What we do with your money

The essentials

How does IG Europe GmbH manage client money and ETPs?

Unlike banks, investment firms like IG Europe GmbH are required to separate client money and assets including Exchange Traded Products (ETPs) from their own resources. This means that we’re not allowed to use them during our business activities, and that client money and assets are completely protected in the unlikely event that IG Europe GmbH became insolvent. (Please see below)

IG Europe GmbH is regulated by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin). BaFin oversees firm’s compliance with the relevant rules for protecting client funds (§84 WpHG, §16 MiFID, §10 WpDVerOV).

What happens to the money I deposit with IG Europe GmbH?

Client funds are held separately from IG Europe GmbH's own assets in fiduciary accounts. Your deposits therefore remain your property, but are held separately from IG's assets. Therefore, in the event of insolvency, neither IG Europe GmbH nor its creditors can assert claims, liens rights or retention rights in this respect.

IG Europe GmbH divides the fiduciary custody among various banks. Further information about how IG Europe GmbH holds your client funds and ETPs can be found here.

In order to diversify our credit risk, we will hold client funds not only with reputable banks, but also in QMMFs, taking into account the relevant regulations. A QMMF consists primarily of low-risk investments such as government bonds.

What makes them “qualifying” is that the QMMF must meet higher regulatory standards for quality and liquidity than other money market funds.

QMMFs offer an alternative way for IG to hold your client money funds without compromising their security. They are a standard tool used by large financial institutions to diversify credit risk.

IG Europe GmbH will place funds in some of the largest and most established QMMFs in the world, managed by leading fund managers such as Blackrock and JP Morgan Asset Management. Details can be found here.

What happens to ETPs that I have bought from IG Europe GmbH or hold through IG Europe GmbH?

Your ETPs are held in trust by a reputable custodian bank and are legally regarded as separate assets. Just like client money, they remain your explicit property and neither IG Europe GmbH nor its creditors can assert claims, liens or rights of retention in this regard. Your ETPs can be held together with ETPs of other clients (collective custody), but under no circumstances with IG Europe GmbH's own ETPs. Details can be found here.

What happens to client money or ETPs if IG Europe GmbH or the custodian banks go into liquidation?

In the unlikely event of IG Europe GmbH's insolvency, all our clients will receive their segregated money and ETPs back from the custodian banks, minus the administrators cost’s in handling and distributing these funds.

IG Europe GmbH is assigned to the Compensation Scheme for Securities Trading Companies (Entschädigungseinrichtung der Wertpapierhandelsunternehmen – EdW). The EdW grants private (small) investors in particular minimum protection for their claims from securities transactions against an assigned institution. The EdW pays compensation in accordance with the Investor Compensation Act (AnlEntG) if an assigned securities trading company gets into financial difficulties and is no longer able to fulfil its liabilities to its clients arising from ETP transactions. The German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht - BaFin) determines when this condition is met and publishes this determination in the German Federal Gazette. The amount of compensation per investor is 90% of his claims from ETP transactions (maximum EUR 20,000) against the ETP trading company concerned. There is no entitlement to compensation if funds are not denominated in the currency of an EU member state or in euros. Further grounds for exclusion are set out in Section 3 (2) AnlEntG.

Private individuals, partnerships and small corporations are entitled to protection and compensation. Exceptions to this are credit institutions and financial services institutions, insurance companies, capital management companies, medium-sized and large corporations and the public sector (Section 3 (2) of the Investor Compensation Act - AnlEntG), which are held in safekeeping by IG on the basis of a separate agreement with IG ("Title Transfer Collateral Arrangement") by way of full title transfer, but not separately.

If it is not possible for the custodian bank to pay out the client funds, the following applies.

For IG Europe GmbH clients, funds held in third-party custody are covered by the Deposit Protection Act up to a value of €100,000 (or the equivalent in foreign currency, depending on the scope of protection of the respective banks). The funds of IG Europe GmbH clients are only held by banks that fall under this protection scheme. Details can be found here.

If funds are held in a QMMF, deposit guarantee schemes are not relevant. The same strict security regulations apply to the allocation of QMMFs as for shares. This means that your assets are segregated from the company's assets and are fully recoverable in the highly unlikely event that IG Europe GmbH goes out of business.

The QMMF is a separate, independent segregated fund from the fund manager. This means that even in the event of Blackrock's insolvency, for example, this will have no impact on the QMMFs issued by Blackrock.

In the event of a credit event, the QMMF may not be able to repay investors. In view of the diversification, the holding of short-term instruments, minimum creditworthiness and regulatory standards, the risk of this is considered to be low.

This page should provide you with key information, but if you have any questions you can email helpdesk@ig.uk.com or call +35 318 009 95364.