It is my impression they do, I have often referred to the MiFID when in dispute with a company. But, you have to do your homework in order to make an impact regarding your case. You will almost always be rejected the first time, but you should not settle with this, if you feel strongly you have been a victim of unjustified treatment by the SB.
stevespray
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These same questions and occurrences seem to just go around and around again and again!
The client has asked a valid question; is the firm allowed to simply cancel trades and make a cash adjustment on his account?
Given the statements of fact in Post #1 I would say ‘No’. Firstly it is stated as an ‘out of hours trade’ – the firms market is purely synthetic and the prices are generated by them. Secondly (and most importantly) the firm have entered into the trade(s) in question. In law they must consider the validity of the price PRIOR to accepting the trade. As a result the client is within his rights to ask that the correction be removed from his account as he has not yet agreed to any such correction. Unless the client agrees otherwise the firm are bound by contracts which it has entered into. To simply alter a clients account using their back office could be considered bullying. The fact that they can make such amendments does not make it their right.
The pivotal point in this discussion is the moment of acceptance. As I already mentioned, these questions keep arising. It’s no different to a shop noticing a pricing error. If the customer has already paid for the item then there is nothing the shop can do about it as the item is now legally the property of the client. The same is true of funds kept in a spreadbetting account – these funds are the property of the client and not the firm.
The Financial Services and Markets Act make it clear that spreadbets are enforceable from the moment of entry. On that basis it would seem that the firm cannot simply reverse a trade even if that trade is entered in error. T&Cs which entitle the firm to be able to do so are not enforceable since those terms or conditions would conflict with the act – in such a situation the act would prevail (this is stated in the T&Cs).
In this situation the client should inform the firm that he/she is not accepting or agreeing to any adjustment or cancellation of the already agreed spreadbets. If the firm persists in claiming that the bets can be cancelled then they must pursue the matter through legal channels. In the meantime the money belongs to the client and they are entitled to remove the funds if they so wish as they have full legal title to the funds by virtue of the contract notes.
Just my two pennies worth.
Steve.
The client has asked a valid question; is the firm allowed to simply cancel trades and make a cash adjustment on his account?
Given the statements of fact in Post #1 I would say ‘No’. Firstly it is stated as an ‘out of hours trade’ – the firms market is purely synthetic and the prices are generated by them. Secondly (and most importantly) the firm have entered into the trade(s) in question. In law they must consider the validity of the price PRIOR to accepting the trade. As a result the client is within his rights to ask that the correction be removed from his account as he has not yet agreed to any such correction. Unless the client agrees otherwise the firm are bound by contracts which it has entered into. To simply alter a clients account using their back office could be considered bullying. The fact that they can make such amendments does not make it their right.
The pivotal point in this discussion is the moment of acceptance. As I already mentioned, these questions keep arising. It’s no different to a shop noticing a pricing error. If the customer has already paid for the item then there is nothing the shop can do about it as the item is now legally the property of the client. The same is true of funds kept in a spreadbetting account – these funds are the property of the client and not the firm.
The Financial Services and Markets Act make it clear that spreadbets are enforceable from the moment of entry. On that basis it would seem that the firm cannot simply reverse a trade even if that trade is entered in error. T&Cs which entitle the firm to be able to do so are not enforceable since those terms or conditions would conflict with the act – in such a situation the act would prevail (this is stated in the T&Cs).
In this situation the client should inform the firm that he/she is not accepting or agreeing to any adjustment or cancellation of the already agreed spreadbets. If the firm persists in claiming that the bets can be cancelled then they must pursue the matter through legal channels. In the meantime the money belongs to the client and they are entitled to remove the funds if they so wish as they have full legal title to the funds by virtue of the contract notes.
Just my two pennies worth.
Steve.
Nice to see you again Steve. You haven't been around much lately, at least not on the SB threads. I guess you couldn't stay out of this interesting discussion.
