The UK Financial Conduct Authority (FCA) has proposed permanent ban on binary options, 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 suggestingto 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;
The CFD broker has to pick up the bill. Interactive Brokers has increased CFD interest as a consequence.
No surprise FCA want to keep the ESMA constraints, no argument from their point of view for relaxing them. Glad to be hearing about it before it happens though.
I've been using spreadbetting accounts since 2003 (I'm in the UK), SB is counted as a CFD by ESMA. I haven't found any impact on my long-term trading using SB since the ESMA measures came in. Alright, the account was already much larger than most SB punters' and perhaps costs have risen but the strategy is totally unaffected.
Tomorton....just register as a Professional trader. I've done that on some of my accts, still enjoy 200 to 1 leverage etc.