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FCA Awaits Conclusion Of European Contract-For-Difference Discussions

[ 29 Jun 2017 10:21 ]

LONDON (Alliance News) - UK financial regulator Financial Conduct Authority on Thursday said it has delayed final conduct rules for UK firms providing contract for difference products, pending the outcome of the European Securities & Markets Authority's discussions.

Given progress in ESMA's own consideration of the use of its product intervention powers in this area, the FCA said it has decided to delay making final conduct rules for UK firms, pending the outcome of ESMA's discussions.

ESMA has confirmed that the measures being considered take into account requirements that have been adopted, or publicly consulted on, by European Union National Competent Authorities.

Some of the measures under discussion at ESMA are "broadly similar" to those proposed by the FCA in its December 2016 consultation paper, such as including leverage limits. The FCA also said measures not consulted on in CP16/40, including guaranteed limits on client losses, are being discussed.

The precise nature of the measures for each category of products are still being discussed by ESMA, the FCA said. In the event of a significant delay to possible ESMA measures, the UK regulator said it would reconsider making final rules at a domestic level in the first half of 2018.

London-listed companies likely to be affected by the regulations include online trading firms IG Group Holdings PLC, CMC Markets PLC and Plus500 Ltd.

Shares in CMC were flat Thursday at 146.25 pence. Plus500 shares were up 0.5% at 552.50p, while IG was down 0.4% at 558.00p.

"As we monitor the progress of ESMA's product intervention process, the FCA will conduct further policy work in light of consultation feedback. We expect this to include a further request for additional data from a sample of UK firms over the coming months. Information received during the consultation period suggests that lower leverage is associated with better client outcomes across a number of firms. However, more detailed and comparable firm data are required to provide clarity on the impact of different factors on individual client outcomes," the FCA said.

By Lucy Heming; lucyheming@alliancenews.com

Copyright 2017 Alliance News Limited. All Rights Reserved.


FCA Awaits Conclusion Of European Contract-For-Difference Discussions - Alliance News

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