ESMA agrees with the Czech Republic, Estonia and Slovakia over CFD, binary options restrictions

Maria Nikolova

The pan-EU watchdog issues positive opinions on the national product intervention measures proposed by the Czech Republic, Estonia and Slovakia.

The European Securities and Markets Authority (ESMA) continues to issue positive opinions about the planned restrictions on the offering of CFDs and binaries by the National Competent Authorities (NCAs) of European countries. The latest countries to receive positive assessment by ESMA are the Czech Republic, Estonia and Slovakia.

ESMA has issued opinions on national product intervention measures from:

  • The Česká Národní Banka of the Czech Republic (CNB)– Opinion on the proposed product intervention measure relating to binary options;
  • The Finantsinspektsioon of Estonia (FSA) – Opinion on the proposed product intervention measure relating to binary options;
  • The Finantsinspektsioon of Estonia (FSA) – Opinion on the proposed product intervention measures relating to contracts for differences;
  • The Národná Banka Slovenska (NBS)- Opinion on the proposed product intervention measure relating to binary options; and
  • The Národná Banka Slovenska (NBS) – Opinion on the proposed product intervention measures relating to contracts for differences.

ESMA’s opinion finds that the proposed measures are justified and proportionate. This is barely surprising as the proposed national measures are the same as those implemented by ESMA last summer. The difference is that the national measures are set to be implemented on a permanent basis.

This means that binary options marketing and offering to retail investors will be prohibited, whereas the offering of CFDs to such investors will be restricted (via measures like leverage caps).

A number of other countries have secured ESMA’s positive evaluation regarding their product intervention measures. The list includes Finland, Lithuania, Spain, Austria, Poland, the UK and the Netherlands.

It would be interesting to see how ESMA would react to the Cypriot proposals. Let’s recall that, CySEC has unveiled a proposal for national product intervention measures that envisage different leverage caps depending on the types of retail investors.

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