The appellants appealed a Capital Markets Tribunal decision finding that their business of trading in Contracts for Difference (CFDs) constituted trading and advising in unregistered securities.
The appellants argued that the CFDs were not 'investment contracts' because the CFD providers were counterparties and did not share in profits or losses, thus failing the 'common enterprise' component of the legal test.
The Divisional Court dismissed the appeal, holding that the Tribunal correctly applied a flexible approach to the investment contract test and made no palpable or overriding error in finding that the investors were dependent on the CFD providers, thereby establishing a common enterprise.
