U.K. FCA Raises Concerns Over Firms Trading Unlisted Derivatives
- Regulator reviewed 10 firms offering contracts for difference
- Agency is concerned clients not made fully aware of risks
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The U.K. Financial Conduct Authority raised concerns that firms offering contracts for difference -- a type of unlisted derivative products-- aren’t doing enough to scrutinize their clients or inform them of the trading risks.
In an open letter to chief executive officers of firms dealing in CFDs published Tuesday, the FCA said a review of the industry showed firms weren’t adequately assessing their clients’ levels of experience or knowledge of trading in financial markets, or doing enough to prevent financial crime. The regulator looked at ten small and large CFD providers in its investigation.