IG is a leading forex and CFD broker that provides online trading services to traders and investors worldwide. It offers an extensive range of trading instruments, including Forex, indices, Cryptocurrencies, Shares, Commodities. The broker supports various trading platforms and tools such as MT4, WebTrader, MobileTrader (MobileApp), ProRealTime.
IG is highly regarded for its regulation by multiple authoritative bodies, including the ASIC, FCA, JFSA, SFC (Hongkong), FSCA, MAS, FMA, GmbH, FINMA. This multi-regulatory oversight underscores its commitment to maintaining high safety and transparency standards.
In this article, we will explore IG’s FINMA regulation, its importance, the investor protection scheme, and negative balance protection. Additionally, we will provide information on other brokers regulated by the FINMA.
Does IG Operate Under FINMA Regulation?
Yes, IG operates under FINMA regulation. The broker’s FINMA license number is 684312. This regulation ensures that the broker adheres to the high standards set by the FINMA, providing a layer of security and trust for its clients. Being regulated by FINMA means that IG must follow strict guidelines to protect client funds, ensure transparency, and maintain the integrity of its operations.
What is FINMA?
FINMA regulation refers to the rules and oversight provided by the Swiss Financial Market Supervisory Authority (FINMA). Established in 2009, FINMA is responsible for supervising banks, insurance companies, stock exchanges, and financial intermediaries in Switzerland. It aims to ensure the stability and integrity of the Swiss financial system, as well as protect investors and consumers from financial risks.
Financial service providers, including forex brokers, must obtain a license from FINMA to operate in Switzerland. These firms are subject to stringent capital requirements, risk management protocols, and transparency rules. FINMA enforces the segregation of client funds and requires firms to comply with robust anti-money laundering regulations. By maintaining a high level of supervision, FINMA plays a crucial role in promoting market fairness and safeguarding the interests of investors.
Why Do We Trust FINMA Regulation?
FINMA is trusted due to its stringent regulatory framework, ensuring safety, transparency, and accountability for financial institutions, including forex brokers. Here’s why:
1. Safety of Client Funds:
FINMA requires forex brokers to fully segregate client funds from their own operational funds. This ensures that client deposits, including forex trading balances, are protected and kept separate from the broker’s assets, offering a guarantee of safety. In the event of insolvency, clients’ funds are shielded from potential loss.
2. High Capital Requirements:
FINMA sets a strict capital requirement for forex brokers applying for a license. Brokers must have a minimum fully paid-up capital of CHF 10 million, which ensures that only financially stable and well-funded firms can operate. This requirement reduces the risk of brokers defaulting due to insufficient resources.
3. Comprehensive Reporting Standards:
FINMA-regulated brokers are required to submit regular reports, including detailed audit reports and anti-money laundering (AML) reports. This transparency allows FINMA to maintain oversight and ensure that brokers are adhering to the law, preventing misconduct, and protecting client interests.
By enforcing these strict regulations, FINMA fosters trust and promotes a fair, transparent, and stable financial market in Switzerland.
How Can I Verify If My Broker is FINMA Regulated?
Here’s a detailed explanation of how to verify if your broker is regulated by FINMA, with expanded paragraphs under each subheading:
1. Find the Broker’s Name:
The first step in verifying your broker’s regulatory status is identifying their legal name. This information is typically available on the broker’s official website under sections like “About Us” or “Legal Information.” Make sure you’re using the broker’s full legal name, not just the brand name, as companies often operate under multiple names or subsidiaries. Having the exact name ensures an accurate search when you look up their registration with FINMA.
2. Visit the FINMA Website:
Once you have the broker’s legal name, visit the official website of FINMA. The Swiss Financial Market Supervisory Authority maintains a public register where you can find all authorized institutions and individuals. This register is a reliable source for confirming the legitimacy of brokers and other financial institutions operating under FINMA’s supervision. You can access it through this link: FINMA Licensed Institutions and Persons Page.
3. Enter the Broker’s Name:
On the FINMA website, you will find a search bar designed for checking the authorization status of financial firms. Enter the broker’s full legal name in this search bar. Make sure you input the name exactly as it appears on the broker’s official website. A precise search is crucial to ensure you are checking the correct entity, as some brokers may have similar or overlapping names.
4. Select the Category:
To refine your search and get the most relevant results, choose the appropriate category from the drop-down menu. For forex brokers, you should select “Banks and Securities Firms” as the category. This narrows down the search to firms that are authorized to offer forex and other securities trading services under FINMA’s regulation. Selecting the right category helps avoid confusion with other types of financial service providers.
5. Check the Broker’s Information:
Once the results are displayed, examine the broker’s profile on the FINMA website. Compare the information provided by FINMA with what’s available on the broker’s website. Look for details like the broker’s full name, address, and license status. It’s important to confirm that the broker is authorized as a bank or securities firm by FINMA, as this is a key requirement for offering forex trading services in Switzerland. If the broker is not listed or does not hold the necessary license, you should be cautious, as they may not be legally allowed to provide forex services. In such cases, it’s advisable to avoid dealing with that broker
FINMA-Regulated Forex Brokers: Who Else Is on the List?
IG is one of the well-known FINMA-regulated forex brokers. However, other FINMA-regulated forex and CFD brokers can serve as alternatives to IG. These alternatives include:
Affiliate Table: 5 FINMA-Regulated Forex Brokers
These brokers operate under FINMA regulation. According to FINMA rules, they offer leverage up to 20:1 and provide investor protection and negative balance protection for retail traders. To learn more about FINMA-regulated forex brokers, you can read our content on the best FINMA-regulated forex brokers.
