CySEC to reach decision on CFD restrictions by end of July

Maria Nikolova

CySEC will then inform ESMA on the content of the national product intervention measures in order for ESMA to issue an Opinion on the proportionality of the restrictions.

Following the launch of the Consultation Paper on Imposing National Product Intervention Measures (“NPIMs”) to Restrict the Marketing, Distribution and Sale of Contracts for Difference (CFDs), and the closure of the Consultation on June 14, 2019, the Cyprus Securities and Exchange Commission (CySEC) today announces that a decision on the content of the national intervention measures is expected to be reached by the end of July.

CySEC will then inform ESMA and other National Competent Authorities (NCAs) on the content of the measures so that ESMA may conduct its examination and issue an Opinion on the proportionality of the intended restrictions.

The ESMA restrictions on the CFD offering will expire on August 1, 2019. However, all Cyprus Investment Firms (CIFs) are told to continue applying the content of the measures under the ESMA Decision on CFDs irrespective of its deadline lapsing, until such time when the Cypriot measures are introduced – a process which is likely to take up to two months following the publication date of this Circular.

In particular, CIFs should comply with the content of the national product intervention measures adopted by other EU NCAs when marketing, distributing or selling CFDs in the territory of the respective Member State. Further, where a CIF markets, distributes or sells CFDs in the Republic of Cyprus or in the territory of a Member State that has not adopted national product intervention measures yet, or in a Third Country, it must abide by the content of the ESMA measures as if the measures were in force.

Let’s recall that, the Cypriot regulator wants to vary leverage caps for CFD trading depending on the type of retail investors. Put otherwise, some retail investors will see even harsher leverage restrictions than the ones introduced by ESMA, whereas others may see the restrictions relaxed.

According to CySEC, the ESMA Decision on CFDs does not distinguish between different subcategories of retails clients. MiFID II does not distinguish between different subcategories of retail clients either, but introduced the notion of target market. CySEC expects CFD providers will not sell such products to clients falling within the negative target market. However, CySEC cannot rule out the possibility that sales of such products might appear in the case of retail clients falling within the grey area of target market (i.e. those not falling neither within the positive target market nor within the negative target market).

CySEC also acknowledges that the term “retail client” encompasses different types of investors, with different levels of knowledge and financial position and the persons falling within the positive target market does not necessarily share the same level of knowledge and financial position.

For example, CySEC is proposing to introduce stricter leverage limits for retail clients falling within the ‘grey area’ of the target market, and affording slightly higher leverage limits for retail clients falling within the upper tier of the positive target market.

Read this next

Digital Assets

Valkyrie pulls back on Ether futures merge with Bitcoin ETF

Valkyrie Funds LLC will suspend the purchase of Ether (ETH) futures contracts for its Valkyrie Bitcoin and Ether Strategy ETF (BTF.O). Additionally, the firm will unwind any positions in Ethereum that it has already acquired.  

Digital Assets

Hong Kong police arrest 18 in $1.5B billion JPEX fraud

The investigation into the JPEX crypto exchange scandal continues to unfold as Hong Kong and Macau police arrest four more individuals. These arrests, which include individuals considered “relatively close to the core” of the scandal, bring the total number of detentions to 18.

Digital Assets

Gemini tells Dutch users to withdraw assets by November 17

Gemini, the cryptocurrency exchange founded by Cameron and Tyler Winklevoss, announced that it will cease providing services to customers in the Netherlands, citing regulatory requirements imposed by the country’s central bank.

Digital Assets

SEC puts BlackRock, Valkyrie, and Bitwise Bitcoin ETFs on hold

The U.S. Securities and Exchange Commission has delayed its decisions on several bitcoin exchange-traded fund (ETF) proposals, leaving many in the crypto industry feeling pessimistic for any future blessing from the agency.

Digital Assets

Ripple backs out of Fortress Trust acquisition

Ripple has decided to cancel its planned acquisition of Fortress Trust, a custodian company, less than a month after initially announcing the agreement.


France regulators blacklists 21 FX brokers, FuturBTC

France’s financial markets regulator, the Autorité des Marchés Financiers (AMF), today shed light on several unregulated forex brokers representing their offering under several brands. Notably, the AMF has identified only one crypto-assets provider in its latest warning.  

Digital Assets

Flare and Arkham Collaborate for Enhanced Decentralized Data Access

Flare’s blockchain for decentralized data acquisition integrates with Arkham’s Intelligence Platform, offering users advanced analytics and actionable on-chain insights.

Industry News

iFX EXPO International 2023 Successfully Concludes

The most talked about financial event of the year took place in Limassol, Cyprus.

Retail FX

Plus500 Forex Garners Market Attention In The Latest Expert Ranking

Securing the 58th spot in Traders Union’s Best Forex Brokers of 2023 ranking, Plus500, despite its cautionary overall score of 6.3 out of 10, stands out for its stringent regulatory compliance, user-centric WebTrader platform, and a commendable focus on account security, though it lags in providing advanced trading tools and trust management features.