Featured Product

    FCA Proposes Ban on Sale of Crypto-Derivatives to Retail Consumers

    July 03, 2019

    FCA is proposing rules to address harm to retail consumers from the sale of derivatives and exchange-traded notes referencing certain types of crypto-assets. The consultation proposes to ban the sale, marketing, and distribution to all retail consumers of all derivatives (that is, contract for difference, options, and futures) and exchange-traded notes that reference unregulated transferable crypto-assets by firms acting in, or from, the UK. This consultation fulfills the FCA commitment in the UK Cryptoasset Taskforce Final Report to explore a potential ban. The consultation period ends on October 03, 2019. In case FCA decides to proceed with the final rules, it intends to publish a final policy statement and Handbook rules in early 2020.

    FCA considers these products are ill-suited to retail consumers that cannot reliably assess the value and risks of derivatives or exchange-traded notes that reference certain crypto-assets (crypto-derivatives). This is due to the:

    • Inherent nature of the underlying assets, which have no reliable basis for valuation
    • Prevalence of market abuse and financial crime in the secondary market for crypto-assets (for example, cyber theft)
    • Extreme volatility in crypto-asset prices movements
    • Inadequate understanding by retail consumers of crypto-assets and the lack of a clear investment need for investment products referencing them

    These features mean retail consumers might suffer harm from sudden and unexpected losses if they invest in these products. In January 2019, FCA also consulted on a guidance on crypto-assets (CP19/3) to clarify what types of crypto-assets fall within the current regulatory perimeter; the consultation closed on April 05, 2019. FCA expects to publish the final guidance on crypto-assets later in the summer and has reflected feedback to that consultation in the proposals for crypto-derivatives. This consultation will be relevant for firms issuing or creating products referencing crypto-assets; firms distributing products referencing crypto-assets, including brokers and investment platforms, and financial advisers; firms marketing products referencing crypto-assets; operators of trading venues and platforms; and retail consumers and consumer organizations

     

    Related Links

    Comment Due Date: October 03, 2019

    Keywords: Europe, UK, Banking, Securities, Crypto-Assets, Crypto-Derivatives, Exchanged-Traded Notes, FCA

    Related Articles
    News

    EBA Finalizes Remuneration Standards for Investment Firms in EU

    EBA finalized the two sets of draft regulatory technical standards on the identification of material risk-takers and on the classes of instruments used for remuneration under the Investment Firms Directive (IFD).

    January 21, 2021 WebPage Regulatory News
    News

    ECA Recommends Actions to Enhance Resolution Planning for Banks

    EC published, in the Official Journal of the European Union, a notification that the European Court of Auditors (ECA) has published a special report on resolution planning in the Single Resolution Mechanism.

    January 20, 2021 WebPage Regulatory News
    News

    BoE Publishes Key Elements of the 2021 Stress Testing for Banks in UK

    BoE published a scenario against which it will be stress testing banks in 2021, in addition to setting out the key elements of the 2021 stress test, guidance on the 2021 stress test, and the variable paths for the 2021 stress test.

    January 20, 2021 WebPage Regulatory News
    News

    PRA Proposes Rules on Identity Verification of Depositor Protection

    PRA published a consultation paper (CP3/21) proposes rules regarding the timing of identity verification required for eligibility of depositor protection under the Financial Services Compensation Scheme (FSCS).

    January 20, 2021 WebPage Regulatory News
    News

    FSB Publishes Work Program for 2021

    FSB published the work program for 2021, which reflects a strategic shift in priorities in the COVID-19 environment.

    January 20, 2021 WebPage Regulatory News
    News

    FCA Issues Update on Move to New Data Collection Platform

    FCA announced that 50% firms have started using the new data collection platform RegData, which is slated to replace the existing platform known Gabriel.

    January 20, 2021 WebPage Regulatory News
    News

    Bundesbank Publishes Derivation Rules for Reporting by Banks

    Bundesbank published Version 5.0 of the derivation rules for completeness check at the form level, with respect to the data quality of the European harmonized reporting system.

    January 19, 2021 WebPage Regulatory News
    News

    FED Revises Capital Planning and Stress Testing Requirements for Banks

    FED finalized a rule that updates capital planning requirements to reflect the new framework from 2019 that sorts large banks into categories, with requirements that are tailored to the risks of each category.

    January 19, 2021 WebPage Regulatory News
    News

    ECB Releases Results of Bank Lending Survey for Fourth Quarter of 2020

    ECB published results of the quarterly lending survey conducted on 143 banks in the euro area.

    January 19, 2021 WebPage Regulatory News
    News

    ESAs Publish Reporting Templates for Financial Conglomerates

    ESAs published the final draft implementing technical standards on reporting of intra-group transactions and risk concentration of financial conglomerates subject to the supplementary supervision in EU.

    January 18, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6484