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The UK plans to ban the CFD trade
Is the end of CFD instruments coming? There are many indications that it is - at least in Britain. The British financial supervision, FCA, published a report in which it presents the conclusions of a 2-year research on the contract for exchange rate market. The conclusions may shock - FCA wants to temporarily restrict access to these instruments. But he does not plan to stop there.
The total prohibition of CFD
The local financial supervision indicates in its announcement that after 2 years of observing the CFD market, it initially considers limiting their sale and prohibiting marketing, which is to increase the protection of retail investors. It is also highly probable that a ban on offering binary options will be introduced - permanently and permanently. Then, instruments based on cryptocurrencies will be in the crosshairs.
According to the calculations of the British supervisory authority, losses of retail customers after the changes are to be reduced in the amount from GBP 267,4 million to GBP 450,7 million per annum. Excluding binary instruments from trading is to prevent, according to the regulator's estimates, losses of individual investors amounting to 16 million GBP per year.
The FCA also indicates that the risk related to the operation of non-regulated entities offering binary and CFD instruments is still high.
The Binary Options Consultation Paper is open until February 7, 2019. The CFD Consultation Paper is open until February 7, 2019 for feedback on the proposed remedies, and by March 7, 2019 for feedback on discussions on about other advanced derivatives.
The end of the Forex market?
One can get the impression that regulators from all over Europe will take over the Forex industry and start introducing slow strategy of its annihilation. Gradually introduced restrictions, in Poland, France and Belgium, then in Germany and the United Kingdom, and then throughout the whole area of the community by ESMA, may herald the beginning of the end. Was this a plan from the very beginning? It is not known. It is also not known if such a black scenario has a chance to be implemented.
The fact is that the statistics of retail investors have not been favorable since the beginning of this market. But could it be otherwise? There are still a few unknowns. First of all, Brexit - what will happen to brokers when it comes (and under what conditions). There are some powerful players listed on the London Stock Exchange in the UK market, such as CMC Markets, Plus 500 or IG Group. Is it time to play for a short time?
