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Unknown brands chase football sponsorships

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Spread betting and foreign exchange brokers are chasing endorsements and sponsorships from top football clubs while regulators gear up to clamp down on the way they are marketed to retail investors.  There is a trend for partnerships between small, often unknown brands offering FX and contracts-for-difference (CFD) trading with some of the biggest names in global football.

Foreign trading services broker Hantec Markets partnered West Ham United as their official FX partner and China's Brickhill Capital cut a similar deal with Southampton as official Asian trading partner.   The clubs that have agreed partnerships with companies that hitherto have little or no profile in Europe include Atlético Madrid, Arsenal, Juventus and Liverpool.  

Real Madrid and Cristiano Ronaldo signed up to promote Cyprus-registered broker Exness last month. More than $350m went into sports sponsorship from the online trading sector between 2010 and 2016, according to Sports Media Gaming Limited.

European regulators are worried that some platforms, which offer complex CFD and binary options trading, are not fully explaining the associated losses to unwary users.  Investors can leverage their bets and, in some cases, borrow up to one thousand times the sums they have on deposit.  The UK's Financial Conduct Authority estimates that 80 per cent of users have lost an average of £2,200 on CFDs in a year.