Breaking: AMF toughens its stance on advertising following public consultation

Maria Nikolova

May the climate for advertising of trading products in France worsen further? Yes, it may.

The French financial markets authority (AMF) continues to produce news which further develops its decisive approach regarding advertising of speculative trading products.

Today, the regulator published a communique clarifying its position on the changes stipulated in the “Sapin II” law, with the view providing even more bad news for the parties involved in advertising of speculative financial products.

The summary is simple – the regulator received feedback from 208 business entities, associations and individuals, as a part of its public consultation launched in August last year. The consultation aimed at gathering opinions that would help to create a general set of rules on how to apply the revised law.

“Sapin II”, putting it bluntly, prohibits advertising of contracts that are highly speculative and imply high risk. A previous statement from the AMF defined these instruments as CFDs with high leverage and binary options. The clarifying stance released today, however, makes a more general assumption on which trading instruments will fall under the scope of the law application.

What the AMF says is that “the document will apply to the following instruments:

  • binary options

  • CFDs (contracts for difference);

  • Financial contracts on currencies.”

In addition, the AMF notes that all participants of the publicity chain that promotes these instruments will be affected: ranging from those who disseminate the ads to those who host illegal websites.

It seems that what the AMF is doing is defending a broader interpretation of what the law states. It is important to note, however, that the way that the AMF interprets the law does not mean that this is its single interpretation. Nor does this mean that the law is changed to cover more instruments. A court may disagree with the AMF’s treatment of the law.

What today’s AMF statement means is that the stringent approach of the regulator is getting more stringent thanks to the lack of specification in the law itself.

The French financial markets’ authority has been regularly updating its blacklists of unauthorized FX and binary options brokers, without any major effect thus far. According to a study amid 14,799 French traders published in October 2014, their losses amounted to EUR 175 million during the 4-year period between 2009 and 2012.

The French regulator is determined to co-operate with the legal authorities to have illegal websites blocked.

Read this next

Retail FX

ThinkMarkets expands CFDs lineup to over 4000 ETFs and shares

ThinkMarkets has expanded its service offering by incorporating 2500 new CFDs on shares and ETFs on its ThinkTrader platform.

Retail FX

France regulator warns investors of Omega Pro, Businessempire.fr

France’s financial markets regulator alerted investors that scams related to Omega Pro Ltd are beginning to circulate, with the blacklisted firm capitalizing on the situation to run a range of “unrealistic” offers.

Digital Assets

Web3 platform Grand Time paid $2 million in token earnings to date

Community-driven Web3 platform Grand Time said its offering – which includes a multifaceted platforms and its native token – has been gaining significant traction highlighted by impressive operational metrics.

Institutional FX

FX volumes at MOEX halved in April as ruble gains gorund

Currency trading at Moscow Exchange (MOEX) halted its upward route in April as monthly volumes nearly halved from a month earlier.

Digital Assets

FTX US adds stock trading, fractional shares to crypto platform

FTX US, the American subsidiary of crypto exchange FTX has kicked off stock trading feature to its customers in an effort to compete with popular platforms such as Robinhood and eToro.

Industry News

UK FCA empowered to remove brokers’ permissions in 28 days

Businesses with permissions they don’t need or use, risk misleading consumers. These new powers will enable us to take quicker action to cancel permissions that are not used or needed.

Industry News

CFTC charges $44m Ponzi scheme but millions may have fled to foreign crypto exchange

The CFTC alleged that defendants transferred millions of dollars to an off-shore entity that, in turn, may have transferred funds to a foreign cryptocurrency exchange. None of these funds were returned to the pool.

Technology

Saxo Bank deploys Adenza to address Basel and EBA requirements

The integration of ControllerView will enhance Basel-driven capital calculations and reporting at Saxo Bank in support of the bank’s multijurisdictional capital and liquidity reporting requirements throughout Denmark, Switzerland and UK, with plans to expand into the Netherlands.

Executive Moves

ComplySci appoints CTO, CPO, and CLO to further regtech’s product expansion

ComplySci offers compliance software used by more than 1400 global institutions to identify risk and address regulatory compliance challenges.

<