What is the most important part of the new regulations of the FCA
The effect of leverage is not the most important part of the new regulations of the FCA
Brokers uk are anxiously waiting for the final verdict from the FCA on new rules and regulations of the trading industry in detail.
There are about 6 months, the authority to conduct financial of the United Kingdom (FCA) has announced that it intends to make substantial changes in its regulatory framework for brokers in the United Kingdom. Brokers uk have eagerly awaited the final verdict of the FCA’s new rules, which included initially the ceilings of the leverage and a ban on bonuses.
The changes to the leverage effect are they of no importance ?
Brokers are no doubt more concerned about other regulatory changes by reducing leverage.
For example, after the global financial crisis, Japan has limited leverage to 1:25. However, the brokers japanese always report the volumes of trading of the highest in the industry.
It took some time for the industry to realize that even if these changes are enacted, they will signify not the end of the world. The industry, therefore, focuses rather on what the FCA could do to prevent customers little sophisticated to open accounts.
A spokesman for the non-profit organization based in London, UK CFD Trading & Compliance Forum, said : “leverage is an important aspect of the product focused on the retail trading has exploded in popularity since the advent of online trading. That said, the major problems for the brokers are the rules relating to the administration of clients, individuals who would not be considered appropriate candidates for treating derivatives at high risk are quickly lined up on the trading without having the knowledge and understanding of the intricacies of the product.”
As the FCA is planning to introduce new rules this year, perhaps as early as the end of this month, the procedure for acceptance of customers takes the front of the stage to the dealers in the uk. The FCA may require the customers to assume some of the documents and / or send e-mails specific to brokers so that they understand the risks associated with trading on margin.
The spokesperson of CFD Trading & Compliance Forum, continued : “The regulators have begun the review process in 2007 in the framework of the MiFID directive and have introduced the rules of good conduct. More recently, the ESMA and the FCA have begun to accelerate oversight of this particular aspect, we’ve even seen companies do in the face of article 166, on the basis of relevance. Companies must find a clear balance between the written word (COBS 10.3.1 R), which states that a disclaimer is sufficient to accept a client are deemed inappropriate by the Principle 6 of the customer Interests. The forum and its members welcome the changes fair and in the public interest.”