CMC Markets, IG and Plus500 welcome German regulator's restrictions on CFDs

CMC Markets, IG Group and Plus500 have welcomed the outcome of German financial regulator BaFin's consultation into the retail contracts-for-difference market, which requires the implementation of negative balance protection so that clients cannot lose more than their account balance.

CMC, which provides retail CFD trading, said it already offers balance protection through its proprietary Next Generation platform, and therefore will comply with the BaFin proposals in full by the required deadline of 10 August 2017.

It added that there are no further changes for clients that have been proposed by BaFin, including no regulator-imposed limitations on margins.

"CMC is pleased that the BaFin has maintained the scope of the consultation and the speed at which any regulatory uncertainty in Germany has come to a close.

"CMC is already the market leader in Germany according to the independent Investment Trends survey and believes that the BaFin proposals will further enhance this position given the ease of technology implementation, focus on clients and customer service."

Meanwhile, IG pointed out that as per its announcement last December, it already actively markets its Limited Risk Account in Germany which is not only compliant with these new rules, but provides additional 'by position' protection to German consumers.

"IG firmly believes in robust and proportionate regulatory oversight of the CFD sector and believes this move should both provide additional protection for consumers and enhance its competitive position in the country," it said.

AIM-listed online trading platform provider Plus500 also welcomed the outcome as it reiterated the fact it has always provided balance protection to its customers across all its product offerings in all its markets, as a core principle of its business model.

"Plus500 also notes that BaFin has not implemented any leverage limits. Therefore these changes will have no effect on its business."