The City regulator has used its new power to ban the sale of a financial product to retail investors for the first time.

The Financial Conduct Authority said contingent convertible securities, known as CoCos in City circles, were highly risky and untested.

Banks issue CoCos to bolster capital during times of crisis. They convert into equity when banks run into trouble, or can have their value wiped out completely.

Barclays is one of a number of banks to issue CoCos that regulators have said could be a useful way to raise capital.

But Christopher Woolward, the FCA's policy director, said: "In a low interest rate environment many investors might be tempted by CoCos offering high headline returns. However, they are complex and can be highly risky, and the FCA has used its new powers to ensure that CoCos are not inappropriately made available to the mass retail market while still allowing access for experienced investors."

The FCA said it was the first time it had prevented a product being sold without issuing a consultation first. The restriction will run from 1 October 2014 to 1 October 2015.

Andrew Carmichael, a lawyer at the legal firm Linklaters, said banks had been using CoCos to boost their capital positions. "The FCA one year product restriction of sales to retail investors shows the concern of regulators that the high yield on these securities may make them attractive to retail investors not withstanding their highly complex nature," he said.