Denmark set to impose permanent ban on offering of binary options to retail investors

Maria Nikolova

The new rules, which correspond to ESMA product intervention measures at a national level, are set to come into effect in early July.

Denmark’s Financial Supervisory Authority (FSA) has earlier today unveiled its proposals to introduce a permanent ban on the marketing, distribution and sale of binary options to retail customers.

The Danish rules will be equivalent to the product intervention measures that ESMA introduced last summer. The ban on the offering of binary options in Denmark, however, will be permanent.

The Danish FSA has repeatedly warned retail customers against investment in binary options. The regulator notes that binary options are inherently risky and complex products and are often traded speculatively over the Internet with providers that do not comply with investor protection rules.

The FSA shares ESMA’s and other competent national authorities’ concerns about the growing number of retail customers across the EU who buy binary options and consistently lose their money. The Danish FSA also considers that the risk for retail customers will be present in both Denmark and the rest of the EU, unless the competent national authorities exercise their power to impose a permanent ban to replace ESMA’s temporary ban.

The Danish ban will apply to binary options for retail customers in and from Denmark and will thus apply to both Danish securities dealers and securities dealers operating in Denmark via the freedom of establishment or under the rules on the free provision of services. The ban is expected to take effect in early July 2019.

A number of EU nations have also acted to ban the offering of binary options to retail traders – for instance, Germany, Austria, France, the UK, and Cyprus. ESMA has been supportive of the national measures. The pan-EU regulator has issued favourable opinions on all proposals for national product intervention measures concerning binary options thus far.

Read this next

Digital Assets

Russia to legalize cryptocurrency payments as sanctions bite

Russia could soon be the latest country to lay down ground rules for legalizing cryptocurrencies as a means of payment, a sign that governments around the world are realizing that digital assets are here to stay.

Institutional FX

XTX Markets UK reports lackluster results for 2021

The UK business of XTX Markets, a non-bank FX liquidity provider and market maker, has reported its financials for the fiscal year ending December 31, 2021. The report showed downbeat metrics after seeing revenues and customer activity drop as the pandemic trading boom fizzled out.

Digital Assets

Binance in talks with BaFin to get license in Germany

Changpeng Zhao (CZ), founder and CEO of Binance has confirmed that they are in talks with Germany’s regulators to secure a local crypto license.

Retail FX

German broker NAGA Group reports strong financial results

NAGA Group, a provider of brokerage services, cryptocurrency platform NAGAX and neo-banking app NAGA Pay, announced the preliminary financial results for April 2022, which beat analysts’ forecasts.

Executive Moves

Talos announces key hires after raising $105m to expand institutional crypto platform

Talos has seen institutional trading volume explode over 20 times year-over-year and was in need of funding to keep scaling the platform and expand into APAC and Europe, as well as to expand its product lines, including pre and post-trade tools.

Industry News

LSEG agrees to acquire MayStreet to enhance Data & Analytics division

“Adding MayStreet’s low latency domain expertise to our existing capabilities enables us to bring increased value to customers’ electronic trading workflows across a number of use cases, including quantitative modelling, research and programmatic trading.”

Digital Assets

IDEG launches arbitrage solution for crypto investors looking for “de-risk option”

Risk and uncertainty levels are at all-year highs and IDEG points to arbitrage as a way to provide a lower-risk strategy with no delta exposure.

Digital Assets

DoraHacks raises $20m from FTX, Liberty City, Circle, Gemini, Crypto.com, more

DoraHacks partners with several web3 ecosystems, including Solana, Polygon, and Avalanche to provide access to the global developer community and has been driving key research.

Interviews

AC Interview – Neil Swanepoel, Sales Development Representative

One of the biggest challenges faced by brokers is finding the best tools/methods to attract and convert new traders. With trading becoming increasingly more popular among Gen Z, it is this young group of up and coming traders that hold the most potential for brokers. To help better understand this unique demographic we spoke to Autochartist Sales Manager and new trader Neil Swanepoel. 

<