Risk Disclosure Notice

This notice is provided to you in compliance with the rules of the UK Financial Services Authority (FSA). It describes the main risks and other significant aspects of foreign exchange contracts for differences ('Forex CFDs').

This notice does not disclose all of the risks and other significant aspects of Forex CFDs and you should not open an account with us to deal in Forex CFDs unless and until you understand the nature of the contract you are entering into and the nature of the risks involved. You should also be satisfied that the contract is suitable for you in the light of your circumstances and financial position.

Whilst Forex CFDs can be utilised for the management of investment risk, Forex CFDs are also high risk geared investment products and therefore are unsuitable for many members of the public. In deciding whether to trade in Forex CFDs you should be aware of the following points.

A Forex CFD is simply an agreement between you and us to exchange the difference in value of a particular currency pair between the time at which a Forex CFD is opened and the time at which it is closed.

In deciding whether to trade Forex CFDs, you should be aware of the following:

Trading in Forex CFDs is geared and carries a high degree of risk

The 'gearing' or 'leverage' involved in trading Forex CFDs means that a small initial margin payment can potentially lead to large losses as well as gains. The geared nature of Forex CFDs also means that Forex CFD trading can carry greater risks than non-geared Forex trading, which is generally not geared. A relatively small market 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.

Forex CFDs are off-exchange derivatives

While our Forex CFD 'market' is generally highly liquid, trading Forex CFDs with us involves greater risk than an on-exchange derivative as there is no exchange market on which to close out an open position – you are only able to open and close your positions with us. The performance of a transaction by us is not 'guaranteed' by any exchange or clearing house.

Trading CFDs involves you paying margin

You will be required to place a deposit with us ('margin') before you can open a Forex CFD position. If the market moves against you, you will be called upon to pay additional margin at short notice, the amount of which may be substantial. If you fail to pay such additional margin within the required time, your position may be liquidated at a loss and you will be liable for any resulting deficit. Sometimes the resulting deficit will equate to your entire margin deposits with us, and may even result in losses that exceed your margin deposits.

Markets may be volatile and it may be difficult or impossible to liquidate a position

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 trading in the underlying market is suspended or restricted.

Non-Guaranteed Stops do not necessarily cap your loss to the intended amount

Placing Non-Guaranteed Stop Order will not necessarily limit your losses to the intended amounts, because market conditions may make it impossible to execute such an Order if the underlying market moves straight through the stipulated price.

You must make you own decisions on trading Forex CFDs - we do not provide advice

We will not provide you with personal advice relating to Forex CFDs and we will not make Forex CFD recommendations of any kind. The only advice we will give you will be as to how Forex CFDs work.

Market abuse and insider trading rules apply to Forex CFDs

Although by dealing with us you are only notionally dealing in Forex, you need to be aware that you may still be subject to the rules of the FSA and, in particular, the market abuse and insider trading provisions of the Market Abuse Directive.

Our costs will affect your net result

Before you begin to trade, you should obtain details of our Spreads, Interest Adjustments and any other charges for which you will be liable. Where such charges are not expressed in money terms (but, for example, as a dealing spread), you should obtain a clear written explanation, including appropriate examples, to establish what such charges are likely to mean in specific money terms.

Derivative markets can be highly volatile

The prices of Forex CFDs and the underlying currencies may fluctuate rapidly and over wide ranges and in reflection of unforeseen events or changes in conditions, none of which can be controlled by you. The prices of Forex CFDs will be influenced by unpredictable events including, amongst other things, changing supply and demand relationships, governmental, agricultural, commercial and trade programmes and policies, national and international political and economic events and the prevailing psychological characteristics of the relevant marketplace.

One-click dealing

As a default, your IG Forex Account will have 'one-click dealing' enabled. One-click dealing lets you enter a deal size and then, following a single click from you on either Buy or Sell, our trading platform will send the request directly to us for acceptance; you will not be presented with an intermediate screen asking you to check the details of your request to Buy or Sell, nor will you have a chance to cancel your request once you have clicked to Buy or Sell. For these reasons, you should take extra care when one-click dealing is enabled. If you do not wish to have one-click dealing enabled you can change this preference by logging into your account or calling our customer services team.

IG Markets Limited
November 2007

Any Questions?

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