Finspreads Customer Agreement has punters over a barrel!

[Bluewave]

I've just been reading the latest Finspreads Customer Agreement and came across the following paragraphs which might make new punters think twice before departing with their hard-earned:

3. The Spread
...3.3 We quote many thousands of prices each month and from time to time, whether due to human error or technical malfunction, incorrect prices are mistakenly quoted to customers. if we quote an incorrect price to you and you place a bet with us on the basis of that quote, the following provisions will apply:-

• a quoted price will be incorrect if it is different from the price that we would normally have quoted at the time when you request it, having regard to the nature and size of the bet, to our pricing policy in operation at the time and to the state of any underlying market
• if at the time that you place your bet with us on the basis of the incorrect price you know or suspect that the price is incorrect, we will be entitled to declare void any bet based on the incorrect price.

5. Trading
...5.4 ...You authorise us to process all (personal data within Data Protection Act 1998) for the purposes of performing the Contract and in furtherance of our legitimate interests including statistical analysis, marketing of our services and credit control. In relation to credit control, you authorise us to carry out such credit and/or identity checks as we deem appropriate including obtaining references from your employer and bank.

5.5 You authorise us to furnish information regarding your account and trading history to any person we reasonably determine to be seeking a credit reference in good faith. This includes, but is not limited to, other spread betting firms.

6. Internet and Telephone Trading
...6.8 All bets may be opened or closed during normal Internet trading hours. ...During Internet trading hours we may suspend your ability to trade in the circumstances set out in paragraph 11. (shown below)

11. Force Majeure Events
11.1 ...A Force Majeure Event shall include, but is not limited to, the following:-

• ...the suspension, closure or abandonment of any underlying market or event, with the result that we are in our reasonable opinion unable to maintain an orderly market in one or more of our betting markets
• ...the occurrence of excessive movement or loss of liquidity in the underlying markets upon which our betting markets are based, such that in our reasonable opinion we are unable to maintain an orderly market in any one or more of our betting markets
• ...the occurrence of any technical or mechanical failure, or power failure, or any failure the result of which is that our computing equipment does not function fully, or any other failure whatsoever, so long as the result of the failure in question is that we in our reasonable opinion in all the circumstances prevailing at the time believe that it would be commercially imprudent for us to allow normal trading to continue.

11.2 If we determine that a Force Majeure Event has occurred, we may, without prejudice to any other rights, take any one or more of the following steps:
...(c) close any or all open bets, cancel any instructions in particular any or all limit or stop loss orders in place on your account.

7. Opening & Closing Bets
...7.4 You acknowledge and agree that we may at our absolute discretion hedge your bet in the underlying market. If your bet or bets causes us to enter into hedging transaction/s that result in our holding position that is above normal market size for the stock or index in question ("large transactions"), it is possible that to reverse those transactions may take significant time. In the case of some transactions this could take hours, days or even weeks, during which the price could be moving against you. You therefore further acknowledge and agree in relation to large transactions that:

(a) the price at which your bet will be closed shall be the price that we actually quote to you in respect of the closure of that bet or the relevant part of it, and no other price, particularly not the price appearing on our website which will be indicative only of the sort of quotes that might be offered in relation to bets at or below market size; and

(b) we will not be under any obligations to quote a price to you in respect of the closing of a bet until we know the price at which we can reverse the hedge or the part of it to which the quote applies.
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Paragraph 7 must be particular galling to those that have been trading successfully and want to use larger bet sizes!

Now, I wonder how I can start my own spread-betting company? :idea:

 

[dc2000]

It does make one wonder what they would call above normal, but I think all SBs do it to a certain extent, they say they want you to win but unless they hedge each and every bet there must surely be a conflict of interest.

 

[PeterTT]

I personally don't see a problem with these terms .. They are basically saying that if they cannot hedge your bet in the underlying futures, then they will not quote for it. You would have exactly the same "problem" if you were trading the underlying futures .. ie .. no liquidity = no price !

Peter

 

[TheBramble]

but unless they hedge each and every bet there must surely be a conflict of interest.

It would be very interesting to know from the SBs just what percentage of their clients' bets they hedge and which they just take an opposite position on themselves.

Not that this is an issue either way, it's up to them entirely - just interested.

 

[neil]

Hedging

It would be very interesting to know from the SBs just what percentage of their clients' bets they hedge and which they just take an opposite position on themselves.

Not that this is an issue either way, it's up to them entirely - just interested.

Search archives - this subject has been aired several times.

 

[elliottmillion]

i really don't see your problem with those terms. Obviously if a force majeure occurs they want to protect themselves, otherwise they might end up "bankrupt"