CFD Brokers fallen 30 %!
CFD Dealers Plunge as FCA Seeks Stricter Rules for Products (1)
2016-12-06 08:45:22.166 GMT
By Gaspard Sebag
(Bloomberg) -- Plus500 Ltd. and IG Group Holdings Plc
shares plummeted after the U.K.’s Financial Conduct Authority
proposed toughening rules on retail sales of so-called contract-
for-difference products, such as spread bets, to boost consumer
protection.
An FCA study showed that 82 percent of clients lost money
on these products, which are often offered through online
platforms, the regulator said on Tuesday. In response, the FCA
proposed introducing measures such as risk warnings and
mandatory disclosure of profit-loss ratios on client accounts as
well as capping leverage at a maximum level of 50 to 1 for all
retail clients.
Plus500 shares fell as as much 39 percent in London trading
while IG Group shares declined as much as 26 percent on the
news.
“We are introducing stricter rules for CFD products to
ensure the sector addresses the shortcomings identified, and
that firms make sure that retail clients are aware of the high
risks involved in trading these complex products,” said
Christopher Woolard, executive director for strategy and
competition at the FCA. The FCA’s consultation period ends on
March 7.
CFD Dealers Plunge as FCA Seeks Stricter Rules for Products (1)
2016-12-06 08:45:22.166 GMT
By Gaspard Sebag
(Bloomberg) -- Plus500 Ltd. and IG Group Holdings Plc
shares plummeted after the U.K.’s Financial Conduct Authority
proposed toughening rules on retail sales of so-called contract-
for-difference products, such as spread bets, to boost consumer
protection.
An FCA study showed that 82 percent of clients lost money
on these products, which are often offered through online
platforms, the regulator said on Tuesday. In response, the FCA
proposed introducing measures such as risk warnings and
mandatory disclosure of profit-loss ratios on client accounts as
well as capping leverage at a maximum level of 50 to 1 for all
retail clients.
Plus500 shares fell as as much 39 percent in London trading
while IG Group shares declined as much as 26 percent on the
news.
“We are introducing stricter rules for CFD products to
ensure the sector addresses the shortcomings identified, and
that firms make sure that retail clients are aware of the high
risks involved in trading these complex products,” said
Christopher Woolard, executive director for strategy and
competition at the FCA. The FCA’s consultation period ends on
March 7.
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