IG Group chief says Financial Conduct Authority's clampdown will drive customers away from UK providers
Clearly distressed – and who wouldn't be – by the 38.4 percent decline in his company's share price following the Financial Conduct Authority's announcement this week that it is to clampdown on financial (CFD) spread betting firms, IG Group chief executive Peter Hetherington has accused the Authority of mishandling the issue, not using its considerable powers in an even-handed manner, and creating a situation likely to drive customers away from the UK.
Leading UK-listed firms like IG Group, Plus500 and CMC bore the brunt of the market turmoil that followed the FCA announcement, with share prices plummeting in double digit declines.
Speaking to the Sunday Telegraph newspaper, Hetherington said that the clampdown will penalise the wrong firms, and has not been helpful in the sector. He predicted that the proposed imposition of stricter regulations will be counter-productive, because this will push traders/players to firms outside the UK that are beyond the regulator's reach, and will continue to offer higher leverage.
The IG Group chief also claimed that many of the problems flagged by the FCA were generated by smaller contracts for difference firms that, he alleged, were not supervised to the same degree as larger providers like his company.
"I'm putting that as tactfully as I possibly can," he observed, noting that the FCA has "considerable powers that they are not using" and suggesting that if the regulator used these powers "without fear or favour" there would not in any case be a problem.
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