On 6 December 2016, the FCA published a Consultation Paper (CP16/40
), which outlined concerns about the increasing evidence of poor conduct of firms providing CFD products to retail clients and the increased risks to investor protection. Many of the ideas raised by the FCA in this paper could have significant and wide-sweeping effect on the future size and shape of the CFD market and the way you do business.
Moore Stephens LLP and Ashurst LLP held an interactive roundtable discussion with a fantastic attendance from market participants. This discussion allowed CFD providers the chance to debate key themes from the paper and share thoughts and concerns with peers. Using audience voting keypads we were able to poll thoughts across the key issues and demonstrate the prevailing thinking within the market.
Of the audience polled, some of the most interesting insights included:
- over 95% are considering responding to the Consultation Paper;
- only 10% considered the key proposals put forward by the regulator to be a fait accompli while the rest were hopeful, or sure, that rowbacks in some areas would be considered;
- 90% of respondents felt that a revised retail client categorisation would have a significant impact of some kind on their business;
- only a third of respondents were confident that their current systems are capable of differentiating between the leverage limits for experienced and inexperienced clients; and
- two thirds are now considering setting up a new entity in Europe.
Moore Stephens are considered at the forefront of the CFD industry and provide accounting, regulatory and advisory assistance to a number of firms in this space. Should you wish to discuss your own thoughts on the Consultation Paper or how the proposed changes affect you, we are able to advise you on the best plan of action to be prepared for the new requirement.