August 1, 2018 / 6:12 AM / 3 months ago

BRIEF-Britain's financial watchdog issues warning on CFDs

Aug 1 (Reuters) -

* FCA STATEMENT ON SELLING HIGH-RISK SPECULATIVE INVESTMENTS TO RETAIL CLIENTS FOLLOWING ESMA’S ACTION ON CFD PRODUCTS

* IN JUNE 2018, EUROPEAN SECURITIES AND MARKETS AUTHORITY (ESMA) FINALISED TEMPORARY MEASURES TO RESTRICT SALE, MARKETING AND DISTRIBUTION OF CONTRACTS FOR DIFFERENCE (CFDS) TO RETAIL CLIENTS. THESE MEASURES APPLY ACROSS EU FROM TODAY.

* WE ARE CONCERNED THAT FIRMS MAY CONSIDER GETTING AROUND ESMA’S MEASURES BY SELLING OTHER SIMILARLY COMPLEX PRODUCTS TO RETAIL CLIENTS.

* WE WILL THEREFORE WORK WITH ESMA AND OTHER EUROPEAN REGULATORS TO MONITOR AND ASSESS SALE OF THESE ALTERNATIVE, SPECULATIVE PRODUCTS TO RETAIL CLIENTS. IF WE HAVE EVIDENCE THAT THESE PRODUCTS ARE CAUSING SIMILAR HARMS, WE WILL WORK WITH ESMA AND WILL, IF NECESSARY, SUPPORT FURTHER ACTION TO EXTEND SCOPE OF ITS INTERVENTION.

* ESMA’S INTERVENTION IS FOCUSED ON CFDS, BUT WE REMIND FIRMS OF THEIR EXISTING OBLIGATIONS. IN PARTICULAR, IF A FIRM IS CONSIDERING MARKETING, SELLING OR DISTRIBUTING ALTERNATIVE PRODUCTS, IT SHOULD PAY ATTENTION TO CONDUCT OF BUSINESS REQUIREMENTS Source text for Eikon: Further company coverage: [ ] (Reporting By Sinead Cruise)

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