BKM207750 - Bank compensation restriction: definition of banking company: excluded companies – spread betting

CTA09/S133F(2)(h)

A company which deals in contracts for difference including spread betting is an excluded company. The company is excluded if:

  • its only line of business is to carry on relevant regulated activities for the purpose of dealing in contracts for differences as principal with persons all (or all but an insignificant proportion) of whom are retail clients
  • it only carries on relevant regulated activities for the purpose of dealing in contracts for differences with another person (‘P’) to enable it or P to deal in contracts for differences as principal with persons all (or all but an insignificant proportion) of whom are retail clients

This exclusion also applies if a company carries on a second line of business, which is not deposit taking and:

  • the company’s activities in that line of business would not, on their own, result in it being an FCA investment firm that meets the conditions in CTA09/S133H(1B) if it only carried on this second line of business and the relevant conduct occurred on or after 1 January 2022
  • the company’s activities in that line of business would not, on their own, result in it being both an IFPRU 730K firm and a full scope IFPRU investment firm if it only carried on this second line of business and the relevant conduct occurred between 1 January 2014 and 31 December 2021
  • the company’s activities in that line of business would not, on their own, result in it being both an BIPRU 730K firm and a full scope BIPRU investment firm if it only carried on the second line of business and the relevant conduct occurred before 1 January 2014

Contract for difference has the meaning given by CTA09/S582 and is explained at CFM50380.

The definition of a retail client is taken from the FCA Handbook. For periods on or after 1 April 2013 the meaning should be taken from the FCA Handbook in place at the time of the relevant conduct. For earlier periods the meaning should be taken from the FCA Handbook as in force on 1 April 2013.