On 6 December 2016, the FCA published a consultation paper containing proposals to enhance the conduct of business rules for firms providing contract for difference (CFD) products (including spread betting and rolling spot FX contracts) to retail clients. The FCA has asked for comments by 7 March 2017, and aims to publish final rules next Spring with a view to them coming into force shortly afterwards.

Authors: David Calligan

The proposed package of measures is designed to address long-standing concerns about the risks that CFDs pose to less sophisticated consumers. While the general move to tighten regulation in this area will come as no surprise to market participants, the FCA's proposals include measures that could have significant practical implications for firms and their business models, and therefore warrant careful examination.