  you might  have less investor  protection if you chose to invest in ETCs. ETCs follow the price movement of the underlying asset (usually the price of a commodity) and can gain exposure to a wide range of markets without  the cost of investing  directly. ETCs can be physical (where the fund invests directly in the underlying assets that comprise the index) or synthetic (where the fund gains exposure to the index by entering into a swap agreement with a counterparty).

The characteristics of ETCs can vary substantially from the underlying market  to which they provide exposure. As with shares, the value of your investment can go down as well as up and you might  not get back the original amount you invested. The use of derivatives within some ETCs means that  these products may not be appropriate for many investors  and they should  be considered higher  risk.

It may not be possible to trade shares in ETCs if there is no liquid market. If there is low liquidity in the market  then  you may not be able  to buy or sell units at a price considered to be fair.

In relation  to ETCs that  you may purchase through your Share Dealing Account,  Stocks and Shares  ISA or SIPP Account  you do not have any right to the underlying instruments.

COLLATERAL RISKS

When you enter into the Collateral Customer Agreement with us, we agree to take security over the assets in your Share  Dealing  Account in place  of cash for payment of margin  on your linked CFD Account or Spread Betting  Account  as applicable.

The value of shares,  CFDs and spread bets will rise and fall. If the collateral  value of the assets in your Share Dealing  Account, together with any cash on your linked CFD Account  or Spread Betting Account  as applicable, falls below the amount  required to maintain your open positions, you may be closed out of your spread bet  or CFD positions on that linked account, and we will have the right to sell the assets in your Share Dealing  Account  in order to pay for any resulting deficit.

As the value of the assets in your Share  Dealing  Account  fluctuates, the value of the collateral that  you can utilise as margin  will also fluctuate. You will need to monitor your Share  Dealing  Account  and your linked CFD Account  or Spread Betting  Account  to ensure that the collateral value and any cash you have deposited on your linked CFD Account  or Spread Betting  Account  is sufficient to fund your open positions on that  account.

You will only be able  to use our collateral services  to cover margin requirements on open positions on your linked Spread Betting Account  or CFD Account  and you will need to cover any running losses using the available  cash in your linked Spread Betting  Account or CFD Account.

SECTION 3: DISCRETIONARY MANAGEMENT SERVICES (IG SMART PORTFOLIOS)

IG’s discretionary investment management services  are provided through IG Smart Portfolios.  IG Smart Portfolios  can be held  in an IG Smart Portfolio general investment account, an IG Stocks and Shares  ISA and an IG SIPP.

These  services  allow you to appoint IG to manage investments in ETFs on your behalf  in seeking a specific investment objective. As part of our service, we will arrange for the custody of your instruments. All investments bought or transferred to us on your behalf  in your IG Smart Portfolio will be purchased in the name of and/or held  by a nominee company selected by us, for the benefit of you unless  your IG Smart Portfolio is held  in an IG SIPP, in which case  they will be held  by a nominee company selected by us for the benefit of the trustee(s)  of your SIPP. We are not obliged to but we may tell you of, or arrange the exercise of any voting rights attaching to Instruments we hold on your behalf,  whether exercisable at an annual  general meeting or otherwise.

All financial investments involve  an element of risk. The value of your IG Smart Portfolio may fall as well as rise and you may get back less  than your initial investment. Past performance is not an indication  of future performance and should  not be the sole factor of consideration when  making an investment decision.

The specific  risks to which you are exposed to will depend on the underlying  investments held in your IG Smart Portfolio. These investments will be Exchange Traded Funds (‘ETFs’). More information about  the risks of investing in ETFs is below.

ADVICE

In order to guide you to the right IG Smart Portfolio, we will present you with a series  questions to assess your attitude to investing. This will allow us to ‘match up’ your answers  to one  of our predetermined IG Smart Portfolios.  This does not constitute a personal recommendation specifically for you – it only matches you up with a pre-determined portfolio which most  people with a similar risk score to you would be recommended. It does not take into account  your wider financial situation  or investment needs.

We sometimes provide factual information about IG Smart Portfolios and the underlying investment held, information about the potential risks involved and information on which portfolio other clients with a similar risk tolerance to you may choose. However,  any decision to use our products or services  is made by you. You are responsible for managing your tax and legal affairs, including making  any regulatory filings, payments and complying with applicable laws and regulations. We do not provide any investment, tax or legal advice.  If you are in any doubt as to the tax treatment or liabilities of investment products available  through your IG Smart Portfolio, you should  seek independent investment, financial or legal advice.

SUITABILITY

Before we can manage investments on your behalf,  we are obliged to undertake an assessment to ensure that  the transactions we instruct on your behalf  are suitable for you. This includes assessing your knowledge and experience, investment objectives (including risk tolerances) and financial situation where  they are relevant to IG Smart Portfolios.  Please be aware that,  given the limited nature of IG Smart Portfolios,  we are not obliged to make a comprehensive assessment of your financial situation and other investments. Therefore our assessment in relation  to your IG Smart Portfolio does not take into account for example your broader investment portfolio or level of debt.

It is up to you to assess whether your broader financial resources are adequate for your financial activity with us in the products and services  you use. It is your responsibility to understand the risks involved with our products or services.

