The leverage restrictions and other regulations adopted in the summer of 2018 saved UK forex and CFDs traders annually some 451 million pounds, latest Sector Views annual report of the British Financial Conduct Authority (FCA), reveals.

According to the report the persistent lower interest rates drive many retail investors from safer long term investments to high risk assets like CFDs and mini bonds.

According to the FCA data before the new rules were adopted in August 2018 some 800 000 active UK traders held in live client accounts a total of 1,5 billion GBP, of which over two thirds were lost within a year.

“We estimated that, overall, retail clients lost 1.07 billion GBP per year trading these products. Following the introduction of leverage limits and other investor protection measures, total losses for retail clients of UK firms reduced by 77 million GBP between August and October 2018 alone. We estimate that our final rules will save retail consumers between 267 million GBP and 451 million GBP overall per year”, FCA said in the report.

The regulator notes that currently some brokers encourage their clients to apply for “professional status”, which allows for higher leverage or are offering them to join offshore brokerages.

“Respondents also said they distrusted mainstream media and communications from institutions when considering these investments. They prefer to rely on friends, family and acquaintances, specialized online media and social media. Respondents were confident in their knowledge of the market and/or their ‘instincts’ when making decisions”, the report also said.