FCA bans sale of CoCos to retail investors

clock • 2 min read

The Financial Conduct Authority (FCA) is to restrict firms from selling contingent convertible securities (CoCos) to retail investors as of 1 October in the first use of its new consumer protection powers.

The FCA said the move will be “temporary” ahead of a consultation on permanent rules later this year. As of 1 October, therefore, the sale of CoCos will be temporarily restricted to professional, institutional and sophisticated or high net worth retail investors for the subsequent 12 months, meaning retail investment funds and the like are not affected.. The regulator said it will continue to work with issuers to ensure that the sale of these instruments is appropriately targeted.   It said there is at present "little evidence of how CoCos operate in practice. The securities are de...

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