The problem with your conclusion is that the product offered by the SB is derived from the underlaying asset or a combination of the indexes, and such not "purely synthetic". So the price quote must be in correlation of these indexes. If the SB price quote is erroneous I cannot see that the SB is by contract bound by the price given, if they can prove an obvious error have occurred resulting in an incorrect price. This is also regulated in the MiFID and aims to protect the client interest. We all like the SB to behave like the real market. Was it OK for the Nasdaq to revert some stock trades that went down from $40 to a couple of cents on the same evening?
Jack Hughes
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I think that's different, gle. Were any futures trades made when the market spiked down cancelled?
stevespray
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A couple of critical points to consider...
Firstly I cannot comment on the Nasdaq’s actions over reversing trades but I would point out that market regulators, both here in the UK and over in the US, make clear distinctions between ‘exchange based trades’ and ‘off exchange based trades’. In the UK spreadbetting and CFD trading is clearly defined as being ‘off exchange’. This actually makes things clearer for clients and gives the firms less room for manoeuvre. This is why contracts that they enter into are legally binding.
Secondly, I think you will find that MiFID are a set of ‘directives’ rather than laws or regulations. You imply in you last post that MiFID is a set of ‘regulations’ – I don’t think this is correct.
In a subsequent post it is stated that even someone from the firm specified that ‘the markets were crazy’ or words to that effect. This admission is critical in my opinion as it opens up an avenue for the aggrieved client to suggest that the firm are simply re-pricing their market retrospectively. The firm seem to be claiming that their pricing algorithm didn’t handle the sharp market movement very well. Either that or the programmers simply never expected such sharp movements in price. Either way it is clearly the firm’s liability. The firm appear to be using an interpretation of their T&Cs to mitigate that liability. I revert to my earlier post – in law both parties must consider price prior to acceptance of the deal. If the firm didn’t like the price then they should not have accepted the clients offer to trade at that price.
Steve.
Firstly I cannot comment on the Nasdaq’s actions over reversing trades but I would point out that market regulators, both here in the UK and over in the US, make clear distinctions between ‘exchange based trades’ and ‘off exchange based trades’. In the UK spreadbetting and CFD trading is clearly defined as being ‘off exchange’. This actually makes things clearer for clients and gives the firms less room for manoeuvre. This is why contracts that they enter into are legally binding.
Secondly, I think you will find that MiFID are a set of ‘directives’ rather than laws or regulations. You imply in you last post that MiFID is a set of ‘regulations’ – I don’t think this is correct.
In a subsequent post it is stated that even someone from the firm specified that ‘the markets were crazy’ or words to that effect. This admission is critical in my opinion as it opens up an avenue for the aggrieved client to suggest that the firm are simply re-pricing their market retrospectively. The firm seem to be claiming that their pricing algorithm didn’t handle the sharp market movement very well. Either that or the programmers simply never expected such sharp movements in price. Either way it is clearly the firm’s liability. The firm appear to be using an interpretation of their T&Cs to mitigate that liability. I revert to my earlier post – in law both parties must consider price prior to acceptance of the deal. If the firm didn’t like the price then they should not have accepted the clients offer to trade at that price.
Steve.
Jack, it is quite obvious the prices on these stock were erroneous, so what is the difference? The future contracts were not canceled as I understand it, and shouldn't been, if it was proven that the whole system didn't broke down. You want the SB price quote to reflect the movement of the underlaying asset, for some reason or the other the SB algorithm broke down, and such not reflecting the movement of the underlaying asset. So in short the result of this brake down gave an erroneous price quote. However, a trader on this thread posted, that this faulty pricing worked to his disadvantage, resulting in a huge spread of 800 points. If this is proven right the trade might be reverted in his favor.
As I understand all the SB companies in the UK all have agreed to follow the EU MiFID financial directives. You are right their are not "regulations" as such, as EU in the first place cannot impose on countries own legal system, they have to go through directives that will be adopted by EU country members through changes in their own legal system. FSA have in their own information written several reports on how to adapt to the EU financial directives, as this has an overall impact on how financial companies should interact and adapt to working within the EU community.
