Spread betting firms saw their share prices tumble on Tuesday after the UK’s financial watchdog proposed stricter rules for the sector.

On Tuesday, the Financial Conduct Authority (FCA) announced new restrictions on selling contracts for difference (CFD) products to retail customers who may not understand the full ramifications of their ‘investments.’

The CFD category, which includes spread betting and ‘rolling spot’ foreign exchange products, can result in investors/bettors losing many multiples of their original stake. The FCA says its study of the sector indicates that 82% of investors lost an average of £2,200 on their CFD bets.

The FCA’s proposed changes include standardized risk warnings and mandatory disclosure of profit-loss ratios. Providers will also be forbidden from offering sign-up bonuses or other incentives to promote CFD products.