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FTSE 100 rises but spread betting firms dive on FCA plans | |
(about 4 hours later) | |
Shares in financial spread betting firms have plunged by a third after the Financial Conduct Authority (FCA) proposed stricter rules for the sector. | Shares in financial spread betting firms have plunged by a third after the Financial Conduct Authority (FCA) proposed stricter rules for the sector. |
The FCA said it was concerned that many retail investors buying "contract for difference" products did not understand them adequately. | The FCA said it was concerned that many retail investors buying "contract for difference" products did not understand them adequately. |
It also noted that 82% of clients lost money on the products. | It also noted that 82% of clients lost money on the products. |
In the FTSE 250, shares in both CMC Markets fell 33% and IG Group shed 38%. | |
Meanwhile Israel-based Plus 500 fell 28% after it said the FCA proposals would "have a material operational and financial impact" on its UK regulated subsidiary, which accounts for about a fifth of revenues. | |
The benchmark FTSE 100 index was up 33 points at 6,779.8 points. | |
Banking shares helped to lift the index, with shares in HSBC climbing 4.3% after Morgan Stanley upgraded its rating on the company to "equal-weight" from "underweight". | |
RBS topped the leader board with a 5.7% rise, followed by Barclays, which closed up 4.6%. | |
Shares in Drax Group ended 8.1% higher after the power producer said it planned to buy energy supplier Opus Energy for £340m. Drax also announced it would buy four gas turbine projects. | |
On the currency markets, the pound fell 0.15% against the dollar to $1.2714, and rose 0.25% against the euro to €1.1854. |