The FCA considers banning binary options and restricting CFDs | Forex Factory

Options

Permalinks
Print Thread

Similar Threads

Multi Time Frame Analysis for Spot and Binary Options 457 replies

Rekon Xs and Market Scanner for Spot and Binary Options 442 replies

FCA Banning brokers! 14 replies

FCA imposes bonus ban and leverage cap for CFDs 132 replies

Binary options trading and UK taxes 3 replies

Attachments: The FCA considers banning binary options and restricting CFDs
Exit Attachments

The FCA considers banning binary options and restricting CFDs

  • #1
  • First Post: Dec 7, 2018 5:54am Dec 7, 2018 5:54am
The UK Financial Conduct Authority (FCA) has proposed a permanent ban on binary options (https://www.forexbrokerz.com/news/FCA-considers-banning-binary-options-and-restricting-CFD-trading-permanently), as well as permanent restriction on the sale, marketing and distribution of contracts for difference (CFDs) and similar products to retail investors.

In fact, the FCA is suggesting to make the measures introduced by the European Securities and Markets Authority (ESMA) permanent in the UK. More specifically, the FCA is proposing that forex brokers must apply the following measures regarding the Contracts-for-Difference (CFDs) sold to retail clients:

-leverage limitation of 1:2 to 1:30 by collecting minimum margin as a percentage of the overall exposure that the CFD provides;
-closing out a customer’s position when their funds fall to 50% of the margin needed to maintain their open positions on their CFD account;
-providing negative balance protection;
-stop offering monetary and non-monetary inducements to encourage trading, such as bonuses;
-provide a standardized risk warning, which requires firms to tell potential customers the percentage of their retail client accounts that make losses;
  • #2
  • Dec 7, 2018 8:42am Dec 7, 2018 8:42am
"but less leverage its good because *insert random noob opinion and logic here* "

Enjoy getting shafted !!! on second thoughts I guess its an european thing.. Enjoy an every day more restrictive kind of life =)
  • #3
  • Dec 7, 2018 9:07am Dec 7, 2018 9:07am
It's more like lower leverage is good because most retail investors lose money. Lower leverage = lose money at a slower rate.

But this is just tickering around the edges. What I like to see is better oversight over the brokers themselves, with appropriate punishment for scam brokers that cheat their clients.
  • #4
  • Dec 7, 2018 5:46pm Dec 7, 2018 5:46pm
Just open an account with an Australian broker, will bypass all this and you can keep using solid margin rates. The ESMA regulations that came into existence in August this year was an extreme hindrance to my trading. I dont like being told what I can or cant do with my money. If you trade real money its your responsibility to understand exactly whats happening and what the risks are. If you dont understand you should NOT be trading. In the same way that if you dont understand the nature of running a business you should NOT be running a business.
Nothing in life is to be feared, it is only to be understood.
  • #5
  • Dec 7, 2018 7:10pm Dec 7, 2018 7:10pm
Quoting mlawson71
The UK Financial Conduct Authority (FCA) has proposed a permanent ban on binary options (https://www.forexbrokerz.com/news/FCA-considers-banning-binary-options-and-restricting-CFD-trading-permanently), as well as permanent restriction on the sale, marketing and distribution of contracts for difference (CFDs) and similar products to retail investors. In fact, the FCA is suggesting to make the measures introduced by the European Securities and Markets Authority (ESMA) permanent in the UK. More specifically, the FCA is proposing that forex...
I personally think this is a very sensible and appropriate ruling to protect retail traders but at the same time I am also aware that 95% of all traders and 100% of all brokers will strongly disagree with my view and will flame me for that.
Hehe.

