The European Securities and Markets Authority (ESMA) has made an announcement today that is not likely to surprise many market participants – it has agreed to extend its ban on binary options for another three month period.
This is the third time the financial regulator has extended the prohibitions, which were originally implemented back in 2018 on July 2. This time, the three months will be extended from April 2, 2019, until July 2, 2019. However, if history is anything to go by, this ending date is likely to be extended yet again.
The regulations by ESMA prohibit the marketing, distribution or sale of binary options to retail clients in the European Union. The latest extension will follow the same rules as the period before it.
The FBS CopyTrade Team Introduces New ‘Risk-free Investments’ FeatureGo to article >>
As for its reasoning, the watchdog repeated the same statement that it used for the previous extension, which is: “ESMA has carefully considered the need to extend the intervention measure currently in effect. It considers that a significant investor protection concern related to the offer of binary options to retail clients continues to exist.”
According to ESMA, the decision was reached after a meeting of its Board of Supervisors, which was held last week on February 14, 2019. Furthermore, it intends to adopt the renewal measures in the official languages in the EU in the coming weeks.
This will be followed by ESMA posting an official notice on its website and the publishing of the measure in the Official Journal of the EU, the statement said.
Will ESMA Extend Binary Options Indefinitely?
As Finance Magnates has previously highlighted, theoretically, ESMA can continue to renew its prohibitions on both binary options and CFDs until the end of time. In the next couple of years the regulator may put a permanent policy in place, but until then, it is highly likely the regulator will continue to renew the restrictions indefinitely.