Forex, CFDs, Binary Advertising Ban to Hit The Netherlands Mid-2017

The Netherlands Authority for the Financial Markets (AFM) issued its annual report for 2016. The watchdog has highlighted the risks associated with some retail investor-focused products. Binary options, Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term and CFDs contracts have been designated as “harmful investment products” and measures are expected to be taken by the Dutch government on limiting advertising.

The AFM has highlighted that the main reasons for the advertising ban is the disproportionate level of risk of losses for retail investors. The regulator is also concerned that clients may end up having residual debt as a result from excessive moves in the markets.

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To back up its decisions, the Dutch AFM is citing a study from the French regulator Authorite des Marches Financiers (AMF). The review that was conducted in 2014 by the financial sector supervisor in France found out that an average of 89 percent of investors lose money while trading CfDs and forex for an average loss of €10,887.

The AFM is also citing a study by the UK’s Financial Conduct Authority (FCA) that shows 82 percent of investors suffered losses.

Aggressive Marketing to Force a Ban from Mid-2017

The Dutch financial supervisor is expecting that the high-risk investment products will be banned from all advertising channels, starting from the middle of 2017. The Dutch Minister of Finance Jeroen Dijsselbloem expressed his worries publicly in September last year.

Since then the AFM started exploring the options how to enact an advertisement ban that culminated in an announcement in February that started a period of consultation with the binary options, forex and CFDs brokers.

A working group at the European Securities Markets Authority (ESMA) that is addressing the use of such products has been formed as a result from the public outcry on part of many EU residents.

The Dutch regulator finalizes the mention of binary options, forex and CFDs brokers with the highlight that it has been actively supporting the Cyprus Securities and Exchange Commission (CySEC CySEC The Cyprus Securities and Exchange Commission (CySEC) is a financial regulatory authority of Cyprus. CySEC is one of the key watchdog authorities for brokerages in Europe, whose financial regulations and operations comply with the European MiFID financial harmonization law.Founded in 2001, CySEC is instrumental in providing licensing and registration for forex brokers and previously binary options providers.CySEC is responsible for a variety of different functions, which includes the supervision The Cyprus Securities and Exchange Commission (CySEC) is a financial regulatory authority of Cyprus. CySEC is one of the key watchdog authorities for brokerages in Europe, whose financial regulations and operations comply with the European MiFID financial harmonization law.Founded in 2001, CySEC is instrumental in providing licensing and registration for forex brokers and previously binary options providers.CySEC is responsible for a variety of different functions, which includes the supervision Read this Term). The progress with enforcement measures which the Cypriot supervisor is making has also been outlined in the annual report of the AFM.