FX, binary options ads still dominate France’s investment advertising landscape

Maria Nikolova

In the face of the Sapin 2 law, the number of advertisements about Forex and binary options remained substantial in the first nine months of 2017, according to AMF.

France’s financial markets authority AMF has been actively touting changes to rules for digital advertising of investment products, including a ban on digital advertising of high-risk financial products like binary options. The ban is a part of the Sapin 2 law.

In the face of the restrictions, the latest data from AMF show that 20% of the investment advertising online during the first nine months of 2017 was about “very speculative” products such as Forex and binary options. No other investment product type accounts for such a big chunk of the advertising market.

The regulator notes that although the percentage of such ads has dropped from the equivalent period in 2016 (back then, it was 44%), the number of FX and binary options ads is still high, especially if we consider the Sapin 2 law.

AMF has confirmed that some brokers, many of which are Cypriot, continue to violate the Sapin 2 law in France. This was stated by Robert Ophèle, Chairman of France’s AMF, in October this year. 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 contacted the companies that violate the law, demanding that they withdraw their ads – the majority have complied with the regulatory demands. However, certain Cypriot companies have shown reluctance to comply with the law, the AMF Chairman has confirmed. Instead of punishing the violators, the French regulator has decided to wait for the coming into effect of the new MIFID II and MIFIR rules.

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