LONDON (Reuters) - Broker PhillipCapital UK said on Thursday it planned to raise margin requirements on sterling denominated trades by 10 percent ahead of an expected spike in market volatility in the run-up to a British vote on membership of the European Union.
PhillipCapital UK said it also planned to raise the margin on all other instruments by 5 percent.
"If the UK votes to leave the EU we could experience unparalleled volatility for a period of time and so we are taking this action in the run up to the referendum in order to protect our clients against any extreme market movements," Head of Derivatives Trading Sean Tan said in a statement, referring to lessons learned in the wake of the shock removal of the Swiss Franc-Euro peg in January 2015.
The increase in margin will take place in two stages starting from June 12, with the second increase occurring on June 19, four days before Britons go to the polls.