Ireland considers ban or severe restrictions on CFDs for retail clients

[mlawson71]

The Central Bank of Ireland (CBI), which also serves as a financial services supervisor, has published a consultation paper considering the prohibition of the sale or distribution of CFDs to retail clients in and from Ireland and the implementation of enhanced investor protection measures.

Among other options considered are the prohibition of marketing of such products to retail investors and/or the limiting of leverage offered to retail investors to 1:25, regardless of the margin deposited by the client.

 

[Robert Morse]

The Central Bank of Ireland (CBI), which also serves as a financial services supervisor, has published a consultation paper considering the prohibition of the sale or distribution of CFDs to retail clients in and from Ireland and the implementation of enhanced investor protection measures.

Among other options considered are the prohibition of marketing of such products to retail investors and/or the limiting of leverage offered to retail investors to 1:25, regardless of the margin deposited by the client.

Wow. They want the limit to be 25x? What is that now?

 

[murray t turtle]

Wow. They want the limit to be 25x? What is that now?

Cypress + Turkey are the real turkeys; one banned bonuses, Turkey caped leverage @ 1:10.

 

[JackRab]

I think standard CFD contract is 100? They are basically like futures...

EDIT, scrap my comment... I don't trade CFD's... just found an example where you paid a 3% margin... so that's 33x leverage, but I don't know any specifics other than that I view CFD's as bucketshop instruments...

 

[Visaria]

It's around 250x. I've had some emails from a few of my providers that they are cutting to 200x. This is on index futures, currencies and commodities. Yes, you only have to put up $560 to trade the equivalent of one es contract (overnight as well). Margins for stocks are 5%-10%.

Wow. They want the limit to be 25x? What is that now?

 

[Robert Morse]

sounds extreme to me.

 

[mlawson71]

The crackdowns will continue this year - the Spanish financial regulatory body, the Comision Nacional del Mercado de Valores (CNMV), said it plans to take steps towards high-risk investment products, including contracts for difference (CFDs). It did not specify whether it intends to impose restrictions or to ban the products altogether.

 

[Visaria]

I don't see why all this crackdown...I don't know why the regs have such a sudden interest in the leverage offered by the retail providers....don't know of any problems that have been suffered by retail traders.

 

[MrScalper]

I don't see why all this crackdown...I don't know why the regs have such a sudden interest in the leverage offered by the retail providers....don't know of any problems that have been suffered by retail traders.

I suppose "losing most or all of your money" is considered by some to be a problem.