Cheers
  • #6
  • Dec 7, 2018 8:55pm Dec 7, 2018 8:55pm
Quoting genghistar
I personally think this is a very sensible and appropriate ruling to protect retail traders
Attached Image
  • #7
  • Dec 9, 2018 2:44am Dec 9, 2018 2:44am
Quoting matthew89
Just open an account with an Australian broker, will bypass all this and you can keep using solid margin rates. The ESMA regulations that came into existence in August this year was an extreme hindrance to my trading. I dont like being told what I can or cant do with my money. If you trade real money its your responsibility to understand exactly whats happening and what the risks are. If you dont understand you should NOT be trading. In the same way that if you dont understand the nature of running a business you should NOT be running a business....
definitely not a smart move to open an account with an Australian broker. you might never see your money again. Halifax in administration recently and

clients waiting if they get anything back.
at least in EU your money is safe.
  • #8
  • Dec 9, 2018 3:20am Dec 9, 2018 3:20am
You are right mate, if someone has money and stupid enough watching loosing money all the time, he or she should not be trading anymore. These ESMA regulation is hindering more to harworking traders spend energy analysing markets and don't have big money to invest. Me too have also opted for an Australian broker.Not sure how many days it will go!!
Quoting matthew89
Just open an account with an Australian broker, will bypass all this and you can keep using solid margin rates. The ESMA regulations that came into existence in August this year was an extreme hindrance to my trading. I dont like being told what I can or cant do with my money. If you trade real money its your responsibility to understand exactly whats happening and what the risks are. If you dont understand you should NOT be trading. In the same way that if you dont understand the nature of running a business you should NOT be running a business....
  • #9
  • Edited Dec 10, 2018 5:20am Dec 9, 2018 1:55pm | Edited Dec 10, 2018 5:20am
bla bla bla
  • #10
  • Edited 4:11pm Dec 9, 2018 3:48pm | Edited 4:11pm
Quoting yonnie
{quote} definitely not a smart move to open an account with an Australian broker. you might never see your money again. Halifax in administration recently and clients waiting if they get anything back. at least in EU your money is safe.
Yes, that is admittedly a bit concerning. I feel bad for all the Halifax clients who have their accounts frozen. Im currently with FP Markets (https://www.fpmarkets.com/), I try to keep as clued up as I can about my brokers financial status. As much as I can anyway. As far as I can tell FP Markets dont look likely to go into administration, Im prepared to take this risk since the ESMA regulations in the EU were so harsh and damaging to me personally as a trader with a relatively small account.

p.s FP Markets do actually hold all client funds in a trust with a tier 1 Australian bank, and these funds are segregated from the FP markets operating funds. I have had confirmation that if FP went into administration you can still withdraw your funds from this segregated account according to the ASIC regulations.
Nothing in life is to be feared, it is only to be understood.
  • #11
  • Dec 9, 2018 6:08pm Dec 9, 2018 6:08pm
Halifax clients money was also segregated in a trust with a tier 1 Australian bank.
segregation of clients money means nothing if the broker can still access the funds and use it for other purposes.

I thought ASIC toughened the rules around use of clients funds a year ago and even ordered brokers to have insurance. strange that there is not even a criminal investigation to hold the main players in Halifax accountable.

If a trader`s account is small, a loss might not be the end of the world. for the professional trader however not being able to trade at all is a disaster. loss of income for months on end until a part of his/her funds will be refunded; maybe lose all the funds as well.
maybe you can see why the safety of my funds is paramount to me: I only chose a broker with a government backed insurance scheme.
  • #12
  • Dec 10, 2018 3:50am Dec 10, 2018 3:50am
Quoting yonnie
Halifax clients money was also segregated in a trust with a tier 1 Australian bank. segregation of clients money means nothing if the broker can still access the funds and use it for other purposes. I thought ASIC toughened the rules around use of clients funds a year ago and even ordered brokers to have insurance. strange that there is not even a criminal investigation to hold the main players in Halifax accountable. If a trader`s account is small, a loss might not be the end of the world. for the professional trader however not being able to trade...
What broker do you use if you dont mind me asking?
Nothing in life is to be feared, it is only to be understood.
  • #13
  • Last Post: Dec 11, 2018 12:41pm Dec 11, 2018 12:41pm
hi Matthew, am with a broker in your country Activtrades for the 50k government protection scheme. they have good spreads and more importantly I trade the Nasdaq index long-term and they don't charge any overnight fees.
0 traders viewing now