FCA’s CFD crackdown gets lukewarm welcome

Author: Lizzie Meager | Published: 15 Dec 2016

Reforms proposed by the UK’s Financial Conduct Authority (FCA) for contracts for difference (CFD) products have caught the market off-guard, and received an unenthusiastic response.

The regulator claims CFDs, like spread bets and rolling spot foreign exchange products, are not well understood by retail customers, and that 82% of clients lose money on them. It’s part of a broader consumer protection drive, but some in the market think it underestimates investors.

Trading CFDs: gambling or investing?Ashurst partner Jake Green said the proposal, which wasn’t mentioned in detailed briefings throughout the year, more closely resembles product intervention than conduct regulation. "The industry may consider the FCA’s position misunderstands the clients using these services," he added. "Many do understand the risk and are...



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