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It’s now official: France bans advertising of forex & binary options

Nov 09 2016
By
Forexbrokerz.com

The French National Assembly has passed the Sapin II bill on Tuesday, which bans the advertising of binary options and CFDs with a leverage greater than 1:5. French lawmakers aim to protect consumers from scammers and companies engaged in dubious business practices involving such “highly speculative and risky financial contracts “.


The bill comes into effect after its promulgation in France’s State Gazette. It includes a text proposed earlier this year by French regulatory authority Autorité des Marchés Financiers (AMF). To be more specific, Article 28 bans any form of communication and advertisements from investment service providers, directly or indirectly, by electronic means (email campaigns, banner ads online, radio, television, etc.), of financial instruments, which are particularly difficult to understand and potentially very risky. Only print advertising of the risky financial products is still allowed.

Even sponsorship of sports teams by forex and binary options brokers is now prohibited.

The products, who fall within the scope of the article by definition are: “binary options contracts, contracts that emphasize direct or indirect investment in the foreign exchange market or the currency market and CFDs with a leverage greater than 1:5 (or margin lower than 20%).”

The move was prompted by a by an AMF report, according to which fraudulent forex and binary options brokerages have solicited almost to €4 billion from French residents over the past 6 years.

Although the business of forex and binary options brokers is not altogether banned in France, it is highly probable that some of the regulated companies will withdraw from the local market. It is also uncertain whether the unregulated forex and binary options brokers, who crookedly scam their gullible clients, will be affected by the prohibition.


The news that the French National Assembly banned forex, binary options advertising comes as no surprise, as lately this proves to be a trend across Europe. The Belgium Financial Services and Markets Authority (FSMA) was the first EU regulator to ban public marketing (and distribution) of OTC derivatives in mid-August. After that Netherlands and Germany announced they are planning to ban advertising of binary options, forex (and CFDs).

 

TAGS: france  advertising  forex  binary options 

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