In early 2019, information from one of Britain’s most prominent regulatory agencies showed that new rules would not be out until later in the year.
The Financial Conduct Authority declared recently that it is pending the publishing of the conclusive guidelines that will apply to retail traders and their transactions. In the last quarter of 2018, the FCA said that there was the possibility to ensure that the European Securities and Markets Authority (ESMA) package directives remain in place forever.
Brought on board just middle of last year, the laws have clamped down on binary options and limited the leverage that can be provided to retail traders engaging in contracts for various (CFDs) and foreign exchange.
As it is now, these directives are not permanent and have to be renewed every quarter. This is a practice that the EMSA has remained dedicated to since they were first rolled out about 12 months ago. Therefore, in other to ensure that the rules stay in position on a permanent basis, the British regulator said it is going to incorporate them into the law books of Britain. This is not a surprise as regulatory agencies in other countries in Europe are also either following suit or have even included it in their laws already. The most visible examples in this regard are France, Germany, and the Netherlands.
The rule that the FCA wants to add to the British law books seems to be virtually the same as that of the ESMA. But one distinction is that the British regulator stated that its own plans will ensure that it has room for products that are like the CFDs. What this means is that turbo contracts will also be covered in the new laws.
Following the notice in December, the FCA released another one earlier this year saying the release of new rules will be delayed by months. Analysts say this may be due to the Brexit crisis in which talks have now been shifted until October but whatever the reason behind the postponement may be, the FCA said it will reveal its new regulatory directives in a matter of months. FCA said that as it is still digesting the responses from stakeholders and the short-timed restrictions of the ESMA on businesses that have already been cleared by the FCA, it will continue with its plans to release what was called a ‘Policy State and Handbook Rules’ in the summer of 2019.
The agency also declared that their conclusive directives for the CFDs will come into force from the expiration of the ESMAs. Even if this does not seem like a convincing possibility, it is a light that signifies that the entire sector is headed in the right direction and players in the foreign exchange market can hope for the very best. This is because once the Brexit negotiations are over, the new frameworks in place will be massive boosts to retail trading firms. While confirming this, FCA’s chief executive officer, Andrew Bailey, stated that on their own, the Brits will eventually have their own regulatory system sharing no similarities with that of the European Union.