The MiFID clearly states how markets like SB should operate, and the rules are quite set to pricing, transparency and client's issues. SB and CFD's are defined as "exchanges" in their own right, and obliged to follow the rules set up by the directives.
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stevespray
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I'm pretty sure the various firms are not classed as exchanges. I quick read of the T&Cs make this pretty clear....
"Clients are speculating against the levels of the firm's own index and not that of any underlying market"
The firms are not 'exchanges', instead they are firm's who buy and sell their own derivative products. These are classified as 'Over The Counter' products.
In my opinion, regardless of MiFID directives, normal law would prevail if the matter were esculated. The question would be, has the firm entered into a legally binding contract with the client with regard to the individual bets? In my opinion nothing else would matter since any lawyer trying to prove otherwise would be up against hundreds of years of well documented contract law.
Steve.
"Clients are speculating against the levels of the firm's own index and not that of any underlying market"
The firms are not 'exchanges', instead they are firm's who buy and sell their own derivative products. These are classified as 'Over The Counter' products.
In my opinion, regardless of MiFID directives, normal law would prevail if the matter were esculated. The question would be, has the firm entered into a legally binding contract with the client with regard to the individual bets? In my opinion nothing else would matter since any lawyer trying to prove otherwise would be up against hundreds of years of well documented contract law.
Steve.
Steve, I will look up if I can find the information about how MiFID define SB or market makers. I read it about a year ago and from what i remembered these kind of markets are defined as "exchanges". If the companies have agreed to follow the MiFID you can not by a T&C contract sign away rules set up by the MiFID, this is clearly stipulated in the MiFID directives.
Jack Hughes
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Forget MiFID, I'd say that IG is fully aware that they will likely lose if the matter is referred to the FOS. I'd be interested to know why it took them more than a few seconds to realise that the platform was making 'manifest errors', and act accordingly.
trader_dante
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Hi guys, I happened to short ftse100 out of market hours - using IGindex SB account just when it fell to around 4420. I gained about 500 quid on that trade in about 5 seconds. Here's the catch, IGindex took money earned on that trade from my account in form of a 'cash correction' this morning.
When I called them and asked for the explanation, they said that market went crazy yday, prices weren't real and its only fair if they cancelled all the transactions
They also mentioned that they refunded guys who incurred a loss as well on that trade. So 1) what do you think about this practice? (considering the very nature of the SB business and quote system they provide)
2) have any of you guys who traded at the time got similar experience?
It has happened to me loads. You will almost always end up having the money taken off you if the cause of the error is a fast market that later becomes key news. What you want to look for is the data error spikes. Use small size to go under the radar. Most of the time you will get away with it. I once bought coffee at zero.
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Yes I think you are right, you can't blame a guy for taking a chance though, but one must be fully aware that the trade might as well end up being reverted.
Jack Hughes
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That's a bit like bookies claiming their money back because they later realise they got the odds wrong.
In this case the thread starter wasn't trying to get an unfair advantage, he was just trading at the price quoted, which IG bases on various other factors. Usually, this will ensure that the punter is more likely to lose, but on this occasion they were hoist by their own algorithm!
Yes, but the price quote did not at all reflect the underlaying asset, so that leaves it to be an erroneous price quote. I mean, one cannot eat the cake and have it too. I hope you agree, to the fact that the price quote for an index product should reflect the movement of the real market.
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From a MiFID Questionnaire sent out by the FSA is the following statement.
"There are two types of spread betting business: sports and financial. MiFID will affect financial spread betting but not sports spread betting."
stevespray
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From section 5 of IG Index's own T&Cs....
"The figures we quote will be in respect of the level of our Index and not the level of an Underlying Market, and you acknowledge that the level of our Index may be different from the level of an Underlying Market."
In law it is generally regarded that when one party warns the second party of a condition or obligation that the first party is considered to also be aware of the same factor. In this case the firm warns the client that the firm is entitled to quote prices which are away from the underlying market. This seems to clash with aspects of MiFID which have been commented on? Regardless of MiFID the firm would appear to be specifying that they can quote prices which suit them given particular situations. One assumes this is for financial gain on their part. The type of warning issued implies the potential for detriment on the client’s part. Therefore, at a later date, is it reasonable for the firm to claim that its quotation was "incorrect"? How is the client supposed to tell the difference between an 'incorrect price' and a price which the firm is purposefully quoting 'different from the underlying market'?
