Spreadbetters in mass protest at EU lending curbs move

Nearly 14,000 spreadbetters have hit out at plans for a crackdown on the sector in a European consultation that closed on Monday

The European Securities and Markets Authority (Esma) wants to slash the borrowing that customers can use to enhance winnings — or magnify losses — to protect the estimated three-quarters of customers who lose money trading contracts for difference.

Esma plans to use enhanced powers for product intervention under Mifid II rules introduced in January, putting forward even tougher limits than proposed by the UK’s Financial Conduct Authority in 2016.

Esma opened a two-week consultation on the issue on January 18, which has so far drawn the mass of responses, including more than 6000 from the UK.

About 98% opposed the proposed changes.

Legal experts have criticised the swift actions of the European body — originally set up as a co-ordinator of individual regulators — which is only supposed to intervene when an individual regulator has not taken no or insufficient action.

Ashurst partner Jake Green said: “They are using their brief extremely quickly and aggressively.”