The World Federation of Exchanges (WFE) urged the UK Financial Conduct Authority (FCA) not to restrict cryptocurrency derivatives for retail investors.
October 8, 2019, | AtoZ Markets — WFE is a global trade association of 64 publicly traded stock, futures, and other exchanges. It is an international trade group that supports the interests of regulated securities exchanges around the world. And It also promotes widespread access to financial markets and the security and soundness of the global financial system.
Crypto Derivatives Regulations in the UK
Exchanges of Cryptocurrency in the United Kingdom generally need to register with the Financial Conduct Authority (FCA). But some crypto companies may instead obtain an electronic license. There are no special provisions for exchanges. But the FCA guidelines emphasize that entities dealing with crypto-related activities (such as futures and options) require authorization.
Recommendations of the World Federation of Stock Exchanges
WFE has asked the UK market supervisory authority, the Financial Conduct Authority (FCA), not to prohibit cryptocurrency derivatives for retail investors. Through an announcement published on Monday (October 7), the World Federation of Exchange (WFE) urged the FCA not to prohibit cryptocurrency derivatives. It is most important to find a balance between the possibility of negotiating products on the market and the guarantee. These are negotiated in safety from regulated providers.
WFE CEO Nandini Sukumar said that we ask that the authorities, including the FCA, trace the right course of regulation. And authorities should allow the market to prosper and benefit its consumers. We understand that this is a balancing act.
The WFE claims that the exchanges are well equipped to protect consumers’ trading on their platforms. In July of this year, the FCA proposed a ban on cryptocurrency derivatives and exchange-traded notes to retail investors. Noting that these products were not suitable for these investors due to their “extreme volatility.”
While the WFE has said that it has recognized their volatility and claims that “guaranteeing adequate consumer protection.” But WFE argues that banning cryptocurrency derivatives is not the right move. The FCA is set to announce the final rule changes next year. And if it goes ahead with a ban, the WFE has requested a review after some time.
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