IS the End in sight for UK FX Retail Trading

Sorry, but…

old news :slight_smile:

http://forums.babypips.com/forextown/83768-uk-government-clamp-down-spread-betting.html?highlight=FCA+PipMeHappy

umm…i think you’re mistaken

The proposal was indeed discussed at the back end of last year.

Now we are getting the results from the proposal - hence, what IS going to change.


I see… apologies for that specific point… however, I do not see much difference between what

was proposed and what will be implemented, overall…

In the end, it will not stop many people at all, it is a smokescreen… that is my belief.

You can still go to ruins with 50x leverage, to say one thing…

What do you think?

I really hope it is just a [I]smokescreen[/I]; however the leading UK brokers really don’t seem to think it will be quite so simple [as just leverage being reduced, anyway]. However, on the point of leverage, the proposal suggested 25:1 unless you can show one years experience in which case 50:1 maximum, as you also said.

I’d personally be guessing the rest, but i’m sure anyone can read in between the lines of the proposal which was attached in a previous post - it’s not such a rosy outlook, in fact it very much appears that they are going for the hard line.

Personally, I’d like it to be a soft regulation, but I would not be surprised if the minimum account opening requirements was £10K with a minimum net worth of £100k in either cash or assets.

The following extract from the proposal does ask the question regarding account opening requirements, such as the smallest opening balance.
[I]
• Retail clients are being offered [B]smaller minimum account sizes[/B] and order sizes [B]combined
with higher leverage[/B], with some firms offering in excess of 200:1. At 200:1, clients are only
required to post 0.5% of their total notional exposure (this is commonly known as initial
margin).[/I]

I guess anyone could argue this? Do they attack leverage or account opening balances or indeed both?

Blame it on Trump

One thing is for sure, and that’s that we are certainly following in the shadow of the US regulations…

I’m very surprised that what is going to happen has caused so little concern to UK retail traders.

You are right Jezz & you guys need to fight it in any way that you can. This sounds even worse then what Dodd Frank Bill did to us U.S. retail traders.

I guess it is what it is now, the papers have passed, the feedback has been taken into account by the FCA (which, actually means, that it has been thrown in the bin)…in the next weeks we will see what the regulations are and we are stuck with them.

Time will tell!

The ball is in motion…

I have a terrible feeling that this is only the start, regardless of weeding out the less regulated brokers.

And so continues the quest to strip the rights from the prudent and the ones who bother to educate themselves in order to protect the ignorant and irresponsible. Better give everyone a few big sacks of cotton wool to wrap themselves in…then we’ll all be really safe.

I guess the FCA would consider themselves as the ones of whom are educated, protecting the retail clients…the reality though, is that they are going to punish the retail traders and not so much the retail brokers.

By implementing such [B]proposed regulations[/B] [this is in bold as it is proposed, not my opinion], will only actually stop retail traders from interacting in such activity.

I totally understand the differential between retail brokers and the actual market (of which the two hardly ever meet to make transactions) - regardless of this, I believe it is unfair to limit the participation of all retail traders based on being able to prove:

  1. Demand a minimal Net worth
  2. Demand high opening balances
  3. Demand past experience within the financial markets

The above three points have been taken from the proposal paper issued by the FCA - it has no baring on if they actually pass into regulation.

I don’t know about that; am not following the news and focusing on trading and praying both of which done in the middle of the night Honolulu being the time zone it is. DJT supports some kind of ‘haircut’ his words on Dodd Frank. As for giving up in despair, I have never run into any problem using an off shore broker other than having them give up. This year’s tax return in the US included the following new question I don’t recall seeing last year on TurboTax: do you have an off shore bank account [includes brokerage]? If yes, is it over $10,000? I said ‘yes’ and ‘no’ truthfully. Right now I am very happily ensconced with an off shore broker - the move to it was helped by Clint’s stellar thread here on babypips, about what US traders have in the way of overseas options. So some of the response to this ominous news by UK traders I am sure is like it was in the US. US traders with a certain kind of ‘attitude’ went ahead anyway, did the research, made adjustments and kept the almost exact conditions they want. Our compatriots across the pond, two ponds in my case, I believe are resolute. They’ll find a way.

As mentioned in an earlier post, one of the potential problems with using offshore brokers, regardless of the underlying reason for doing so, is that the specific regulatory authority in place for the specific offshore broker will have different levels of protection compared to what perhaps the FCA offer.

This may not be a problem to some people, or indeed it may not even be top of ones agenda when carrying out due diligence checks - Personally, I’d have this as a priority tick box exercise before looking any further.

Then again, lets hope it doesn’t quite come to this extreme :slight_smile:

Well, no point starting…time to find something else to do. Because I am not moving country for a standard account that I can get today that will be gone/restricted tomorrow.

How have you not started already since Oct 2008, according to your join date!

Lets just hold back though and watch this space, and finally adjust to the outcome. There is clearly a split view on what scenario may prevail, from a soft regulation to a full on hard regulation where lots of clients will be effected.

I’m going to hope for the best, the best being some way I still get to play without too much difficulty! So far all it’s cost me is a monitor, a mouse and a lot of time, the first two would have happened sooner or later anyway and there’s much worse ways to spend my time, it would be a shame if it was all for nothing though!

I’m going to stick to forward testing a few strategies on demo accounts and not so much time learning new things until the results are in.

Update:

FCA (Financial Conduct Authority) delays outcome and final decisions - now awaiting decisions form ESMA (European Securities and Market Authority). The FCA have understood that the ESMA are evaluating similar guidelines and regulations which the FCA were also evaluating. Therefore it makes sense to wait and see what the ESMA say first. Final decision/implementation from ESMA should be no later than 03.01.2018. It’s worth understanding that the FCA may well ‘bolt-on’ additional regulations for UK based retail clients on top of what is decided by the ESMA.

Either way - What started as a UK Broker focused review on regulations is now turning to a review on all European Brokers, which is rather significant. We could see a real shift in the way that the retail sector is ran from next year, hopefully for the better? As for who initiated these talks first, the FCA or the ESMA; which came first, the chicken or the egg?

Here is a link to all possible European changes that may take place within the retail sector for CFD and rolling Spot FX accounts. [as always, you will need to read between the lines and take the hints]

Key Summary:

A reduction in Leverage has been a big focus, along with guaranteed maximum account losses not exceeding deposit amount and a ban on advertising and bonus incentives.

A minor point to pick up on is that the minimum account opening deposit value is looking to increase to a value that cuts out low level retail clients - start saving if you’re hoping to open an account next year with less than perhaps $1,000 (at a guess).

Some of that’s a really good idea.

The ban on bonus incentives, and increase in minimum deposits, are really things that only scammers, crooks and the incredibly naive could object to. There are quite a lot of all those groups, though.

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I feel quite comfortable with the proposals, nothing to harsh or irrational.

Although, I also don’t want the legislation to be to extreme, such as the SEC in the US. I only found out today that to open an FX account with IB requires a non-US client a minimum deposit of $10K, which is all good and dandy. But, for a US client it will cost them a minimum of $10M (in assets), yes TEN MILLION DOLLARS. IB (Interactive Brokers) is one of highest regarded retail brokers in the world, so this type of legislation speaks volumes.