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FCA makes ESMA’s CFD restrictions permanent, but allows higher leverage on bonds

#1
UK’s Financial Conduct Authority (FCA) confirmed its decision to permanently restrict the sale of CFDs and CFD-like products on a national level earlier this week. While most of these restrictive rules mirror ESMA’s product intervention measures, there are some slight alterations, such as the higher leverage allowed for the sale of government bonds.

FCA’s rules are aimed at guaranteeing consumer protection and will come into effect from the 1st of August for CFDs and on the 1st of September for CFD-like options.

More specifically, these measures include a requirement for all brokerages to provide negative balance protection to all account holders, to close out a customer’s position when their funds fall to 50% of the margin needed, to place a standardized risk warning on their websites, to stop offering monetary and non-monetary inducements to encourage trading (such as bonuses), as well as to offer leverage of 1:2 to 1:30, depending on the asset class.


Re: FCA makes ESMA’s CFD restrictions permanent, but allows higher leverage on bonds

#2
mlawson71 wrote:
Fri Jul 05, 2019 1:13 am
UK’s Financial Conduct Authority (FCA) confirmed its decision to permanently restrict the sale of CFDs and CFD-like products on a national level earlier this week. While most of these restrictive rules mirror ESMA’s product intervention measures, there are some slight alterations, such as the higher leverage allowed for the sale of government bonds.

FCA’s rules are aimed at guaranteeing consumer protection and will come into effect from the 1st of August for CFDs and on the 1st of September for CFD-like options.

More specifically, these measures include a requirement for all brokerages to provide negative balance protection to all account holders, to close out a customer’s position when their funds fall to 50% of the margin needed, to place a standardized risk warning on their websites, to stop offering monetary and non-monetary inducements to encourage trading (such as bonuses), as well as to offer leverage of 1:2 to 1:30, depending on the asset class.
That's why I closed my accounts in Europe already last year. Same in the US with their nonsense of FIFO, also "to protect the retailers". How ridiculous to claim consumer protection while refusing to address the actual problem. The banks can gamble with my money (savings) on derevatives or hot air products and when they get broke the tax payers have to bail them out. On the other hand they put restrictions on what I can or cannot do with MY own money.


Re: FCA makes ESMA’s CFD restrictions permanent, but allows higher leverage on bonds

#6
mlawson71 wrote:
Tue Jul 16, 2019 1:38 am
RplusT wrote:
Sat Jul 13, 2019 9:39 am


Australia
If you're not actually an Australian keep in mind that the Australian authorities recently banned local brokers from offering their services to non-Australian citizens.
Thanks for bringing this up. Yes, I was aware of this as soon as I saw that the UK followed the EU. I have asked brokers including mine and they all say there is no need for migration at this stage. So be it. I work with several brokers in diffrent locations to secure my options.
I have actually asked ESMA (they said traders are welcome to send them their opinions) how does pushing brokers and their clients offshore with dubious regulations protect consumers. Of course they can't tell. What a bunch of BS this action obviously is. I would be eager to know what's the real agenda behind this. What is also very disturbing is their refusal to regulate the banks. The next crash is in the making.

Re: FCA makes ESMA’s CFD restrictions permanent, but allows higher leverage on bonds

#7
RplusT wrote:
Wed Jul 17, 2019 7:46 pm
mlawson71 wrote:
Tue Jul 16, 2019 1:38 am


If you're not actually an Australian keep in mind that the Australian authorities recently banned local brokers from offering their services to non-Australian citizens.
Thanks for bringing this up. Yes, I was aware of this as soon as I saw that the UK followed the EU. I have asked brokers including mine and they all say there is no need for migration at this stage. So be it. I work with several brokers in diffrent locations to secure my options.
I have actually asked ESMA (they said traders are welcome to send them their opinions) how does pushing brokers and their clients offshore with dubious regulations protect consumers. Of course they can't tell. What a bunch of BS this action obviously is. I would be eager to know what's the real agenda behind this. What is also very disturbing is their refusal to regulate the banks. The next crash is in the making.
My theory is that the real agenda is for only the whales to remain on the market but don't quote me on that.
And I completely agree with you, this does not protect EU traders at all, just pushes them in the hands of shady bucketshops.
Regarding Australian brokers, I hope that you won't have to change companies, but I would recommend finding an alternative just in case.

Re: FCA makes ESMA’s CFD restrictions permanent, but allows higher leverage on bonds

#8
The European Securities Markets Authority (ESMA) reacted negatively to the proposal of the Polish regulator to allow leverage as high as 1:100 for some qualified retail traders.

The pan – European regulator also will not give green light to the CySEC proposal to allow different tire leverage for retail traders depending on their income. Back in May the Cyprus Securities and Exchange Commission proposed to allow wealthier traders to use leverage of up to 1:50, while for not so affluent retail investors the leverage rules to get tougher.


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