thread: FCA imposes bonus ban and leverage cap for CFDs

The Financial Conduct Authority (FCA) has issued directives today proposing stricter rules for firms selling Contract for Difference (CFD) merchandise to retail clients to improve standards across the industry and ensure consumers are appropriately protected.

The main changes (listed below) involve a ban on account opening bonus payments to retail traders, and a hard cap on leverage.
The FCA#8217;s moves come only a week after http://www.leaprate.com/2016/11/cyse...verage-at-50x/. Cyprus is a major center for Retail Forex and Binary Options brokers.

exemptions for differences, for example spread bets and rolling spot foreign exchange products, are complex financial instruments offered by investment companies, often through internet platforms. After a rise in the amount of companies in the CFD market, the FCA has concerns that more retail clients are trading and opening CFD products they don't adequately understand. The FCA#8217;s analysis of a representative sample of customer accounts for CFD companies found that 82 percent of customers lost money on those products.

The FCA is therefore suggesting a package of measures meant to enhance consumer protection by restricting the risks of CFD products and ensuring that clients are better educated. The new measures include:Introducing standardised risk warnings and compulsory disclosure of profit-loss ratios on customer accounts by all suppliers to better illue the risks and historical performance of merchandise. Placing lower leverage limits to inexperienced retail customers who don't have 12 months or more experience of active trading in CFDs, using no more than 25:1. Capping leverage at a maximum level of 50:1 for many retail customers and introducing lower leverage caps across various assets depending on their risks. Some levels of leverage currently available to retail clients exceed 200:1. Preventing providers from utilizing any form of trading or account opening bonuses or rewards to market CFD products. The FCA can also be putting out its vision on a range of policy measures for binary bets which would complement current conduct of business rules, after these products are brought into the FCA#8217;s regulatory extent.


http://www.leaprate.com/2016/12/fca-...ules-for-cfds/

I'm annoyed at the proposals, they seem to have been brought about because a high number of clueless newbies lost all their money, whined, were advised by their broker sorry that's the market, you agreed you understood and therefore went whinging into the FCA. When I was a newbie, I took care to comprehend what I was getting into, just so I did not suddenly lose large sums. A Leverage cap means traders must get more cash on deposit with brokers. Ask clients of Alpari how that worked out to them. Additionally, it means traders with less cash...

In the united kingdom, FX brokers sponsor Premiership and Championship football/soccer shirts, so the normal football punter would be the ones complaining!!

This is an update:

Breaking: FCA Delays New Forex and CFDs Regulations before 2018
The UK FCA has stalled its new limitations on CFDs and Foreign Exchange trading since ESMA looks into its own measures.

https://www.financemagnates.com/fore...ons-till-2018/

https://www.leaprate.com/forex/regul...view-industry/

Is x50 leverage collection for many FCA brokers in January?

FCA (UK) will accompany ESMA, Rules to be implemented 3rd Jan 2018.

Maximum Leverage allowed 30-1 nevertheless 5-1 for more exotic pairs.

Worse than expected!!

A number of us will go offshore, if possible. I don't understand how my Dukascopy account is going to be impacted.

Https://www.ft.com/content/1bb3cdde-...2-916d4fbac0da

FXCM
https://www.financemagnates.com/fore...s-restrictive/

Saxo Bank is happy
https://www.financemagnates.com/fore...age-arms-race/

Gain Capital
https://www.leaprate.com/forex/regul...-leverage-cap/


So today Max Leverage is 30-1, those shedding will today become winners (sarcasm).

FX brokers should have never advertised into the mainstream punter; Football and F1 sponsors.

Inserted Video

I like the Doors.

FCA (UK) will follow ESMA, Rules to be implemented 3rd Jan 2018. Maximum Leverage enabled 30-1 nevertheless 5-1 for more exotic pairs.

Source to your claim?

Nothing is implemented - that the said date is the time when Mifid II is becoming reside, thats it. Everything else is a proposal which is beeing subject of discussion. And almost all brokers up to date signal their worries about the hefty leverage cap. If folks wish to speculate, they will achieve that. If not regulated within the EU, compared to in more dishonest places or with more dishonest assets. ESMA will recognize sooner or later.

quote Source to your claim? Nothing is executed - that the said date is the time when Mifid II is becoming reside, thats it. Everything else is a proposal which is beeing subject of discussion. And almost all brokers up to date signal their concerns concerning the heavy leverage cap. If folks want to speculate, they are going to do so. Otherwise controlled within the EU, than in more dishonest places or with more shady assets. ESMA will realize.

03 Jan 2018: MiFID II rules to come into effect for ALL Investment companies in the united kingdom
http://www.mifid2.info/mifid-ii-time...mentation.html

https://www.cliqforex.com/trading-sy...ett-style.html earlier post

The ESMA leverage cap will be contained in Mifid II, its not just speculation. Mifid 2 is a year late.
They've had an excess year to pick. There are only 7 working days between today and 3rd Jan 2018, nothing will change between that time 30-1 Leverage Cap in the UK, I'm calling it.

There is a public consultation in January 2018 on this matter.

Source: https://www.esma.europa.eu/press-new...binary-options

https://twitter.com/ESMAComms/status/941781819669864448