[B]I would like to use this thread to talk about the following changes that will be taking place which will effect all UK retail clients who use leveraged products, such as CFDs and FX.
Over the coming weeks when the FCA starts to issue guidelines of the confirmed changes they will be updated here[/B]
Talks are planning to go ahead in the next months (latest June 2017) with the relevant authorities (FCA) and tension is running high throughout all UK based retail brokers, both Spread Betting and leveraged CFD providers.
After I took the time to discuss this with some of the biggest UK brokers, to name a few (IG, FX Pro, LCG [and the Financial Conduct Authority āFCAā]) it is clear that there is a high level of unknown uncertainty, and everyone is hoping that preliminary decisions will be drawn in the sand within the next 8 weeks for the future of UK FX trading (actually, this includes all leveraged trading on all financial products).
The top four points on the agenda which is almost a āsure betā from the clients side of the consultation paper issued is that of:
[ol]
[li]Reduced account leverage, upto a maximum of 1:50, much less for traders with less than 12 months industry track record
[/li][li]Much higher minimum account opening balances
[/li][li]Proof of your own income and net worth, if you donāt have enough cash/asset equity you may not be allowed to open an account
[/li][li]Proof that you know how to trade with āreal historyā in the markets
[/li][/ol]
This is really worth keeping an eye on over the next six months in the UK, the ramifications of such decisions will clearly isolate the less wealthy individuals who want to open a new trading account, regardless of them taking the business seriously. We all have to start somewhere, lets not forget this.
It seems that traders who have opened accounts and lost money have done so without fully understanding the risks involved. The financial and regulations authorities are now on to this and will put rules into place.
This could be the end of FX trading as we know it in the UKā¦
[I]
"After the FCA proposed leverage limitations and other restrictions on CFDs in December, Britainās biggest listed providers ā IG Group, CMC Markets and Plus500 ā lost billions of pounds in value. CMC, led by former Tory treasurer Peter Cruddas, was demoted from the FTSE 250 last week.
The UKās financial watchdog has received more than 2,500 responses to its proposals to limit the sale of risky trading bets to retail investors, a far stronger reaction than its consultations usually elicit.
Nick Bayley, a former department head at the FCA and now managing director at advisory firm Duff and Phelps, said the high response rate āsuggests to me thereās been an orchestrated campaign of some sortā. (Ironically, when I was talking to some of the big UK brokers I quickly found out who was driving this campaign, it can therefore be confirmed as a forced campaign)
Typically, the FCAās consultation papers would receive 10 to 150 comments."
[/I]
[B]Consultation paper here > https://www.fca.org.uk/firms/contracts-for-difference[/B]