ESMA issues positive opinion on Austria’s rules concerning CFDs and binary options

Maria Nikolova

ESMA’s opinion finds that the proposed measures are justified and proportionate.

The European Securities and Markets Authority (ESMA) has today issued two positive opinions on proposed product intervention measures taken by Austria’s financial markets authority (Finanzmarktaufsicht or FMA).

ESMA’s opinion finds that the proposed measures related to the offering of binary options and CFDs are justified and proportionate.

Austria’s national measure regarding binary options consists of a permanent prohibition on the marketing, distribution or sale of binary options to retail clients in or from Austria. The FMA informed ESMA that the national measure is the same as ESMA’s measure at national level, with the difference that the national measure would not expressly prohibit participating in circumvention activities. The national measure is expected to take effect on May 30, 2019.

The national measures regarding CFDs consist of a permanent restriction on the marketing, distribution or sale of CFDs to retail clients in or from Austria. The FMA informed ESMA that the national measures are the same as ESMA’s measures at national level, with the differences that the national measures would: (i) include minor amendments to several of the risk warnings in ESMA’s measures; (ii) include a definition of virtual currencies; and (iii) not expressly prohibit participating in circumvention activities. The national measures are expected to take effect on May 30, 2019.

Although the national measures would not expressly prohibit participating in circumvention activities due to national constitutional constraints, the FMA has assured ESMA that it will ensure through its supervisory and enforcement activity that the national measures are correctly applied.

In April this year, ESMA issued positive opinions regarding the national product intervention measures introduced by three countries – Poland, the UK and the Netherlands.

In a recently published newsletter, the pan-EU watchdog made 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”.

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