UK’s Financial Conduct Authority (FCA) has followed the example of the Cyprus Securities and Exchange Commission (CySEC), issuing a ban on trading bonuses and setting a cap of 1:50 on CFDs. They will be preventing brokers from offering any form of trading or account opening bonuses or benefits to promote CFD products.
In its statement the UK regulator commented that CFDs such as those on spread betting and rolling spot forex products are complex financial instruments, which many retail customers do not adequately understand and the FCA found through a survey that 82% of clients lost money on these products.
For this reason the FCA is proposing a package of measures intended to enhance consumer protection by limiting the risks of CFD products and ensuring that customers are better informed. One of these measures is 1:25 leverage for inexperienced retail clients who do not have 12 months or more experience of active trading in CFDs.
In its statement the UK regulator commented that CFDs such as those on spread betting and rolling spot forex products are complex financial instruments, which many retail customers do not adequately understand and the FCA found through a survey that 82% of clients lost money on these products.
For this reason the FCA is proposing a package of measures intended to enhance consumer protection by limiting the risks of CFD products and ensuring that customers are better informed. One of these measures is 1:25 leverage for inexperienced retail clients who do not have 12 months or more experience of active trading in CFDs.
