CySEC calls for attention with regards to French law changes. Will CIFs comply?
In a Circular to CIFs, the Cypriot regulator draws the attention towards the changes to French laws that prohibit digital advertising of high-risk financial products.
The Cyprus Securities and Exchange Commission (CySEC) has earlier today published a Circular to Cyprus Investment Firms (CIFs) that target French clients informing them of the need to comply with France’s new regulations concerning digital advertising of high-risk investment products.
As most FinanceFeeds’ readers already know, the Sapin 2 law, which came into force in December 2016, prohibits digital marketing of high-risk financial products like binary options. All partnerships that result in advertising of such products are also prohibited.
The CySEC advises CIFs with operations in France and/or offering their services to French clients to consult with their legal departments regarding the necessary legal actions to ensure compliance with the legislation.
CIFs may visit the website of France’s financial markets regulator to find out more information on the aforementioned.
Thus far, a number of CySEC-regulated CIFs, especially binary options firms, have been neglecting the legal provisions stipulated in the Sapin 2 law. Some binary options brokers have kept promoting their services to French clientele via sports partnerships.
24option displays an advert of its partnership with Juventus FC on its French website, whereas Stockpair continues to target French traders via its partnership with German football legend Lothar Matthäus. Anyoption uses Brazilian football star Roberto Carlos to market its services to French traders, with an advert placed on its front page including its French version. OptionWeb cannot let go of its partnership with PSG. Another “investment firm” I cannot name for legal reasons (the respective FinanceFeeds article was taken down following the expert intervention by the lawyers of the investment firm in question) targets French traders with a racing team advert.
Here is the deal. While the regulators are reluctant to implement the law (fine the companies that violate it, take away licenses, ban websites, etc) the industry of online trading falls prey to firms that neglect the rules and abuse all legal loopholes. In the case of the Sapin 2 law and sports sponsorships, many investment firms that continue with the type of advertising that is prohibited by the law refer to their right to keep their partnerships running until June 30, 2017, although this “grace period” applies only to partnerships active through July 1, 2016. Plus, it shows that these companies are not in a hurry to comply with a law – I leave the respected readers to decide what such attitude signifies in terms of corporate ethics.