ESMA hints at its powers being limited at national level

Maria Nikolova

A national regulator may actually take action contrary to an opinion adopted by ESMA.

The European Securities and Markets Authority (ESMA) has earlier today published its latest newsletter, dedicating a heavy part of it to a set of positive opinions it has recently issued about product intervention measures by a number of national competent authorities (NCAs).

These positive opinions concerned the measures related to the offering of binary options and CFDs in Poland, the UK and the Netherlands.

Today’s newsletter by ESMA pretty much restates what is already said about these measures and ESMA’s opinion – which is supportive. One thing should be noted though – ESMA makes a brief remark regarding the cases where its opinion on the product intervention measures adopted by NCAs is negative.

“If ESMA concludes that a proposed national product intervention measure is not justified or proportionate it will say in its opinion. If an NCA proposes to take, or takes, action contrary to an opinion adopted by ESMA, the NCA shall immediately publish on its website a notice fully explaining its reasons for so doing”.

This statement is pretty startling. Basically, it may be interpreted as saying that the worst thing that may happen to an NCA which decides to introduce measures regarding binaries and/or CFDs that are not welcome by ESMA is to be scolded via a negative opinion. Then, the national regulator simply has to publish a text explaining why it decided to introduce measures that are not supported by ESMA. And that is it.

Put otherwise, ESMA has limited powers when deciding on product intervention measures at a national level. It may well be the case then, that certain nations that are willing to support their online trading industries may chose to discard the restrictions introduced by ESMA.

Only time will tell, of course. At present, there are temporary measures in place that prohibit the sale and marketing of binary options across the EU and certain restrictions on the offering of CFDs to retail investors (for instance, there is a ban on a raft of incentives and there are caps on leverage).

Read this next

Retail FX

Financial Commission adds FX broker Bold Prime to membership roster

The Financial Commission today announced that it has added Bold Prime to its member roster, which is made up of online brokerages operating in FX, derivatives and cryptocurrency markets.

Digital Assets

Despite crypto winter, Cake DeFi paid out $58 million in Q2 rewards

According to its latest ‘Transparency Report,’ Cake DeFi continued its growth trajectory in the three months through June 2022, even as the entire crypto industry experienced macro challenges this quarter.

Retail FX

SimpleFX Review: Cryptos, Spreads, Pros & Cons

SimpleFX combines years of Forex and cryptocurrency experience with a focus on offering resources to retail traders. 

Retail FX

Ironbeam becomes CME clearing member and launches MT5

“The direct clearing aspect along with our low-latency proprietary trading tools and technology solutions make Ironbeam the ideal trading destination.”

Institutional FX

Top 0.07%: oneZero makes it to Inc. 5000 of fastest growing companies in America

oneZero started out by serving the foreign exchange trading community, developing and executing technology that could scale with the growth of the FX market.

Industry News

CFTC wins case against broker for secretly taking other side of client orders in block trades

“As we said at the outset of this case, the illegal use of inside or confidential information undermines confidence in markets and will not be tolerated.”


BankiFi raises $4.8m to bring embedded banking platform to North America

“Our mission is to make all aspects of cash management and payments easier for SMBs everywhere, and this investment is another huge step to making that a reality.”

Executive Moves

Shieldpay hires ex-Payoneer Chris Andrews as Head of Sales

“We’ll be expanding our position in existing markets and accelerating growth into new verticals, whilst building on our direct and indirect channels.”

Digital Assets secures preliminary approval to operate in Canada, one of the longest-established crypto platforms, has become the first digital asset platform to sign a Pre-‘Registration Undertaking’ with the Ontario Securities Commission (OSC) in Canada.