Belfast Telegraph

Irish central bank restricts sale of risky financial product used by Sean Quinn

Trading in risky financial products including contracts for difference (CFDs) - famously used by Co Fermanagh tycoon Sean Quinn to build up a stake in Anglo Irish Bank - has been permanently restricted for retail investors in the Republic
Trading in risky financial products including contracts for difference (CFDs) - famously used by Co Fermanagh tycoon Sean Quinn to build up a stake in Anglo Irish Bank - has been permanently restricted for retail investors in the Republic

By Shawn Pogatchnik

Trading in risky financial products including contracts for difference (CFDs) - famously used by Co Fermanagh tycoon Sean Quinn to build up a stake in Anglo Irish Bank - has been permanently restricted for retail investors in the Republic.

The Central Bank of Ireland said it was imposing a ban on the retail sale of so called 'all-or-nothing' financial options and maintaining heavy restrictions on CFDs, which have been subject to temporary controls imposed by the European Securities and Markets Authority (ESMA).

The use of CFDs to build up a 25% stake in Anglo Irish Bank was among the factors that ruined the one-time billionaire Sean Quinn.

Derville Rowland, central bank director general for financial conduct, said the restrictions would protect retail investors from products she described as "no more an investment than betting on a horse."

The Central Bank is acting under new powers.

The changes mean Ireland will retain the investor protections when the ESMA's temporary restrictions expire in July.

Binary options, also known as all-or-nothing options, pay out if an investor makes a correct prediction about a market price, but holders can suffer total losses.

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Ireland permitted the trade until the ESMA's intervention.

The CFD restrictions mean the derivatives can still be traded but with limits on associated borrowing and guarantees that investors cannot lose more than their deposit.

Belfast Telegraph

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