With the European Union and United Kingdom swiftly approaching the end of the Brexit transition period on December 31, 2020, and no immediate relief is provided in the so-called “Brexit Deal”, brokers licensed in the UK will lose passporting rights on January 1st and will not be able to service European traders vis-a-vis their UK operations.
IG Group, the major multinational brokerage announced to its European traders domiciled at IG’s UK entity several hours ago that it will not be able to continue to provide trading services following the end of 2020 due to the lack of passporting rights. The broker invited customers to transfer their accounts to “IG Europe to keep trading CFDs with IG. IG Europe is based in Germany and is authorized and regulated by BaFin and Bundesbank. It offers a range of financial products depending on your location, including CFDs, options, and turbos.”
The broker indicated that all open orders and positions after 31 December will be placed on closings only until the customer’s accounts are successfully transferred. The broker expects the transfer to happen in mid-January and there is no word on what approval process needs to take place to open accounts at IG’s german entity at this point.
Some may recall that several UK based brokers have registered new entities in European countries, including Pepperstone in Cyprus, in order to continue servicing EU traders with little to no interruptions. It remains to be seen if any relief will be provided by ESMA or other EU financial authorities in order to ensure smooth transitions for European traders.
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