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

<p>Since the deadline of 31 July for meeting the <a href="https://www.financemagnates.com/forex/duty-calls-how-to-prepare-to-fcas-new-regulation/">requirements of the UK’s Consumer Duty</a> 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.
</p><p>The UK’s <a href="https://www.financemagnates.com/terms/f/financial-conduct-authority-fca/">Financial Conduct Authority (FCA</a>) questioned 44 <a href="https://www.financemagnates.com/forex/fca-warns-brokers-against-cfds-poor-practices/">CFD brokers</a> to know the industry’s preparedness toward Consumer Duty requirements. In total, 1,230 companies across 17 sectors participated in the FCA's survey.
</p><p>The CFD Industry Is Partly Prepared for Consumer Duty Rules
</p><p>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%.</p><p>Under the upcoming <a href="https://www.financemagnates.com/forex/regulation/fca-proposes-new-consumer-duty-for-financial-firms/">Consumer Duty</a> 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.
</p><p>Strong Awareness
</p><p>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.
</p><p>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.
</p><p>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.</p>

This article was written by Arnab Shome at www.financemagnates.com.