In my opinion, the firm, through its T&Cs, warns the clients of two very distinct facts;
1 That the clients are betting against the level of the firm’s own derivative product (index).
And
2 That the firm has the right to quote prices which don’t necessarily reflect the price of the underlying price on which the firm’s derivative product or index is based.
Therefore, given that the firm has specifically warned the client on these points, the client is also entitled to specify the following;
1 The firm acknowledges that clients bet on the price of the firm’s own derivative product or index.
And
2 (Most importantly) The firm acknowledges that clients are allowed to place trades based on quotations even when that quotation doesn’t reflect the price of the underlying market.
The warnings issued by the T&Cs are not simply a ‘one way street’ which allows the firm to run over the clients. There is, in law, a balance to each term which means that the client has equal but opposing rights. In this case, when the firm warns the clients that it has the right to quote prices which are different to the underlying market, the firm has an opposing liability; that it cannot reasonably determine prices quoted away from the underlying market to be ‘wrong’. It’s a case of swings and round-a-bouts; the firm inserts that clause because it has calculated that it is financially beneficial to include such a term (the firm wants to retain the ability to quote in such a manner) – the downside is that there may be times when it not beneficial to allow clients to trade under such conditions. The case being discussed appears to be one of those events. At the time of the disputed trade the firm (either the dealers or the firm’s electronic algorithm) decided to quote a price which was ‘different from the level of an underlying market’. The firm then accepted legally binding deals based upon the quoted prices. The firm then decided retrospectively that it did not wish to be bound by such deals.
It appears to me, at face value, that firm is trying to gain the best of both worlds; it is happy to use its ability to quote prices which differ from the underlying when it suits them yet if, in hindsight, the firm discovers a situation which is non beneficial it decided to try and reverse the trades? That does seem rather unfair.
Of course none of my demented rambling affects the points that I have previously made; that the pivotal point in this matter is the moment that a bet is accepted by the firm. Clearly in this case the firm appears to act in a manner which indicated that it has the right to reconsider the clients offer (to enter and/or exit a bet) AFTER acceptance has taken place (given that a contract note has already been issued). This would never wash if the matter was escalated. Likewise I would suggest that the firm cannot simply enter a trade (or ‘adjustment’) onto a clients account to reverse such a trade without the direct consent of the client. As I said before, the firm’s ability to insert such an adjustment via its back office system doesn’t automatically give them the legal right to do that. Any such adjustment has to be done through the relevant protocol. In this case I would suggest that all the firm can do is contact the client and explain what has occurred (ie that the firm feels that the prices became inaccurate). The firm can ask the client if he or she is willing to agree to the cancellation of the bet by means of an adjustment. However, in just the same way that the firm has the right to accept or reject a proposed trade, the client has the right to consider the firms offer. By simply entering the adjustment onto the clients account the firm would be implying that the client has already agreed to such an agreement and this appears incorrect.
Again I would stress that the correct course of action would be for the client to contact the firm and specify that he or she is not accepting or agreeing to the adjustment. At that point the firm would surely be duty bound to remove it?
Steve.
"The figures we quote will be in respect of the level of our Index and not the level of an Underlying Market, and you acknowledge that the level of our Index may be different from the level of an Underlying Market."
In law it is generally regarded that when one party warns the second party of a condition or obligation that the first party is considered to also be aware of the same factor. In this case the firm warns the client that the firm is entitled to quote prices which are away from the underlying market. This seems to clash with aspects of MiFID which have been commented on? Regardless of MiFID the firm would appear to be specifying that they can quote prices which suit them given particular situations. One assumes this is for financial gain on their part. The type of warning issued implies the potential for detriment on the client’s part. Therefore, at a later date, is it reasonable for the firm to claim that its quotation was "incorrect"? How is the client supposed to tell the difference between an 'incorrect price' and a price which the firm is purposefully quoting 'different from the underlying market'?
