On 1 August 2018, the FCA published a statement in which it fully supports the temporary measures introduced by the European Securities and Markets Authority (ESMA) which restrict the sale, marketing and distribution of contracts for difference (CFDs) to retail clients.

The FCA also states that it is concerned that firms may consider getting round ESMA’s measures by selling other similarly complex products to retail clients. The FCA reminds firms that ESMA has made it clear in its Q&As that firms “should pay particular attention to the leverage made available to retail clients and consider whether the product is offered on terms that act in the best interests of the client” for products that have comparable features such as Turbo Certificates.

Whilst noting that ESMA’s intervention is focused on CFDs, the FCA also reminds firms of their existing obligations. In particular, if a firm is considering marketing, selling or distributing alternative products, it should pay particular attention to conduct of business requirements