France’s AMF: Some Cypriot CFD and binary options brokers keep breaking advertising ban
France’s financial regulator says it will not prohibit the activities of brokers that breach the ban for the time being as the new MIFID II and MIFIR rules, which envisage more effective penalties, will soon come into force.
In the face of the ban on advertising of toxic financial products, such as binary options and certain types of CFDs, some companies, many of which are Cypriot, continue to violate the Sapin 2 law in France. This was confirmed by Robert Ophèle, Chairman of France’s financial markets authority AMF.
In a speech delivered on Thursday, October 5, 2017, Mr Ophèle said that the way toxic products are marketed remains one of the main challenges for the regulator.
He quoted statistics showing that the number of advertisements about trading of such products distributed from February to July 2017 was down by 60% compared to the same period in the preceding year. However, the number of new advertisements about online trading of toxic products distributed after the Sapin 2 law came into force reached 162 at the end of August. A total of 28 providers of online trading services were responsible for these advertisements. Of these 28 companies, 26 were registered in an EU member state other than France. Of these 26 brokers, 19 were Cypriot, a fact that the AMF Chairman called barely surprising.
AMF has turned to the companies that break the law, demanding that they withdraw their ads – the majority have complied with the regulatory demands. Nevertheless, certain Cypriot companies have shown reluctance to comply with the law, the AMF Chairman has confirmed. The regulator had considered evoking MIFID article 62, in order to prohibit the activities of these companies in France. This article was used back in August 2016, when AMF acted against the Cypriot firm Rodeler Limited.
This time, however, the French regulator has decided not to apply this rule and instead to wait for the coming into effect of the new MIFID II and MIFIR rules – their entry into force is just three months away.
The new rules will allow ESMA to prohibit the marketing of financial products across the European Union for a period of three months for purposes of consumer protection. National authorities will be able to ban such activities for an unlimited period of time within the particular EU member state.