UK’s Financial Conduct Authority(FCA) recently opened a consultation to protect investors who are looking to buy crypto-related futures, options, and contracts. To help with this, the regulating authority proposed a complete ban of crypto-derivates stating that such means of investments are ill-served to retail customers. These retail customers cannot assess the value and risks involved in the derivatives.
FCA stated that if they ban the crypto-derivatives, the potential benefit to the consumers by banning these products will range from £75 million to £234.3 million a year. Christopher Woolard, the executive director of strategy and competition in FCA, mentioned that the prices are incredibly volatile, and consumers can’t rely on these unregulated crypto assets.
World Federation of Exchanges(WFE) on reading this suggested that a complete ban on crypto derivatives would envelop regulated exchanges and central counterparties that help with pre and post-trade risk management standards. Chief Executive Officer of WFE, Nandini Sukumar, said that consumer protection is most important when they are looking for new innovative products.
All the infrastructures that adhere to strict regulatory requirements make the consumer protection a part of their system. They understand the importance of these products and how the best way to support the marketplace is by being a part of a well functioning market.
WFE was formerly known as Federation International des Bourses de Valeurs, or the International Federation of Stock Exchanges is a publicly regulated stock, futures, and options exchanges association. It was founded in 1961 and is headquartered in London. Its members include the London Stock Exchange, Deutsche Boerse, Euronext CME Group, and the Shanghai Stock Exchange.
