France’s competition watchdog checks 90 entities over FX, binary options ads in 2017
The checks resulted in 14 warnings, 17 injunctions and 8 notices, the annual report of France’s DGCCRF shows.
France’s General Directorate for Competition Policy, Consumer Affairs and Fraud Control (DGCCRF) sought to control how businesses comply with the recently introduced ban on digital advertising of high-risk financial products such as Forex, binary options and high-leverage CFDs.
DGCCRF’s annual report for 2017, which was published earlier today, says that, in 2017, the regulator conducted checks of 90 entities related to such advertisements in order to establish whether they comply or not with the law Sapin II. The latter piece of legislation introduced the ban on certain types of advertising and sponsorship of activities related to such toxic products.
The checks have resulted in 14 warnings, 17 injunctions and 8 notices. Overall, the inspectors note certain ignorance among companies concerning the new advertising rules.
Let’s recall that in October last year, Robert Ophèle, Chairman of France’s financial markets authority AMF, confirmed that the way toxic financial 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.
The European Securities and Markets Authority (ESMA) is currently looking into proposals for restrictions on the offering of CFDs and binary options to retail investors. Leverage caps ranging from 30:1 to 5:1 are proposed for CFDs, whereas the measures in store for binary options are harsher, as the regulator is considering a prohibition on the marketing, distribution or sale of binary options to retail clients.
