RE: Remember the CME gap7 Mar 2021 13:03
continued reply from FCA:
However, we consider that due to the unpredictable, volatile nature of the underlying cryptoasset and the lack of inherent value in the underlying assets, as outlined in our consultation paper, a majority of retail clients are likely to suffer a loss over the long-term should they invest in these products
While we carefully consider all responses to our consultation, we did not receive compelling evidence to change our assessment and so confirmed our approach and final rules in Policy Statement 20/10. We estimate a ban could reduce harm by £19m to £101m a year for retail investors. At the same time, we have not extended a ban to professional investors, who may be better able to assess the risks and bear potential losses from such investments. We agree that our prohibition should be kept under review. This is in line with Article 42(6) of MiFIR. We will reconsider our position if there is robust evidence that the cryptoasset market is sufficiently changing to address the drivers of the harms we have identified.
The FCA’s opinions are outdated - We consider our proposals to be proportionate to the serious risk of consumer harm, having considered the likely effect on investors and market participants. The inherent risks of the product make it difficult for any retail consumers to make informed investment decisions, regardless of how these products are sold, marketed or distributed. We have seen evidence, which is outlined in our cost benefit analysis in CP19/22, that this has led to poor client outcomes for a majority of retail clients. Investors who have existing positions
Retail consumers with existing holdings can remain invested following the prohibition, until they choose to disinvest. There is no time limit on this, and we do not require or expect firms to close out retail consumers’ positions unless consumers ask for this. We are also allowing an appropriate implementation period of three months to allow firms and consumers to adapt to the rules. We expect firms to treat customers fairly during the transition.
END