The European Securities and Markets Authority (ESMA) has extended its product interventions for binary options and for contracts for difference (CFDs) for a second time for a further three months: the ban on the marketing and selling of binary options to retail investors in the EU now applies until 1 April 2019. The restrictions on the marketing and selling of contracts for difference (CFDs) to retail investors have been extended until 30 April 2019. The scope of the restrictions remains unchanged. ESMA and the Austrian Financial Market Authority (FMA) consider the extension of the measures to be a significant step in relation to collective investor protection.
Such a product intervention is the ultimate measure available to supervisory authorities to prevent investors from being able to purchase products that are strongly disadvantageous for them or that bear disproportionately high risks. A product intervention only comes into consideration where it is not possible to neutralise arising risks by means of other instruments under supervisory law. Product intervention measures are possible in the case of investor protection being significantly endangered, or where the functioning of the financial or commodities markets are endangered, or in the event of there being a threat to the stability of the financial system.
Significant concerns for investor protection may arise from the design and risks of financial products, for example when marketing compex and intransparent financial products to retail investors. This applies to binary options: and contracts for difference (CFDs): They are highly complex products, about which frequently only intransparent information is available, and which are frequently distributed by means of highly aggressive marketing.
Further information may be found:
- On the ESMA website at https://www.esma.europa.eu/
- In the contributions to the FMA’s Focus series on Product Intervention (https://www.fma.gv.at/en/fma-thematic-focuses/fma-focus-product-intervention/) as well as on Binary Options and CFDs (https://www.fma.gv.at/en/fma-thematic-focuses/fma-focus-on-binary-options-and-cfds/).
Journalists may address further enquiries to:
Mr. Stefan Maier
+43/(0)1/24959-6001
+43/(0)676/882 49 426