Who should read this paper All interested stakeholders are invited to respond to this call for evidence. This call for evidence is primarily of interest to i investment firms and credit institutions providing investment services and in particular providers of contracts for differences or binary options impacted by ESMA product intervention measures and ii consumer groups and investors.

Effects of product intervention measures regarding CFDs and binary options on market participants and clients Details Responding to this paper ESMA invites comments on this paper and in particular on the specific questions summarised in Chapter 5.

ESMA will consider all comments received by 4 November pdf pdf 3. NCAs will monitor the impact of these measures during their application and will assess, with ESMA, what next steps are required. The product intervention measures ESMA has adopted under Article 40 of the Markets in Financial Instruments Regulation include:. Leverage limits on the opening of a position by a retail client from to , which vary according to the volatility of the underlying:.

A margin close out rule on a per account basis. Negative balance protection on a per account basis. This will provide an overall guaranteed limit on retail client losses;.

MiFIR gives ESMA the power to introduce temporary intervention measures on a three monthly basis. Before the end of the three months, ESMA will review the product intervention measures and consider the need to extend them for a further three months.

ESMA adopts final product intervention measures on CFDs and binary options 01 June They will start to apply from 2 July for binary options and from 1 August for CFDs and will apply as follows: 1. Binary Options from 2 July - a prohibition on the marketing, distribution or sale of binary options to retail investors; and 2.

Leverage limits on the opening of a position by a retail client from to , which vary according to the volatility of the underlying: · for major currency pairs; · for non-major currency pairs, gold and major indices; · for commodities other than gold and non-major equity indices; · for individual equities and other reference values; · for cryptocurrencies; 2. A standardised risk warning by CFD providers. This would include an indication of the range of losses on retail investor accounts.

The potential measure under consideration is a prohibition on the marketing, distribution or sale of binary options to retail investors.

ESMA consults on potential CFD and binary options measures to protect retail investors 18 January It is now seeking evidence from stakeholders on the impact of the following proposed measures: Contracts for Difference The specific potential measures under consideration are: i. These would range from to to reflect the historical price behaviour of different classes of underlying assets; ii.

This would provide an overall guaranteed limit on retail client losses; iv. A restriction on the incentivisation of trading provided by a CFD provider; and v. ESMA is also considering whether CFDs in cryptocurrencies should be addressed in the measures. Binary Options The potential measure under consideration is a prohibition on the marketing, distribution or sale of binary options to retail investors.

The European Securities and Markets Authority ESMA has published a call for evidence on potential product intervention measures relating to the provision of contracts for differences CFDs , including rolling spot forex, and binary options to retail investors.

ESMA published a statement on 15 December explaining that it was considering the possible use of its product intervention powers under Article 40 of MiFIR to address investor protection concerns posed by the marketing, distribution and sale of CFDs and binary options to retail investors.

Leverage limits on the opening of a position by a retail client. These would range from to to reflect the historical price behaviour of different classes of underlying assets;. A margin close out rule on a position by position basis. Negative balance protection on a per account basis. This would provide an overall guaranteed limit on retail client losses;. A restriction on the incentivisation of trading provided by a CFD provider; and.

A standardised risk warning by CFD providers. This would include an indication of the range of losses on retail investor accounts. The potential measure under consideration is a prohibition on the marketing, distribution or sale of binary options to retail investors.

ESMA consults on potential CFD and binary options measures to protect retail investors 18 January It is now seeking evidence from stakeholders on the impact of the following proposed measures: Contracts for Difference The specific potential measures under consideration are: i.

These would range from to to reflect the historical price behaviour of different classes of underlying assets; ii. This would provide an overall guaranteed limit on retail client losses; iv.

A restriction on the incentivisation of trading provided by a CFD provider; and v. ESMA is also considering whether CFDs in cryptocurrencies should be addressed in the measures. Binary Options The potential measure under consideration is a prohibition on the marketing, distribution or sale of binary options to retail investors.

Next Steps The submission period for responses will close at pdf ON THE SAME TOPIC. ESMA consults on rules for passporting for investment firms 17 November ESMA issues an opinion on Product Intervention Measure on Futures taken by Germany 26 October ACER and ESMA enhance cooperation to strengthen oversight of energy and energy derivative markets 18 October ESMA announces strategic priorities for the next five years 10 October ESMA reminds firms of the impact of inflation in the context of investment services to retail clients 27 September ESMA publishes final guidelines on MiFID II suitability requirements 23 September ESMA finds NCAs' scrutiny and approval of prospectuses satisfactory 21 July ESMA and EBA publish guidelines to harmonise the supervisory review and evaluation process of investment firms 21 July ESMA proposes key risk indicators for retail investors 20 July ESMA identifies data reporting services providers to be supervised directly 12 July

This may require a number of practical examples to be illustrated to clients as part of their notification of changes as well as potentially a greater visual representation in terms of the customer interface in the respective trading platform in the form of pop-ups, shaded areas in charts or special announcements on relevant dashboards etc. ESMA has indicated that further action may be taken that goes specifically beyond existing action, notably the joint European Supervisory Authorities Warnings on Virtual Currencies. Shrink: somewhat in the short-term: less gambling advertising budgets will flow into CFDs, and will go elsewhere online gambling, crypto, offshore, etc. The new measures on CFDs will, for the first time, ensure that investors cannot lose more money than they put in, restrict the use of leverage and incentives, and provide understandable risk warnings for investors. ESMA and EBA publish guidelines to harmonise the supervisory review and evaluation process of investment firms 21 July Navigation Derivsource. They will start to apply from 2 July for binary options and from 1 August for CFDs and will apply as follows:.

Categories:

• Binary Options online
• Forex Bitcoin
• Forex
• Binary Options
• Forex Brokers