UK online trading leader IG Group Holdings plc (LON:IGG) issued a brief response to this morning’s new directives from the FCA, banning bonus payments to retail traders and limiting CFD trading leverage to 50x.
The response was issued after IG shares, and those of its main publicly traded competitors including CMC Markets Plc (LON:CMCX) and Plus500 Ltd (LON:PLUS), tumbled by about 30% following the FCA’s announcement.
While stopping short of saying that the new rules won’t really harm its business, IG did mention that its initial view is that ‘certain of the FCA proposals could enhance client outcomes‘.
IG also pointed out that the FCA’s proposals do not appear to directly apply to firms operating from outside the UK offering CFDs and binaries to clients in the UK from another EU member state, allowed under EU MiFID passport rules.
The IG press release on the matter reads as follow:
06 December 2016
IG GROUP HOLDINGS PLC
Response to FCA Consultation Paper
IG Group (“IG”, “the Company”), a global leader in online trading, notes today’s Consultation Paper issued by the FCA (CP 16/40 – Enhancing conduct of business rules for firms providing contract for difference products to retail clients).
IG firmly believes in robust and proportionate regulatory oversight of the CFD sector in the UK and Europe. The Company recognises that there are shortcomings in the approach to the marketing of CFDs and binaries by certain firms, often operating from outside the UK. The Company has operated and will continue to operate to the highest standards in the industry, and its initial view is that certain of the FCA proposals could enhance client outcomes.
The Company notes, however, that the FCA’s proposals do not appear to directly apply to firms operating from outside the UK offering CFDs and binaries to clients in the UK on a cross-border services passport from another EU member state.
IG will carefully consider the implications of the FCA Consultation Paper and the courses of action open to it, and will respond in accordance with the timeline provided of 7 March 2017.