Currency trading firm FxPro shelves float
The Financial Conduct Authority (FCA) revelations last year that it intends to clamp down on the level of financial risk that retail investors can take when using spread betting services continued to impact the spread betting industry this week with the announcement by currency trading firm FxPro that it has indefinitely shelved its planned IPO flotation in London, and has advised proposed directors that it is to remain a private company.
Reports from London are that among those directors is Owen O'Donnell, a director of the gaming group Rank, however Richard Kilsby, a former director of the online gambling group 888 who joined FxPro as its chairman last year, will remain in that role.
Sources told reporters that the IPO has been shelved until the regulatory regime has more clarity. Media reports indicate that FxPro is based in Cyprus but has many thousands of UK customers who use its range of financial products, which include spread betting.
The reports note that other large spread betting firms like CMC are currently assessing whether it should transfer contracts-for-difference and other elements of its business away from the UK, probably to Germany – with a consequent loss of jobs. The company is said to be awaiting the conclusion of the FCA consultation phase scheduled for later this year.
CMC , arguably the largest CFD provider in the business, already serves a multitude of clients in Germany, and has said that it finds the regulatory regime of BaFin in that country, although strict, is more business-friendly.
Another major company, IG, is reportedly already in talks with the German regulator regarding its requirements, and has urged its clients to protest the FCA proposals unveiled late last year.
InfoPowa readers will recall that in its announcement last year the FCA revealed that it was worried that increasing numbers of retail clients are trading in contracts-for-difference products without fully understanding the market and risks involved, thereby placing themselves in financial danger. The watchdog went so far as to claim that its research showed that 82 percent of clients lost money on such deals.
Online Casino News Courtesy of Infopowa