In my opinion, the firm, through its T&Cs, warns the clients of two very distinct facts;
1 That the clients are betting against the level of the firm’s own derivative product (index).
And
2 That the firm has the right to quote prices which don’t necessarily reflect the price of the underlying price on which the firm’s derivative product or index is based.
Therefore, given that the firm has specifically warned the client on these points, the client is also entitled to specify the following;
1 The firm acknowledges that clients bet on the price of the firm’s own derivative product or index.
And
2 (Most importantly) The firm acknowledges that clients are allowed to place trades based on quotations even when that quotation doesn’t reflect the price of the underlying market.
The warnings issued by the T&Cs are not simply a ‘one way street’ which allows the firm to run over the clients. There is, in law, a balance to each term which means that the client has equal but opposing rights. In this case, when the firm warns the clients that it has the right to quote prices which are different to the underlying market, the firm has an opposing liability; that it cannot reasonably determine prices quoted away from the underlying market to be ‘wrong’. It’s a case of swings and round-a-bouts; the firm inserts that clause because it has calculated that it is financially beneficial to include such a term (the firm wants to retain the ability to quote in such a manner) – the downside is that there may be times when it not beneficial to allow clients to trade under such conditions. The case being discussed appears to be one of those events. At the time of the disputed trade the firm (either the dealers or the firm’s electronic algorithm) decided to quote a price which was ‘different from the level of an underlying market’. The firm then accepted legally binding deals based upon the quoted prices. The firm then decided retrospectively that it did not wish to be bound by such deals.
It appears to me, at face value, that firm is trying to gain the best of both worlds; it is happy to use its ability to quote prices which differ from the underlying when it suits them yet if, in hindsight, the firm discovers a situation which is non beneficial it decided to try and reverse the trades? That does seem rather unfair.
Of course none of my demented rambling affects the points that I have previously made; that the pivotal point in this matter is the moment that a bet is accepted by the firm. Clearly in this case the firm appears to act in a manner which indicated that it has the right to reconsider the clients offer (to enter and/or exit a bet) AFTER acceptance has taken place (given that a contract note has already been issued). This would never wash if the matter was escalated. Likewise I would suggest that the firm cannot simply enter a trade (or ‘adjustment’) onto a clients account to reverse such a trade without the direct consent of the client. As I said before, the firm’s ability to insert such an adjustment via its back office system doesn’t automatically give them the legal right to do that. Any such adjustment has to be done through the relevant protocol. In this case I would suggest that all the firm can do is contact the client and explain what has occurred (ie that the firm feels that the prices became inaccurate). The firm can ask the client if he or she is willing to agree to the cancellation of the bet by means of an adjustment. However, in just the same way that the firm has the right to accept or reject a proposed trade, the client has the right to consider the firms offer. By simply entering the adjustment onto the clients account the firm would be implying that the client has already agreed to such an agreement and this appears incorrect.
Again I would stress that the correct course of action would be for the client to contact the firm and specify that he or she is not accepting or agreeing to the adjustment. At that point the firm would surely be duty bound to remove it?
Steve.
What do they mean by the "level of the market", the same figures as the real market we all know they are in most cases not quoting. The price quoted must be based on something, otherwise it would not be called financial spread betting. Of course they try to get covered in every market and trading scenario.
