By Patrick Graham
LONDON (Reuters) - Dozens of clients of trading platform IG Index Ltd (L:IGG) have complained to Britain's Financial Conduct Authority about how the company handled the Swiss franc's surge on Jan. 15, the regulator and a clients' group said on Friday.
In responses to some of the letters, seen by Reuters, the FCA told clients who are fighting IG over losses sustained on that day that it was aware of issues around trading in the franc and was looking into it as part of its oversight of the sector.
Taking care not to mention IG, the FCA reply to one client said:
"We understand the issues that have occurred as a result of the Swiss National Bank's decision to remove the Swiss Franc's cap against the Euro and we are reviewing these as part of our ongoing supervisory work but as you understand, we are unable to share details about our findings any further at this stage."
IG declined to comment.
An FCA spokesman confirmed that it had received letters, including one from British member of parliament Nick Raynsford forwarding complaints from constituents.
One of the clients said that the FCA had twice phoned him in response to letters and asked him to provide more evidence. He has sent several letters with more material including data on trades to the FCA. The FCA said it was standard practise to ask individuals who contacted it for any more information they had.
All of the clients in question have filed, or are in the process of assembling, complaints to Britain's Financial Ombudsman. Many have retained legal counsel, representatives of the group told Reuters.
Under Britain's regulatory regime, the FCA does not deal with individual complaints but raises issues with firms privately if prompted, for example by a large number of complaints being made to the Financial Ombudsman or the FCA.
For some of those caught out when the Swiss central bank lifted its cap on the franc's value, losses run far in excess of the £150,000 maximum that the Ombudsman can award. The regulator is also obliged to deal with each case individually, which can take considerable time, while many of the clients say they are facing bankruptcy.
IG said in late January it faced a bill of up to 30 million pounds because of the franc's unprecedented surge - 12 million pounds in market exposure and 18 million pounds of client exposure.
It later said it was seeking payment "as promptly as possible" from a group of 327 clients who had debts worth more than 17 million pounds. Its stock price has fallen 2.75 percent since the open on Jan. 15, against a rise of almost 8 percent in the FTSE 250 (FTMC).