Regulators get tough on leverage

The Financial Conduct Authority have put forward limits on how much leverage traders can use. Matthew Partridge reports.

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It's for his own good
(Image credit: RTimages)

Last week the Financial Conduct Authority, the UK's financial services regulator, lobbed a bombshell into the world of financial spread betting, setting out proposed limits on the amount of leverage (see below) that punters are allowed to use. While the regulations are primarily designed with contracts for difference in mind, the FCA has confirmed that they intend for them to apply to all similar products, including spread betting, rolling spot foreign exchange and binary bets. The regulator is also imposing restrictions on the type of promotions that spread-betting firms can offer to those who open new accounts.

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Dr Matthew Partridge
Shares editor, MoneyWeek

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

Follow Matthew on Twitter: @DrMatthewPartri