RISKS OF EXCHANGE TRADED FUNDS (ETFs) WITHIN A SMART PORTFOLIO

ETFs are open ended collective  investment schemes (‘CIS’) that  trade throughout the day like a share  on the secondary market  (i.e. through an exchange). Each ETF seeks  to track a benchmark and holdings are not altered in rising or falling markets, so when the benchmark falls in value, the ETF will too.  ETFs and can be physical (where the fund invests directly in the underlying assets that  comprise the index) or synthetic (where the fund gains exposure to the index by entering into a swap agreement with a counterparty).

The value of ETFs can fall as well as rise, and you could  get  back less than  you initially invest. The specific risks of each  ETF are dependent on the benchmark the ETF seeks  to track (i.e. what the ETF itself is invested in). For example, if an ETF trades in a currency  which is different to the base currency  of your IG Smart Portfolio, change in foreign  exchange rates  will impact  the performance of your portfolio. ETFs which invest in emerging markets are often  subject to higher  levels of volatility than  those invested in the developed world and the price of ETFs which invest in bonds will likely change if interest rates  do. ETFs that  focus on a specific country  or sector may display greater volatility than  those tracking  the wider market  and so should  be considered as higher  risk than  more  diversified  ETFs. However,  there are no guarantees that  an ETF will have the same characteristics as the benchmark index and the returns will vary from that  of the benchmark index.

The use of derivatives within some ETFs means that  these products may not be appropriate for many investors. Their characteristics may differ more  widely from the benchmark index than  those which do not use derivatives and they should  be considered higher  risk. It may not be possible to trade units or shares in ETFs if there is no liquid market. If there is low liquidity in the market  then  we may not be able to buy or sell units at a price considered to be fair, which could  have a negative impact  on the value of your portfolio.

SECTION 3: DISCRETIONARY MANAGEMENT SERVICES (IG SMART PORTFOLIOS)

Any income you receive  from your investment in an ETF may vary with the dividends or interest paid  by the underlying investments and so could  fall as well as rise.

In relation  to ETFs that  you hold in your IG Smart Portfolio, you do not have any right to the underlying instruments.

More information about a specific ETF, including the risks of investing, can be found  on our website in the key investor  information document or prospectus which you should  read  carefully before deciding on an investment.

Full details of the ETFs held  in your IG Smart Portfolio are available  with the IG Smart Portfolio platform on our website.

SECTION 4: GENERAL RISKS (APPLICABLE TO ALL ACCOUNTS)

NEED TO MONITOR POSITIONS

It is important that  you monitor all of your positions closely. It is your responsibility to monitor your positions and during  the period that you have any open Contracts or Transactions, you should  always have the ability to access your Accounts.

ELECTRONIC COMMUNICATIONS

We offer you the opportunity to deal  and communicate with us via electronic means, for example by our dealing platform and, in certain circumstances, by email. Although electronic communication is often  a reliable  way to communicate, no electronic communication is entirely reliable  or always available. If you choose to deal  with us via electronic communication, you should  be aware that  electronic communications can fail, can be delayed, may not be secure and/or may not reach  the intended destination.

OUR SERVICES

Instructions to deal  from you to us form a commitment which may only subsequently be revoked by you with our prior consent (such consent will not be unreasonably withheld) at any time before the instruction to deal  is executed.

CLEARING HOUSE PROTECTIONS

On many exchanges, the performance of a transaction by us (or third-party with whom we are dealing on your behalf) is ‘guaranteed’ by the exchange or clearing  house and we may have the benefit of certain  legal protections from our clearing  member. However, it is unlikely that  in most  circumstances this guarantee or legal protections will cover you, the customer, and may not protect you if we or, another party were to default on obligations owed  to you.

INSOLVENCY

The insolvency or default of any other brokers involved with your transaction, may lead  to positions being liquidated or closed out without  your consent. In certain  circumstances, you may not get back the actual  assets that  you have invested and you may have to accept any available  payments in cash. On request, we will provide you with an explanation of the extent to which we will accept liability for any insolvency of, or default by, other firms involved with your transactions.

DEFAULT

Spread Betting  Accounts are provided by IG Index Limited. CFD Accounts, IG Share  Dealing  Accounts, IG Smart Portfolio Accounts, IG SIPPs and IG ISAs are provided by IG Markets  Limited. In the unlikely event  of IG suffering  a financial default and not being able to meet its obligations, IG is a member of the UK Financial Services.

Compensation Scheme which covers the first £50,000 of any claim to the relevant firm. Whether you are able  to claim depends on the type of business and your personal circumstances.

TAX

Our current  understanding of applicable UK tax law is that  spread bets are taxed as bets not as capital  gains. This can be advantageous when you make profits. However,  the tax treatment may change and is subject to HMRC interpretation in individual cases. We do not provide tax advice  and if you are in any doubt as to your tax obligations, you should  seek independent advice.

REGULATORY AND LEGAL RISK

The risk that  a change in laws and regulations will materially  impact a security and investments in a sector or market. A change in laws or regulations made by the government or a regulatory body  can increase the costs  of operating a business, reduce the attractiveness of investment and/or change the competitive landscape and as such alter the profit potential of an investment.

This risk is unpredictable and may vary from market  to market. In emerging markets such risk may be higher  than  in more  developed markets. For example in emerging markets the inadequacy or absence of regulatory measures can give rise to an increased danger of market  manipulation, insider trading or the absence of financial market  supervision can affect the enforceability of legal rights.

Comments are closed.