Belgium’s FSMA clarifies its position regarding Plus500 settlement

Maria Nikolova

The Belgian regulator says Plus500 did not have prospectus, approved by the FSMA, for CFD offering.

Plus500 Ltd (LON:PLUS) made some headlines this morning by posting a filing with the London Stock Exchange with regards to a settlement it had reached with Belgium’s financial regulator FSMA. As one may expect in such cases, Plus500’s statement was rather short and elusive, announcing merely that the company was fined EUR550,000 and that, under the settlement, it does not admit any guilt.

Several hours after that, Belgium’s financial markets authority also announced the settlement, providing more detail into the matter.

According to the FSMA statement, Plus500 (Plus500CY Ltd and Plus500UK Ltd, to be more precise) had failed to provide a prospectus for CFDs. The prospectus is necessary to describe the characteristics of an investment instrument offered to Belgian investors and to define the risks associated with this instrument.

Such prospectuses have to be approved by the FSMA before a given instrument is offered to Belgian residents.

The FSMA alleges that Plus500 did not have the necessary prospectuses to offer CFD trading in Belgium. On top of the fine and the publication of the associated announcement on FSMA’s website, Plus500 has to contact its Belgian clients and to offer them to terminate their contracts with the broker without any charges. Also, the broker agrees to close the website www.plus500.be and to indicate on its other websites that the trading instruments offered are not available to Belgian residents.

FSMA has been amid the first European regulators to take a harsh stance regarding high-risk derivatives. In August last year, following proposed regulatory changes by the FSMA, Belgium outlawed certain high-risk derivatives and binary options. The Belgian financial regulator had been warning against binary options brokers long before that but the August 2016 changes represented a decisive step on part of the nation’s authorities.

Meanwhile, other European regulators, like the Dutch AFM, are seeking to implement similar measures. The Netherlands’ financial regulator has proposed a ban on the advertising of harmful financial instruments like high-leverage CFDs and binary options, with the ban expected to take effect in the middle of 2017.

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