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Regulation

FCA new CFD regulations are postponed to summer 2019

Maya Mandz | Apr. 26, 2019
FCA new CFD regulations are postponed to summer 2019

April 26, 2019, | AtoZ Markets - The UK Financial Authority announced this week that FCA new CFD regulations that will govern the retail trading industry will be delayed until summer 2019. The British regulator was likely to make the ESMA product intervention measures permanent. However, it seems like the release of the FCA new CFD regulations will have to take some time.

The ESMA ban on binary options-never ending story

The first time, the European Securities Market Agency (ESMA) rules we introduced almost a year ago. Currently, the aforementioned rules that ban binary options, impose restrictions on leverage available to retail CFD and foreign currency have been already updated few times by ESMA.

The European regulator renews its restrictions every three months. The next extension is scheduled for the second half of April and is due to take effect on May 1

As a result, to ensure that the rules remain permanent, the UK FCA decided to put them into British law. Regulators in the Netherlands, Germany, and France plan to follow the UK example, although, they might have done it already. More than a month ago the British financial authority reported that binary options prohibitions and CFDs restrictions initiated by ESMA will remain part of the UK domestic law.

The UK FCA noted it plans on making sure products similar to CFDs, such as turbo contracts, will be included in the regulations.

FCA new CFD regulations will differ from the European?

In February, the UK FCA issued another statement, saying it would announce new rules in April.

The British regulators made its statement against the background of the continuing Brexit talks extensions. Later the UK authority representatives stated that they plan to “publish the Policy Statement and any final rules of the Guidelines in the summer of 2019”.

The regulator explained that “they are still considering feedback on the consultations, and the time limitations of the ESMA continue to apply to firms authorized by FCA

"Our final rules for CFDs will apply from the expiration date of the ESMA restrictions, if not earlier," the UK FCA concluded.

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