CP18/38 response form

First published: 07/12/2018 Last updated: 07/12/2018

We are asking for comments on the proposed product intervention measures for retail contracts for differences (questions 1-9) by 7 February 2019.

We are asking for comments on our discussion of possible product intervention measures for retail futures and other substitutable derivative products (questions 10-17) by 7 March 2019.

Please use this online form or alternatively email: [email protected]

We make all responses to formal consultation available for public inspection unless the respondent requests otherwise. We will not regard a standard confidentiality statement in an email message as a request for non-disclosure.

Despite this, we may be asked to disclose a confidential response under the Freedom of Information Act 2000. We may consult you if we receive such a request. Any decision we make not to disclose the response is reviewable by the Information Commissioner and the Information Rights Tribunal.

Once you complete this form, we will email you a copy of your submission to acknowledge receipt of your response.

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Q1: Do you support our proposal to capture CFD-like options and other products that have the same or similar features to CFDs?
Q2: Does the scope of our proposed glossary definition of ‘restricted option’ sufficiently capture these products?
Q3: Do you agree with the proposed leverage limits for retail clients?
Q4: Do you have any comments on the draft Handbook rules for leverage limits?
Q5: Do you agree with the proposal to set a margin close out rule at 50% of initial margin required?
Q5b: Do you have any comments on the draft Handbook rule for margin close out?
Q6: Do you agree with the proposal to require firms to limit client losses to the funds deposited in their CFD trading account?
Q6b: Do you have any comments on the draft Handbook rule for negative balance protection?
Q7: Do you agree with the proposal to ban monetary and non-monetary benefits for account opening or trading?
Q7b: Do you have any comments on the draft Handbook rule for the ban on monetary and non-monetary benefits?
Q8: Do you agree with the proposal to apply a standardised risk warning, including the disclosure of the percentage of loss-making retail client accounts?
Q8b: Do you have any comments on the draft Handbook rule for the standardised risk warning?
Q9: Are there any modifications to the methodology in the draft Handbook rule that would ensure that the percentage of loss-making accounts disclosed by the firm provides an accurate indication of client performance?

Q10: If you currently offer futures products to retail clients, please provide the following information (1 January 2018 to 31 December 2018):

Q11: Have we accurately described the current distribution and typical target market for futures?
Q12: Do you have any views on the potential likelihood and risk of futures being sold more widely as a substitute for CFDs?
Q13: Have we correctly identified the key features of futures that could pose similar risks of harm to retail consumers?
Q14: Are there any other products that could pose similar risks of excessive leverage or risks for retail clients comparable to those create by CFDs that we should consider?
Q15b: Would any of the individual measures be more or less appropriate and proportionate for these products, including alternative leverage limits?
Q16: Do you have any comments on a possible exemption for retail clients that use these products for commercial hedging purposes?
Q17: Would applying comparable measures to other substitutable derivative products be proportionate and appropriate?