What were some of the forex industry news that caught your attention in the past week? For example, the FCA issued a warning to authorized CFD brokers that bad practices would result in customers losing money; CySEC updates the requirements for brokers to provide investment services in third countries; TP ICAP is authorized by the FCA to conduct spot wholesale trading of digital assets. Specific news reports are as follows:

1. The FCA has issued a warning to authorised CFD brokers, warning that their poor practices will result in customers losing money

The UK's financial regulator, the FCA, has sent an email to the ceos of CFD brokers that includes a stark warning about ongoing bad behaviour and a request for a response by January 2023. The main reason for this is that since CFDS are highly leveraged derivatives in the forex market, adverse price movements can lead to significant losses for consumers.

According to statistics, about 80% of clients lose money when they invest in CFDS. In some of the worst cases, the FCA found the use of fake celebrity endorsements, the use of pressure selling tactics to persuade people to invest more and more money, as well as offering incentives to customers to upgrade to selective professional status when they did not meet the criteria and lost their protection under our rules, and unauthorised investment advice to customers.

As the industry has attracted a lot of companies from overseas into the UK without good customer outcomes, a large number of customers in the UK have lost money. In order to avoid the risk, the FCA launched a crackdown to ensure that consumers can get the maximum protection. In 2020-2021, the FCA has cracked down on a total of 24 UK-based brokers marketing CFDS, including some CySEC-licensed CFDS brokers based in Cyprus. According to statistics, the action has saved UK consumers £100 million in losses in 2021. Further FCA action has already been taken in 2022 and will continue where reasonable.

2. CySEC updates the requirements for brokers to provide investment services in third countries

The Cyprus Securities and Exchange Commission (CySEC) has issued a notice to the Cyprus Investment Company (CIFs) regarding the provision of investment and ancillary services and the execution of investment activities in third countries.

In the notification, CIFs must notify CySEC through a letter of Intent when it wishes to provide and/or perform investment and ancillary services and/or activities in a third country. The letter should include a list of third countries to which CIF intends to provide/perform services and activities. Before providing/performing the above services/activities in a third country, CIFs is required to obtain the necessary authorizations from the relevant competent authorities of the third country in accordance with its legislative framework and to provide CySEC with certified copies of the authorizations approved by the competent authorities of the third country for the provision of these services, and if the third country does not require such authorizations, CIF must provide CySEC with the relevant certification from the competent authorities of the third country. State that the law does not require authorization to perform such services/activities.

The Cypriot regulator noted that the investment company would be solely responsible for obtaining such authorizations from the competent authorities of the third country. CIFs must also file this information in a portal to notify CySEC in writing of any subsequent changes in the third country where it operates.

Furthermore, all existing and new CIFs agreements must publish on their websites the names of all third countries in which they provide/perform services/activities, and investment companies already operating in third countries should ensure that they continue to comply with the legal framework applicable in the relevant third countries.

3. TP ICAP is authorized by FCA to conduct spot wholesale trading of digital assets

The UK's Financial Conduct Authority (FCA) has registered capital markets firm TP ICAP as an approved provider of digital asset services to institutional participants. This innovative trading venue is for institutional market participants only and is operated by Tullett Prebon (Europe) Limited.

The platform combines TP ICAP's proven expertise in operating venues and organizational execution, Fidelity digital assets' institutional-level custody capabilities, and liquidity from the world's leading market makers. In addition, Fusion Digital Assets will leverage the extensive distribution capabilities of the TP ICAP Group.

Fusion Digital Asset says it remains committed to supporting the multi-hosting model. The team is working closely with multiple hosting institutions to provide isolated interoperable hosting services to TP ICAP's customer base. These custodians plan to come online in the next few years to meet the needs and priorities of their customers.