The FCA (Financial Conduct Authority) has made no secret of its concerns about binary options and CFD (contracts for difference) trading.  It has now moved to restrict the marketing and sale of these products in the retail market.  This follows ESMA's (European Securities and Markets Authority) action in August to preventing the sale of CFDs to retail customers.

The new rules the FCA has announced closely follow those of ESMA.  The executive director of strategy and competition at the FCA, Christopher Woolard, said: "We remain very concerned about the harm to retail consumers that's being caused by the design and distribution of some complex derivative products".  The FCA believes that the new measures will save UK clients approximately £17 million per year.  It is the intention to make the new rules permanent

CFD and binary options, the financial instruments the FCA and ESMA seek to restrict, allow brokers' clients to speculate on how the market will move, up or down.  The new restrictions are aimed at protecting the public who have little or no knowledge of the markets and compel these products to only be sold to those who have a proper understanding of the markets and the risks trading these types of products pose.  It is hoped that the new rules will prevent some of the appalling stories that have emerged of individuals being encouraged to take risks they do not fully understand resulting in the loss of all their money and putting them in a desperate position.

Giambrone's finance and banking department works tirelessly to deal with the consequences of unscrupulous brokers who circumvent the rules to entice the unwary and unknowledgeable retail clients to take wholly unacceptable risks with these types of products.  FCA has made several attempts to improve the conduct of City firms and is considering taking a further step with other equally precarious products.

Giambrone has, for some time, campaigned and lobbied various regulatory bodies in an attempt to bring the rogue brokers under control or at least limit their ability for harm.  The FCA measures are a step in the right direction but it must not be forgotten that the fraudulent brokers will simply look for another financial area that they can exploit.

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