France’s AMF voices concerns about temporary nature of ESMA’s rules for CFD and binary options

Maria Nikolova

The Chairman of France’s financial markets regulator warns of potential chaos in case ESMA stops renewing the restrictions on CFDs and the ban on binary options.

Robert Ophèle – Chairman of France’s financial markets authority AMF, has earlier today voiced his concerns about the chaos that may emerge if the European Securities and Markets Authority (ESMA) stops renewing its measures restricting CFD offering to retail investors and prohibiting binary options.

In a speech delivered today, Mr Ophèle recognized the efforts of the EU regulator as adding to those exercised by the French authorities that have been very active, especially if we consider the effects of the Sapin 2 law, in trying to bring to a halt the offering of toxic financial products.

However, serious problems have become apparent since the introduction of the new ESMA rules, AMF’s head stressed, explaining that these problems are due to the temporary nature of the product intervention measures, that is, that these measures last three months and then have to be renewed. This duration, according to Mr Ophèle, is too short and may increase certain risks. How to translate the EU rules into national ones is a particularly sensitive matter, he said, especially given that the national rules may be permanent.

According to Mr Ophele, it is particularly worrying that, once ESMA does not renew the rules for CFDs and binary options, there will be a multitude of national regimes regarding the offering of these products. This will result in chaotic surveillance of products that are marketed online.

This is not the first time that AMF’s Chairman warns about the risks related to the implementation of the ESMA rules. Let’s recall that in June this year, he voiced his concerns regarding similar possible risk associated with the ESMA restrictions on CFD offering and the ban on binary options.

Mr Ophèle noted back then that the national authorities will get to decide on how to implement the rules – they have the right, for instance, to implement the restrictions on a permanent basis. Mr Ophèle said that he notices that certain nations are tempted to adapt the restrictions in a certain way – with regard to the CFD leverage cap or the underlying assets covered by the new rules. He said he could not exclude the possibility that some countries may simply suspend the restrictions within their territories.

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