UK watchdog proposes tougher rules on CFDs
Leverage limit of 25 times for inexperienced retail clients and a cap of 50 times for all clients are among the suggestions
The UK's Financial Conduct Authority (FCA) has outlined a series of proposals for the contracts for difference (CFD) provider space, including the possibility of limiting the amount of leverage clients can take on, as it fears the product is not adequately understood by investors.
The move comes after the proliferation of providers in the retail space sparked concerns. According to analysis carried out by the FCA, 82% of clients have lost money on CFD products.
"The FCA is therefore proposing a
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