Only 61% of CFDs Brokers Will Fully Comply with UK’s Consumer Duty by Deadline

Monday, 03/07/2023 | 04:38 GMT by Arnab Shome
  • The FCA questioned 44 CFD brokers to know the industry’s position.
  • 100% of CFD brokers know the requirements and understand how they will be applied.
United kingdom, london

Since the deadline of 31 July for meeting the requirements of the UK’s Consumer Duty for products and services open for sale and renewal is approaching, only 61% of the contracts for differences (CFD) providers will fully comply with all the requirements. Overall, 91% of CFD providers believe they will meet all or most of the requirements. The figure is higher than the average of 86% when considering all other sectors.

The UK’s Financial Conduct Authority (FCA ) has included 44 CFD brokers in the survey to understand how prepared the industry is for Consumer Duty requirements. In total, 1,230 companies across 17 sectors participated.

The CFD Industry Is Partly Prepared for Consumer Duty Rules

The report published by the FCA further detailed that 30% of CFD providers will meet most of the Consumer Duty requirements by the deadline. Another 2%of the companies believe they will comply with some requirements but will “have much work to do.” The Consumer Duty requirements do not apply to the remaining 7%.

CFDs industry consumer duty
Source: FCA

Under the upcoming Consumer Duty requirements, companies must provide customers with products and services that meet their needs and offer fair value. Further, costumes must receive easy-to-understand communication and should get customer support when needed. These rules will be applied to products and services provided to retail and business-to-consumer customers.

Strong Awareness

Interestingly, the tightly-regulated CFD industry is highly aware of the Consumer Duty requirements, as 100% of the companies questioned by the regulator know the requirements and understand how they will be applied to their organization.

According to the report published by the FCA, 30% of the CFD industry participants ‘strongly agree’ that the long-term benefits of Consumer Duty will outweigh the short-term costs to their organization. Another 14 percent ‘tend to agree with this question, while 39 percent neither agree nor disagree. Seven percent of the CFD industry participants ‘tend to disagree’, five percent ‘strongly disagree’, and the remaining seven percent ‘don’t know’ about the long-term benefits over the short-term costs.

Furthermore, 91% of the CFD industry participants have adequate expertise to implement the Consumer Duty by the end of deadline in July, while 84% have sufficient resources.

CFDs consumer survey
Source: FCA

Since the deadline of 31 July for meeting the requirements of the UK’s Consumer Duty for products and services open for sale and renewal is approaching, only 61% of the contracts for differences (CFD) providers will fully comply with all the requirements. Overall, 91% of CFD providers believe they will meet all or most of the requirements. The figure is higher than the average of 86% when considering all other sectors.

The UK’s Financial Conduct Authority (FCA ) has included 44 CFD brokers in the survey to understand how prepared the industry is for Consumer Duty requirements. In total, 1,230 companies across 17 sectors participated.

The CFD Industry Is Partly Prepared for Consumer Duty Rules

The report published by the FCA further detailed that 30% of CFD providers will meet most of the Consumer Duty requirements by the deadline. Another 2%of the companies believe they will comply with some requirements but will “have much work to do.” The Consumer Duty requirements do not apply to the remaining 7%.

CFDs industry consumer duty
Source: FCA

Under the upcoming Consumer Duty requirements, companies must provide customers with products and services that meet their needs and offer fair value. Further, costumes must receive easy-to-understand communication and should get customer support when needed. These rules will be applied to products and services provided to retail and business-to-consumer customers.

Strong Awareness

Interestingly, the tightly-regulated CFD industry is highly aware of the Consumer Duty requirements, as 100% of the companies questioned by the regulator know the requirements and understand how they will be applied to their organization.

According to the report published by the FCA, 30% of the CFD industry participants ‘strongly agree’ that the long-term benefits of Consumer Duty will outweigh the short-term costs to their organization. Another 14 percent ‘tend to agree with this question, while 39 percent neither agree nor disagree. Seven percent of the CFD industry participants ‘tend to disagree’, five percent ‘strongly disagree’, and the remaining seven percent ‘don’t know’ about the long-term benefits over the short-term costs.

Furthermore, 91% of the CFD industry participants have adequate expertise to implement the Consumer Duty by the end of deadline in July, while 84% have sufficient resources.

CFDs consumer survey
Source: FCA
About the Author: Arnab Shome
Arnab Shome
  • 6628 Articles
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About the Author: Arnab Shome
Arnab is an electronics engineer-turned-financial editor. He entered the industry covering the cryptocurrency market for Finance Magnates and later expanded his reach to forex as well. He is passionate about the changing regulatory landscape on financial markets and keenly follows the disruptions in the industry with new-age technologies.
  • 6628 Articles
  • 99 Followers

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