Only 61% of UK CFD Brokers Will Comply with Consumer Duty Before the Deadline

The UK is about to integrate its Consumer Duty by the end of the month, which requires the local CFD brokers to meet the necessary requirements in order to continue operating. However, after the country’s financial watchdog, the FCA questioned the brokers, it discovered that only 61% would be fully compliant by the deadline — July 31st.

61% of CFD brokers will be ready to meet the compliance deadline

There is less than a month before UK’s Consumer Duty gets implemented, with the deadline being July 31st. In order to keep their products and services open for sale and renewal, the country’s CFD providers must fully comply with the new set of rules.

However, the UK’s Financial Conduct Authority questioned 44 CFD brokers in a recent survey in order to understand how prepared they are for Consumer Duty requirements. The survey revealed that 61% are confident they will be fully compliant before the deadline, while 91% of questioned providers expect they will meet all or most of the requirements before the end of the month.

While the situation is not ideal, the figures are still higher than the average of 86% found in other sectors. The survey questioned a total of 1,230 companies across all 17 sectors.

The report noted that 30% of CFD providers would meet most of the Consumer Duty requirements by the end of July. 2% of the firms believe they will comply with some requirements, but not all. They noted that they have “too much work to do” in order to become fully compliant in time. The new requirements will not apply to the remaining 7% of companies.

Interestingly, the new requirements will have firms provide users with products and services that meet their needs and offer fair value. In addition, consumers have to receive user-friendly communication. They should also get customer support whenever they need it. The rules will include all services and products offered to business-to-customer and retail users.

UK’s CFD brokers are aware of the upcoming changes and what they mean

The CFD industry is already quite tightly regulated, and the survey has revealed that industry players know the Consumer Duty requirements well. 100% of the questioned companies know both the requirements and the deadline for implementing changes and achieving full compliance. The study also revealed that they know how will the new rules be applied to their organizations.

The problem is that some companies need to implement greater changes than others. The FCA said that 30% of CFD participants strongly agree that Consumer Duty will bring long-term benefits and that these benefits will outweigh short-term costs of implementation. Another 14% chose the “tend to agree with this question” option, while 39% remained neutral, neither agreeing nor disagreeing.

Only 7% said they “tend to disagree,” while 5% said they “strongly disagree.” The remaining 7% selected the “don’t know” option about the long-term benefits.