EU Referendum: London Trading Firms Prepare For Brexit

EU Referendum: London Trading Firms Prepare For Brexit

Owner: Cuningham

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Spreadbetting and CFD firms are preparing for battle. Oli Scarff/Getty Images City of London trading firms are trying to stop customers making risky trades in the run-up to June's European Union membership referendum in a bid to ensure firms don't go out of business if there are wild swings in the market following the result. Spreadbetting and contract for difference (CFD) providers - including the industry's biggest, IG Group - are planning to limit the amount of leverage offered to customers.

This means customers will have less borrowed money to bet on assets with, meaning the stakes should be lower. The increase in margin rates is meant to put a dampener on trading activity to limit potential huge losses for both customers and businesses in the event of big market swings. Last year UK FX broker and CFD provider Alpari went bust after the Swiss National Bank surprised markets by unpegging the Swiss franc from the Euro .

The Swiss franc dived almost 28% as a result , leaving many burned fingers. US broker FXCM found customers owed it $225 million (

Brief description: Spreadbetting and CFD firms are preparing for battle.

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