Dutch regulator prepares to implement ESMA restrictions on CFDs, binaries on permanent basis
The AFM plans to publish the new rules in April 2019.
The number of European countries which are seeking to implement the product intervention measures introduced by the European Securities and Markets Authority (ESMA) at a national level is growing. The ESMA measures, as FinanceFeeds’ readers probably know, impose a ban on the offering of binary options to retail investors, as well as restrictions on the offering of CFDs to retail investors. Whereas ESMA’s restrictions are temporary, a number of European countries are looking into implementing these rules on a permanent basis.
The latest addition to the this group of countries is the Netherlands, as the Dutch Authority for the Financial Markets (AFM) has unveiled its plans to ban binary options and to introduce restrictions to the offering of CFDs to retail investors in line with ESMA’s rules. These, however, will not be temporary but will last permanently.
AFM’s investigation has shown that there is a significant reason for concern about investor protection. The regulator therefore intends to take measures with regard to the aforementioned products.
The AFM is expected to publish the measures in April 2019.
Germany and the UK have acted in the same manner regarding ESMA’s rules. The FCA’s proposed interventions are the same in substance as ESMA’s, although the UK regulator is also proposing to apply its rules to closely substitutable products, including so-called turbo certificates. The regulator is also envisaging 30:1 leverage limits for CFDs referencing certain government bonds (compared to 5:1 under ESMA’s measures).