Is it legal for me to spreadbet?

[sak07]

Hi,

Im a city worker on a fixed income desk in London and interested in trading equity indicies only via spread betting. My employer has specific rules about declaring equity holdings in shares etc but mentions nothing about spread betting. They do not have an issue with employees gambling provided it is outside working hours and has no implications on your work. So bearing in mind I work in a front office envirnment would I be allowed to open and trade in a spread betting account? I have no access to any of my firms equity portfoilios or equity trading tools and only intend to trade in equity indicies and in relatively small size. What is the legislation reagrding this?? Thanks

 

[Trader333]

In my view you are asking the wrong people, you should be asking your employer.


Paul

 

[shadowninja]

Indeedy. Best ask your boss.

 

[whipsaw]

Most of the european financial service provider have defined specific guidelines concerning compliance and/ or codes of conduct.

These rules and regulation contains information regarding money laudering, daytrading, directors dealing, insider information and further business related issues.

Like the previous speakers has already suggessted best thing would be to ask your boss, hr, or legal dept.

 

[A Dashing Blade]

I'd be gob-smacked if you wern't breaching complience regs, these should be available on your internal intranet.

 

[ns1000]

Depends on the bank you work for. In my experience, they vary greatly. Some have a 'preferred' SB company they want you to use (generally one they trust to send them copies of the contracts), so will ban it, some more laissez faire. If you do open an account, make sure they send copies of your contract notes to your compliance - chances are they won't be a*sed to read them, but you'll at least cover yourself.

 

[foredog]

Most probably you will be able to trade but still obey the in house rules, eg if you buy a stock you must hold it for a minimum of a month etc

 

[sak07]

Thanks guys. Incidently - it seems that alot of the spread betting firms brag about how many city clients they have, how can this be given it seems many banks prohit employees spreadbetting? One thing i noticed when I opened my account was that I asked where i work - would have thought the spread betting firms would have had to turn me down? O well i haven't made a trade yet as im not sure i fancy being in clink/doll queue at the moment. Will wait and see what my compliance department says.

 

[Bagehot]

Thanks guys. Incidently - it seems that alot of the spread betting firms brag about how many city clients they have, how can this be given it seems many banks prohit employees spreadbetting? One thing i noticed when I opened my account was that I asked where i work - would have thought the spread betting firms would have had to turn me down? O well i haven't made a trade yet as im not sure i fancy being in clink/doll queue at the moment. Will wait and see what my compliance department says.

Different banks have different rules - where I am now there's no restriction on spreadbetting, but you're not allowed to go short on any stock, and any trade in a company with which the bank has a relationship has to be logged with compliance. At another place I was at, you could go short, but not use leverage or derivatives in any way (spreadbetting was classed as a derivative). Another place let you do anything but only if you held the position for at least two-weeks to prevent short-term speculation. So its horses-for-courses and you'd be well advised to become familiar with the rules at your shop: if for no other reason it gives them an easy out if they ever want to sack you or with-hold a bonus if you've been flouting compliance rules.

 

[tomorton]

Definitely tread carefully, by which I mean NEVER misuse work time for personal purposes, and always be able to show good faith.

However, a further thought on this issue. Colleagues and I have recently been issued with new contracts of employment plus a form asking us to declare certain specified interests that might prejudice fulfilment of our employed work. The form asks if we hold any shares or a Directorship in any company the employer regularly deals with. It does not seek information as to ANY forms or other specified forms of financial interest in the well-being of a partner company, and this might be a worthy point to note.

My employer's enquiries restrict themselves to rights of management control of a partner company, not benefit from the company's share price performance. I take it that they are unconcerned with spreadbetting, shorting, CFD's, options etc. - the whole well-known gamut of financial interests in a company's well-being - because these instruments do not bring voting rights i.e. it is not the financial element that is of major concern, it is the company management rights that come with shares. It would be inappropriate for them to make enquiries or expect to be informed of my personal financial affairs but very legitmate that they be aware of any powers I might have to direct the affairs of a partner company.

Therefore I feel no obligation to inform them of any form of investment or speculation in partner companies other than shareholding or the office of Director. I believe this line of reasoning shows good faith (and as it is Sunday I can spend my afternoon how I like).

 

[ODL Markets]

sak07

we have just launched a SB product for ODL Markets. In the account opening area there is a section that allows clients to enter a secondary email address for the compliance officer (if required). There is no reason why you should not spread bet AS LONG AS your company says its ok - this may depend on a number of factors eg if you deal in M&A you should not participate in areas that are sensitive to your job. If you have zero influence over the direction of the FTSE then it should be ok to trade. What you have to determine is ....is SBetting a suitable product for you to trade and this is also what the SB company has to determine - hence the list of questions in the account opening section. As you say though, get clearance first!

Good luck, ODL Markets