FCA proposes permanent ban on retail sales of CoCos

The Financial Conduct Authority (FCA) is proposing to make its block on the distribution of contingent convertible bonds (CoCos) to retail investors permanent, following a temporary ban earlier this year.

In August, the regulator announced temporary rules imposing a restriction on the retail distribution of CoCos, to run for a year from 1 October 2014. The FCA is now consulting on proposed permanent rules, which are broadly the same as the temporary rules, but would also impose restrictions on funds of CoCos.   The regulator described CoCos as "risky, highly complex financial instruments" which are unlikely to be appropriate for ordinary retail investors. Distribution to professional and institutional investors will remain unrestricted. The FCA is also proposing firms selling mutual ...