As I have said many times before, you CANNOT OVERRIDE the MiFID by signing a user agreement for a T&C, for one reason or the other this fact doesn't seem to get cross. The UK SB firms are under the MiFID financial directives and must oblige to its regulations. The Swedish FI (same as FSA) is even referring MiFID to be a law, taking affect 1 of November 2007, under which the financial community have to oblige.
stevespray
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I do understand the points which you are making but MiFID is only a set of 'directives' and as such these are open to interpretation. I could be wrong but in the UK these are not looked upon as laws as such and therefore it is not possible for a client to show a contractual obligation on the part of a firm to follow MiFID. The T&Cs of many firms appear to touch on this issue. Instead of specifically stating that ‘we will fully apply MiFID’ they state things like ‘we will try to ensure that our execution policy is followed were ever possible’ (“Execution Policy” is normally centred on MiFID). If you read the T&Cs you will see that Execution Polices are never stated as being binding and neither do they actually form part of the Customer Agreement. Instead, in the UK, these Customer Agreements fall under the jurisdiction of the Financial Services and Markets Act. Unless I’m mistaken the Act hasn’t yet been changed to fully embrace MiFID. Even if it was changed there would be no guarantee that Spreadbetting and CFDs would be totally covered since the client is dealing purely with one firm and therefore that firm only quotes its own individual derivative products – there is no ‘best execution’ as such because there is only one quote to choose from.
In the UK it is generally considered that firms T&Cs (or the subsequent interpretations of) cannot reverse or circumvent terms or protections which the Financial Services and Markets Act set out. In this case the Act makes it clear that Financial Spreadbets are legally enforceable contracts which are legally recognised from the moment they are formed. This is what represents a problem for firms. An old fashioned sports bet was nothing more than a gentleman’s agreement. It was not enforceable in anyway. The only thing which virtually guaranteed a payout, even if you got what seemed like erroneous odds, was the fact that the bookmaker had to maintain a reputation of never welching. This is not the case with Financial Bets – these are legally enforceable by both parties from the moment which they are opened. Because of this it can clearly be shown that any term or condition in the Customer Agreement which appears to allow a firm to reverse or cancel a bet is a clear contravention of the Financial Services and Market Act (they’re attempting to circumvent the fact that spreadbets are enforceable from conception.) In such a situation the Act would prevail over the T&Cs and terms in the customer agreements which appear to allow firms to simply cancel bets (they’ve already entered into) would be wholly unenforceable. What the T&Cs fail to consider with their ability to cancel bets is that the bets are, in law, a recognised asset and therefore the parties have specific rights regarding who the asset actually belongs to. As I keep saying, the pivotal point is the point when the ‘asset’ (ie the legally recognised bet) passes from the first party (the firm) to the second party (the client). The firms would have a very hard job persuading anyone that the pivotal point was anything other than the point where the firms officially generated contract note or trade confirmation was issued. It’s catch twenty two for the firms. Any arguments by firms which implied that point of contract was anything else would allow other clients to claim that they could reject or renege on open (losing) bets given that an argument which tried to show that the issuing of a contract note was not ‘the pivotal point’ would give rise to a situation where the firm would have to explain where that pivotal point actually was.
This really would be an awkward situation for any firm as it has an obligation under FSA regulations to treat clients fairly. It could well be that a situation arises where a firm has to refund clients who have lost whilst at the same time paying clients who have won. You should understand that the firm has an obligation to treat the client fairly but there is no obligation on the client’s part to treat the firm in the same manner. As such a firm could be seen to be unfair if it enforced losing bets and clients could appeal as such. There is however no means for the firm to appeal against clients who insist on enforcing such a winning bet. In my opinion, if a matter like this came to court, any firm would lose. Why? Because the client would be able to produce the contract notes which entitled them to the disputed asset (ie the bet in question). Regardless of whether the firm have entered an adjustment on to a clients account they would be unable to show that this contract was formed legitimately (ie there is no offer made followed by acceptance from the client that the adjustment can be made).
Steve.
