CFDs revisited – already!

Late last year the Financial Conduct Authority revisited the temporary measures against binary options and contracts for difference, in order permanently to ban sales of the former to retail investors as well as impose restrictions on sales of CFDs. But who is the target market for these products anyway? asks Adam Samuel.

Adam SamuelBA LLM DipPFS MCISI FCIArb Certs CII (MP&ER) Barrister and Attorney may be contacted atadamsamuel@aol.com.For links to where you can buy the second edition of ‘Consumer Financial Services Complaints and Compensation’, see www.adamsamuel.com/book.

In June 2018, I wrote a piece about the European Securities and Markets Authority’s three-month temporary measures to ban the marketing, distribution or sale of binary options to retail customers and place some complex limits on the same activity with respect to other contracts for differences (CFDs). The article made the point that when the measures expired, the FCA was in an excellent position to strike against the CFD industry because its proposals contained in CP16/40 on which ESMA had largely based its measures were up and ready to be used on a more permanent basis.