We have finalised rules restricting how CFDs and CFD-like options are sold, marketed, and distributed to retail consumers.
Contracts for difference (CFDs) are complex, leveraged derivatives. They are typically offered to retail consumers through online trading platforms.
We have intervened in this market to address poor conduct by UK and European Economic Area (EEA) firms who offer CFDs to retail consumers, and to limit the sale of CFDs and similar products with excessive risk features that result in harm to retail consumers. Retail consumers are expected to save between £267 million and £451 million per year from our measures.
We are requiring firms that offer CFDs and CFD-like options to retail consumers to:
Following feedback to CP18/38, we have amended our rules to:
Our measures will directly affect:
If your firm carries out sales, marketing or distribution in, or from, the UK of the relevant products to retail clients, you will be required to comply with the new rules in our Handbook from:
We expect firms to comply with these restrictions. Our supervisory work in this area will likely focus on the following areas of the restrictions:
We will also continue to monitor for any harm to retail consumers relating to exchange-traded futures and similar ‘over-the counter’ products.