James Moore: Spread betting is easy if you are a Disney mouse

Did you imagine that chancing your arm at spread betting would involve jumping over more fences than the winner of Saturday’s Grand National?

That you’d have to pass a credit check, prove you could afford potentially unlimited losses, and satisfy your chosen provider that you weren’t planning to use them as a means of laundering your dirty cash?

Think again. According to Glenn Stevens, the boss of Gain Capital, which owns the spread betting firm City Index, as long as you can come up with a cool trading handle you can blow your mortgage betting on the Swiss franc. And then try keeping up with the payments by selling the euro with your drug money.

Mr Stevens claims that regulation of the sector is now so Mickey Mouse that people have used the venerable Disney character’s name to set up accounts. Kermit the Frog is another popular handle.

Does this mean he’s saying the real Mickey Mouse is at the Financial Conduct Authority?

Now just you hold your Champion the Wonder Horse(s). It’s the regulators in Cyprus that Mr Stevens wants to trap, where a string of brokers have made use of the EU’s passporting rules to set up on the island before entering the UK.

There have been questions raised about passporting before. Take AgriBank, which lends to farmers and offers savings accounts with tempting rates. It was set up in Malta, another small island with a big financial sector. If Agri hits trouble it will be on Malta’s compensation scheme that UK savers will have to call.

Spread betting firms regulated in Cyprus still have to register with the FCA. Mr Stevens wants this made harder, but it’s not altogether clear that it legally can be.

It might seem Goofy to allow this sort of thing to happen, particularly after the way people with modest means were allowed to rack up huge spread betting losses on the Swiss franc surge. But unfortunately Mickey and Kermie look set to continue punting. Until someone croaks.