UK’s FCA tightens rules in 2014 for Introducing Brokers


All IB and affiliate material will need to pass more strict tests

LeapRate Exclusive…. Have you ever wondered how long would it take for regulators to target a certain aspect of your business? Well, the ever growing affiliate and IB industry has just bumped into a set of regulatory scrutiny. Consequences for IB’s conducting their business under the FCA’s jurisdiction are immediate. Since the beginning of January 2014 the regulator is mandating brokerages to approve their IB’s and affiliate’s websites on a case by case basis.

The brokerages are no longer allowed to promote through search engines, social networks, ad networks, email, etc. The flow of traffic to the company’s homepage has to come from websites that are explicitly approved by it, the rest will have to be blocked.

Every Introducing Broker and affiliate will have to comply with a set of rules in order to pass the approval process.

          A risk warning becomes mandatory and it has to explicitly state that the client’s capital is at risk

          If the company is not engaged in physical delivery of assets, the company’s will have to make clear informing their readers that a CFD service is in place

          No bonus can be referred to as “free”, it can however be a “sign-up” or a “welcome” bonus

          Any words that can imply profits from trading are forbidden from use, as generally there is not much long-term investment going on when clients use CFD’s

          Any references to the UK regulators have to explicitly mention that the brokerage in question is regulated under the Financial Conduct Authority (the abbreviation FCA will not suffice)

          A clarification that the services of the brokerage in question are suitable for experienced traders and not beginners is a must

Since the process is time consuming and all affiliates and IB’s will have to go through it the next couple of weeks there will be a period of accommodation to the new rules and regulations by the Financial Conduct Authority.

Stay tuned to LeapRate to find out more about the global regulatory environment surrounding the ever-expanding and changing forex industry.

For more on the global Forex industry see the LeapRate-Dow Jones Forex Industry Report.

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UK's FCA tightens rules in 2014 for Introducing Brokers

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