Sarah Pritchard, Executive director of Markets at FCA stated:
CFD firms must adhere to certain standards in order to protect customers and maintain market integrity. CFD providers that are authorized under this regime must sell their products properly. When the new consumer duty takes effect, they will have to make sure that products provide good outcomes for consumers. We will not hesitate in taking swift and firm action if we find harm.
FCA found that many firms offering services from abroad are often associated with poor practices. Many of these companies use fake endorsements from celebrities, aggressive sales strategies and investment advice that is not authorized. Many of these companies try to pressure customers into investing large amounts of cash using pressure tactics.
The FCA expects all the companies that received the letter to address the concerns raised by it by January 2023.
Earlier in November, the UK financial markets regulator, issued warning against the “gamification” of trading apps, expressing its growing concern that online business can use the design of trading applications to manipulate consumers in new ways.
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