Ireland Look to Ban Leveraged Forex and CFD Trading for Retail Clients 17/2

6th March 2017

The Central Bank of Ireland (CBI) has published a consultation paper on the distribution of CFDs.

The full paper can be found here.

The paper focuses on two main areas that the CBI are considering:

  • The prohibition of the sale or distribution of CFDs to retail clients
  • The enhancement of investor protection through leverage limitation and the implementation of negative balance protection

The decision by the CBI is centred around the idea that retail clients are simply not adequately aware of the risks associated with speculative trading. The CBI study found that between 2015-2016, 74% of retail clients lost money with an average loss of €2,700. Given these alarming figures, the regulator has concluded that high risk speculative trading does not suit the lower risk appetite that retail clients typically have.

With the Irish watchdog becoming the latest regulator to clampdown on CFD activity for retails, the domino effect kick-started by Belgium’s total ban on leveraged products continues.

The CBI will be taking feedback from all interested parties until May 29, 2017.

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