This statement provides an update on the Financial Conduct Authority’s (FCA) consultation on permanent product intervention measures to restrict the sale, marketing and distribution of contract for differences (CFDs) and CFD-like options sold to retail clients.
We published our Consultation Paper on 7 December 2018, which proposed making the European Securities and Markets Authority’s (ESMA’s) temporary product intervention measures for CFDs permanent in the UK. Our proposed interventions are the same in substance as ESMA’s, although we are also proposing to apply our rules to closely substitutable CFD-like products. The consultation closed on 7 February 2019.
We published a statement on ‘onshoring ESMA’s temporary intervention measures on retail CFD and binary options products’ on 22 February 2019. We indicated that we planned to publish a Policy Statement and any final Handbook rules in April 2019 for CFDs and CFD-like options.
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. Our final rules for CFDs would apply from the date that ESMA’s restrictions expire, if not earlier. Firms that sell, market, or distribute CFD-like options would be given at least two months to comply with our new rules.
Firms must continue to comply with ESMA’s decision notice that imposes temporary restrictions on the marketing, distribution or sale of CFDs to retail clients. Should EU law cease to apply in the UK before ESMA’s decision notice expires, ESMA’s decision notices will continue to apply as part of UK law. Our supervision of firms in this sector will remain focused on compliance with ESMA’s measures.