What Other Regulations Does IG Have?
FCA:
IG is regulated by the Financial Conduct Authority (FCA) in the UK under license number 684312. The FCA, established in 2013, is responsible for regulating financial markets and firms in the United Kingdom.
The FCA requires IG to adhere to strict guidelines for financial conduct, including maintaining adequate capital, safeguarding client funds, and ensuring transparency in its operations. This includes keeping client money separate from company funds and providing regular financial reports. FCA regulation helps ensure that IG operates securely and fairly, offering a high level of protection and trust for clients in the UK and across Europe.
ASIC (Australian Securities and Investments Commission):
IG is regulated by ASIC. Founded in July 1998, the Australian Securities & Investments Commission (ASIC) is Australia’s national corporate regulator, overseeing corporations, markets, and financial services in accordance with the Australian Securities and Investments Commission Act 2001. Being based in Australia, ASIC regulation ensures that the broker complies with Australian laws on financial services, including responsible conduct, risk management, and financial reporting. Client money is kept in segregated accounts, and there is an emphasis on risk disclosure and trader protection.
FSA in Japan:
IG is regulated by the FSA in Japan. Established in 1997 the FSA Japan regulates and oversees the financial services industry including forex, overseeing banking, securities and exchange, and insurance sectors, and more. The FSA in Japan allows a maximum leverage of 1:400 for retail forex traders and investors. The FSA ensures that IG adheres to guidelines for maintaining adequate capital, protecting client assets, and ensuring transparent operations for clients in Japan and other regions.
MAS
IG is regulated by the Monetary Authority of Singapore (MAS). MAS, founded in 1970, is the government body responsible for overseeing financial institutions in Singapore, ensuring financial stability and investor protection.
Under MAS regulation, IG must follow strict rules, including maintaining enough capital, keeping client funds separate from company assets, and providing regular financial reports. MAS supervises forex trading and limits the maximum leverage to 1:20 to manage risk. Although there is no specific protection scheme, MAS’s oversight ensures that IG operates safely and transparently. For more details, you can visit their website: http://www.mas.gov.sg.
FMA
IG is regulated by the Financial Markets Authority (FMA) of New Zealand. The FMA, established in 2011, is responsible for overseeing financial markets and ensuring fair, transparent, and efficient operations in New Zealand.
The FMA requires IG to follow strict guidelines, including maintaining sufficient capital, protecting client funds by keeping them separate from company assets and providing regular financial reporting. This regulation ensures that IG operates securely and fairly, offering a reliable and transparent trading environment for clients in New Zealand.
FSCA
IG is regulated by the Financial Services Board (FSB) of South Africa. The FSB, established in 1990, was the financial regulatory authority in South Africa responsible for overseeing non-banking financial institutions before being replaced by the Financial Sector Conduct Authority (FSCA) in 2018.
Under FSB regulations, IG was required to maintain strict standards, including holding adequate capital, protecting client funds by segregating them from company assets, and ensuring transparency through regular financial reporting. This regulation helped ensure that IG operated securely and reliably, offering a safe trading environment for clients in South Africa.
Frequently Asked Questions
What is IG?
Founded in 1974 as IG Index by British Financier Stuart Wheeler, IG is a well-known forex and CFD broker. It offers over 100 forex currency pairs, CFDs, commodities, stocks, indexes, gold, silver, oil, bitcoin, and other cryptocurrencies for your personal investment and trading options.
Is IG Considered Safe Under FINMA Regulation?
Yes, IG is considered safe under FINMA regulations. Besides FINMA the broker is also regulated by several regulatory authorities including ASIC, FCA, JFSA, SFC (Hongkong), FSCA, MAS, FMA, GmbH, FINMA. These regulations ensure strict compliance with industry standards and provide protection for client funds.
What is the Maximum leverage of IG Under FINMA Regulation?
The maximum leverage offered by IG under FINMA regulation is 30:1 for retail traders. However, leverage may vary based on the tradable assets.
Here are the IG leverage limits under FINMA regulation:
- 30:1 for major currency pairs (e.g., GBP/USD, EUR/USD,)
- 20:1 for non-major currency pairs, gold, and major indices (e.g, S&P 500, Nasdaq 100 (US)
- 10:1 for commodities other than gold and non-major equity indices
- 5:1 for individual equities and other reference values
What is the minimum Deposit of IG under FINMA regulations?
The minimum deposit for a card payment is $50, and there is no minimum deposit for a bank transfer
Does IG Offer Negative Balance Protection under FINMA regulation?
Yes, IG offers Negative Balance Protection under FINMA regulation. This means that traders cannot lose more money than they have deposited in their trading accounts. If a trade results in losses that exceed the account balance, this protection ensures that the account balance does not go below zero, so the trader does not owe the broker any extra funds. This safeguard is important for retail investor safety and is in line with FINMA ’s regulations to protect traders in Switzerland
Does IG Offer an Investor Protection Scheme under FINMA regulation?
No, IG does not have an investor protection scheme under the regulation of the Swiss Financial Market Supervisory Authority (FINMA). This is primarily because FINMA itself does not provide an investor protection scheme.
While there is no dedicated scheme, FINMA requires brokers like IG to keep client funds in trust accounts with reputable banks or financial institutions, ensuring that client money is safeguarded. Additionally, brokers must submit Transaction Reports, Audit Reports, and Anti-Money Laundering (AML) Reports to maintain transparency and accountability
