The French financial regulatory watchdog Autorité des Marchés Financiers (AMF) has just announced that the country is going to introduce a ban on the online advertisement of forex and binary options products in the country. The move was largely expected after Finance Magnates warned about the prospect earlier this year in May.
fraudulent forex and binary options brokerages have solicited close to €4 billion from French residents
The regulator announced a set of consultations on the bill which is designed to limit the advertisement of highly speculative and risky financial contracts. The consolation period will be in effect until the 30th of September, when the full list of speculative products will be published.
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The regulation will include binary options contracts, offerings which are directly or indirectly related to forex and some CFDs where the leverage is greater than 1:20.
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In the coming quarters business operations for retail brokerages in France could become very difficult. In the face of such limitations some companies may ultimately choose to pull out of the market. Already last night, Finance Magnates exclusively reported on 24option’s website becoming unaccessible in France.
The move was prompted by a report by the AMF to the country’s Parliament, and President Francois Hollande. According to the 140 page report, fraudulent forex and binary options brokerages have solicited close to €4 billion from French residents over the past 6 years.
The joint efforts of a number of French regulatory agencies have failed to produce adequate results and the number of complaints by French residents has been rapidly climbing since 2011. The legislative bodies in France will implement a new regulation that will introduce the advertising ban electronically.
The ban on electronic advertisement includes all forms of media – email campaigns, banner ads online, radio, television, etc. The ban will enter into effect after the Parliament votes on the introduction of the new law aiming to regulate competition and rein in certain businesses.
The legal way in which the suspension of advertisement is likely to be framed is anti-competition legislation aiming to keep in touch with rapidly evolving digital technology. This way French authorities will be able to go around the financial regulatory framework which permits such products.