FCA Delays Issuing New CFD Rules Until "Summer 2019"

The UK's Financial Conduct Authority announced on Friday morning that it is delaying publishing final rules that will govern the retail trading industry.

In December of last year, the British regulator said that it was likely to make the European Securities and Markets Authority's (ESMA) product intervention measures permanent.

Introduced last August, those rules, which will be familiar to most of our readers, banned binary options and put caps on Leverage Leverage In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders Read this Term available to retail customers trading in contracts for difference (CFDs) and foreign exchange (FX).

Currently, those rules are temporary and have to be renewed every three months - something ESMA has done consistently since they were first implemented almost a year ago.

Thus, to ensure that the rules remain in effect permanently, the FCA said that it wanted to put them into British law. Regulators in the Netherlands, Germany, and France plan on doing the same or have done so already.

The legislation that the British regulator wants to introduce appears to be almost exactly the same as ESMA's. One difference is that the FCA has said it plans on making sure products similar to CFDs, such as turbo contracts, will be included in the regulations.

Summer dreams

After announcing its plans in December, the FCA issued another statement in February saying that it would announce the new rules in April.

Perhaps as a result of Brexit Brexit Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum. In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades.The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019. Active Prime Minis Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum. In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades.The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019. Active Prime Minis Read this Term negotiations being extended until October, the financial watchdog has now said it will publish its CFD regulation in the coming months.

"As we are still considering the consultation feedback and ESMA’s temporary restrictions continue to apply to FCA-authorised firms, we now plan to publish a Policy Statement and any final Handbook rules in Summer 2019," said the regulator in a statement issued on Friday.

"Our final rules for CFDs would apply from the date that ESMA’s restrictions expire, if not earlier."

Though it seems unlikely to happen, there has been some hope in the FX trading industry that a post-Brexit Britain would be more lenient in its treatment of retail trading firms.

Speaking earlier this week, Andrew Bailey, the FCA's chief executive officer, said that “left to our own devices, the UK regulatory system would evolve somewhat differently [to the EU's]."