In the UK it is generally considered that firms T&Cs (or the subsequent interpretations of) cannot reverse or circumvent terms or protections which the Financial Services and Markets Act set out. In this case the Act makes it clear that Financial Spreadbets are legally enforceable contracts which are legally recognised from the moment they are formed. This is what represents a problem for firms. An old fashioned sports bet was nothing more than a gentleman’s agreement. It was not enforceable in anyway. The only thing which virtually guaranteed a payout, even if you got what seemed like erroneous odds, was the fact that the bookmaker had to maintain a reputation of never welching. This is not the case with Financial Bets – these are legally enforceable by both parties from the moment which they are opened. Because of this it can clearly be shown that any term or condition in the Customer Agreement which appears to allow a firm to reverse or cancel a bet is a clear contravention of the Financial Services and Market Act (they’re attempting to circumvent the fact that spreadbets are enforceable from conception.) In such a situation the Act would prevail over the T&Cs and terms in the customer agreements which appear to allow firms to simply cancel bets (they’ve already entered into) would be wholly unenforceable. What the T&Cs fail to consider with their ability to cancel bets is that the bets are, in law, a recognised asset and therefore the parties have specific rights regarding who the asset actually belongs to. As I keep saying, the pivotal point is the point when the ‘asset’ (ie the legally recognised bet) passes from the first party (the firm) to the second party (the client). The firms would have a very hard job persuading anyone that the pivotal point was anything other than the point where the firms officially generated contract note or trade confirmation was issued. It’s catch twenty two for the firms. Any arguments by firms which implied that point of contract was anything else would allow other clients to claim that they could reject or renege on open (losing) bets given that an argument which tried to show that the issuing of a contract note was not ‘the pivotal point’ would give rise to a situation where the firm would have to explain where that pivotal point actually was.
This really would be an awkward situation for any firm as it has an obligation under FSA regulations to treat clients fairly. It could well be that a situation arises where a firm has to refund clients who have lost whilst at the same time paying clients who have won. You should understand that the firm has an obligation to treat the client fairly but there is no obligation on the client’s part to treat the firm in the same manner. As such a firm could be seen to be unfair if it enforced losing bets and clients could appeal as such. There is however no means for the firm to appeal against clients who insist on enforcing such a winning bet. In my opinion, if a matter like this came to court, any firm would lose. Why? Because the client would be able to produce the contract notes which entitled them to the disputed asset (ie the bet in question). Regardless of whether the firm have entered an adjustment on to a clients account they would be unable to show that this contract was formed legitimately (ie there is no offer made followed by acceptance from the client that the adjustment can be made).
Steve.
This is all well Steve, if you are talking about sports spread betting, but we are not. The FSA and SB firms have adopted the MiFID. The later as a way of getting a passport in order to access the huge EU market. Yes, there are certain parts of the "Best execution" directive that the SB cannot execute, this on basis of the nature of the business. Still, you are dealing with financial spread betting and such you do have to follow the rules set up by the MiFID. This information is taken from the FSA site. The SB company cannot chose which set of rules they like to follow, and disregard the rest they don't like.
"MiFID – the Markets in Financial Instruments Directive – came into effect on 1 November 2007, replacing the Investment Services Directive (ISD). Amendments to UK legislation and rules to transpose to its provisions were made by the deadline of 31 January and came into effect on 1 November 2007. MiFID extends the coverage of the ISD and introduces new and more extensive requirements that firms will have to adapt to, in particular for their conduct of business and internal organisation."
I just read an article by by Trevor Barritt, "Is MiFID necessary in the UK, and is it helpful?"
He has previously been working for the FSA for 4 years.
"At one level, of course, the answer has to be yes. The UK is a member of the European Union. The EU Commission published the Markets in Financial Instruments Directive ('MiFID') as Directive 2004/39/EU on 21 April 2004 and, by European Law, its provisions must be incorporated into the laws of the UK and of every other EU member state by November 2007. However, this will be at least the fourth major overhaul of regulations in the UK Financial Services Industry in 20 years. I am not aware of any other industry whose regulations have been changed so fundamentally and radically so often."
He has previously been working for the FSA for 4 years.
"At one level, of course, the answer has to be yes. The UK is a member of the European Union. The EU Commission published the Markets in Financial Instruments Directive ('MiFID') as Directive 2004/39/EU on 21 April 2004 and, by European Law, its provisions must be incorporated into the laws of the UK and of every other EU member state by November 2007. However, this will be at least the fourth major overhaul of regulations in the UK Financial Services Industry in 20 years. I am not aware of any other industry whose regulations have been changed so fundamentally and radically so often."
