Acuiti today publishes Retail Revolution: How retail brokers in Europe are planning to counter CFD restrictions, in association with ION Group.
This report investigates the retail brokers’ thinking about the challenges posed by regulatory restrictions, their strategies to respond and how the insitutional sell-side views both the threat and opportunity of that response.
It is based on a survey of 72 firms in the European market, covering retail and institutional brokerage as well as interviews with retail traders aimed at understanding the challenges that they see in trading listed derivatives in place of CFDs and other retail products.
The key findings of the report include:
- Concern is high among European retail brokers about the impact of restrictions on offering CFDs and other retail instruments
- Retail brokers are planning to respond to any such restrictions by expanding into institutional markets, other regions and growing their offerings of futures and options
- Expansion into institutional markets and growth of the futures and options offering will require investment and a change of approach for retail brokers
- The incumbent sell-side is largely sanguine over the potential increase in competition, but does see opportunity from retail traders coming in to listed markets
- Retail traders are open to trading in listed markets instead of CFDs but voiced concerns over lack of understanding of the products and higher costs – in particular with regards to market data
