The FCA has decided to restrict the distribution of CoCos to retail investors.
The regulator said that this was the first use of new consumer protection powers and from 1st October, 2014, it will restrict firms from distributing contingent convertible securities (known as CoCos) to the mass market.
The FCA director for policy, risk and research, Christopher Woolard, said: “In a low interest rate environment many investors might be tempted by CoCos offering high headline returns. However, they are complex and can be highly risky, and the FCA has used its new powers to ensure that CoCos are not inappropriately made available to the mass retail market while still allowing access for experienced investors.”
