Spreadbetters welcome BaFin proposals, say no changes will be needed

9th Dec 2016 07:40

(ShareCast News) - It was another down day for UK spreadbetters on Thursday as BaFin revealed plans to clampdown on contracts-for-difference trading, hot on the heels of the Financial Conduct Authority's announcement just two days before.On Friday, UK spreadbetters reacted to the announcement, saying there would be no changes required to comply with BaFin's new rules as they have already been implemented.Under the new proposals, CfD providers would need to ensure retail clients cannot lose more money than is deposited in their account.CMC Markets said this functionality was already available to its clients in Germany and on the basis of the consultation paper, there are no other requirements from BaFin including no leverage limits, and where retail clients' risk is limited to their deposits, there is no prohibition on marketing, distribution and sale of CfDs."We welcome this balanced approach from BaFin and will respond to the consultation in accordance with the proposed timeline of 20 January 2017," the group said.Meanwhile, IG Group said the proposal was consistent with its recent introduction of Limited Risk Accounts, which guarantee that a client cannot incur losses in excess of the amount deposited in their account."IG firmly believes in robust and proportionate regulatory oversight of the CfD sector in all the markets in which it operates. The company has operated and will continue to operate to the highest standards in the industry."Plus500, which provides online services for customers to trade CfDs, said it welcomed the announcement by BaFin as all accounts offered by the company have always had balance protection, meaning the client cannot lose more than the value of their account."The company therefore believes that any limitations imposed by BaFin in this respect will have no effect on its business."