ESMA Extends Restrictions for Binary Options

The European Securities and Markets Authority (ESMA ESMA European Securities and Markets Authority (ESMA) is an independent Authority of the European Union that is responsible for the safety, security, and stability of the European Unions’ financial system and is charged with protecting the public. The European supervisory authority for the securities sector, ESMA was established on 1 January 2011. The European Securities and Markets Authority is an independent EU authority based in Paris. It aims to contribute to the effectiveness and stability of t European Securities and Markets Authority (ESMA) is an independent Authority of the European Union that is responsible for the safety, security, and stability of the European Unions’ financial system and is charged with protecting the public. The European supervisory authority for the securities sector, ESMA was established on 1 January 2011. The European Securities and Markets Authority is an independent EU authority based in Paris. It aims to contribute to the effectiveness and stability of t Read this Term) announced on Monday that it has agreed to extend the restrictions for binary options which prohibits the Marketing Marketing Marketing is defined as the business process of identifying, anticipating and satisfying customers' needs and wants.This is a crucial element of any operation or brokerage in the financial services space. Well-funded marketing campaigns are instrumental to the survival and longevity of these companies in an increasingly competitive industry.Within the forex space, marketers perform a wide range of functions to help procure, secure, or retain clients.In particular, newer forex brokers also have t Marketing is defined as the business process of identifying, anticipating and satisfying customers' needs and wants.This is a crucial element of any operation or brokerage in the financial services space. Well-funded marketing campaigns are instrumental to the survival and longevity of these companies in an increasingly competitive industry.Within the forex space, marketers perform a wide range of functions to help procure, secure, or retain clients.In particular, newer forex brokers also have t Read this Term, distribution or sale of binary options to retail investors.

The decision, which does not come as a surprise to the markets, was adopted on September 21, 2018, and will be effective from this Tuesday, October 2, 2018, for a period of three months until the end of this year.

The pan-European regulator initially announced that it would renew its restrictions on binary options back in August this year. At the same time, the regulator also announced some changes to the renewal.

In August, ESMA identified that some binary options do not pose a significant threat to retail investors and are therefore no longer included in the scope of the measures. Specifically, the watchdog decided that binary options that are long-term investments (at least 90 days), that are accompanied by a prospectus and that are completely hedged by the provider or another entity in the same group, are less likely to cause significant harm to investors.

In addition, in August the regulator has also stated that binary options which have one of two predetermined payouts at the end of the term, neither of which is less than the initial investment of the trader, will be excluded.

ESMA Renews CFD Restrictions for Retail Traders

The renewal of the binary options restrictions follows on the back of the heels of the regulator announcing on Friday that it will extend its restrictions on the sale, distribution, and marketing of contracts for differences (CFDs), as Finance Magnates reported.

The renewal will come into effect from November 1, 2018, and will last for three months until January next year. According to the rationale from ESMA, the watchdog extended the measures because “significant investor protection concern related to the offer of CFDs to retail clients continues to exist”.