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ESMA’s ban on binary options officially extended

Oct 02 2018
By
Jonathan Smith

 

The European Securities and Markets Authority (ESMA) announced on Monday that it extends the restrictions imposed on binary options for another three-month period. More specifically, ESMA renews the prohibition on the marketing, distribution or sale of binary options to retail investors as of today, October 2, 2018.

 

The renewal of the restrictions imposed on binary options does not come as a surprise, as ESMA announced its intentions to extend it a further three-month period  in August. Back then, the regulator also announced some changes to the renewal, excluding certain long-term options from the scope of the prohibition.

 

Previous week ESMA has also agreed to extend the restrictions imposed on the sale, distribution, and marketing of contracts for differences (CFDs) until the end of January 2019. The regulator has not changed any of the provisions which it initially announced in March this year. These include a leverage cap of 1:30 for forex majors, provision of negative balance protection on a per account basis, preventing the use of incentives such as bonuses by brokers and a requirement for the latter to state how many of their clients lose money with them.

 

We remind you that the pan-European regulator introduced the ban on binary options and the restrictions on CFDs in July, 2018 due to investor protection concerns. According to the Markets in Financial Instruments Regulation (MiFIR), ESMA can only introduce temporary three-month measures, but before the period expires, the regulator can review the results and consider a further extension for another three month-period.

 

TAGS: ESMA  binary options  ban  renewal 
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