ESMA Formally Extends Binary Option Restrictions, Again
- The announcement comes just days after ESMA said it will extend its temporary restrictions on selling CFDs.
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) has published a notice on its website this Friday, that on December 14 of this year, it has formally adopted a decision to renew the prohibition of 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.
This news will come as no surprise to many of you, as the regulator previously announced it was going to renew the prohibitions on binary options from January 2, 2019, for three months back in November, as Finance Magnates reported at the time.
In November, the regulator said the motivation for its move was: “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.”
Today, however, the notice merely reaffirms the conditions of the prohibition, stating that a binary option is a derivative that meets the following conditions:
(a) it must be settled in cash or may be settled in cash at the option of one of the parties other than by reason of default or other termination event;
(b) it only provides for payment at its close-out or expiry;
(c) its payment is limited to:
(i) a predetermined fixed amount or zero if the underlying of the derivative meets one or more predetermined conditions; and
(ii) a predetermined fixed amount or zero if the underlying of the derivative does not meet one or more predetermined conditions.
ESMA continues its restrictions for CFDs
The announcement comes just days after the European regulator announced that it will also extend its temporary restrictions on selling contracts for differences (CFDs) to retail customers for a further three-month period, saying it was still concerned about investor protection, as Finance Magnates reported.
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.
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) has published a notice on its website this Friday, that on December 14 of this year, it has formally adopted a decision to renew the prohibition of 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.
This news will come as no surprise to many of you, as the regulator previously announced it was going to renew the prohibitions on binary options from January 2, 2019, for three months back in November, as Finance Magnates reported at the time.
In November, the regulator said the motivation for its move was: “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.”
Today, however, the notice merely reaffirms the conditions of the prohibition, stating that a binary option is a derivative that meets the following conditions:
(a) it must be settled in cash or may be settled in cash at the option of one of the parties other than by reason of default or other termination event;
(b) it only provides for payment at its close-out or expiry;
(c) its payment is limited to:
(i) a predetermined fixed amount or zero if the underlying of the derivative meets one or more predetermined conditions; and
(ii) a predetermined fixed amount or zero if the underlying of the derivative does not meet one or more predetermined conditions.
ESMA continues its restrictions for CFDs
The announcement comes just days after the European regulator announced that it will also extend its temporary restrictions on selling contracts for differences (CFDs) to retail customers for a further three-month period, saying it was still concerned about investor protection, as Finance Magnates reported.
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.