Another regulator in Europe is set to make the European Securities and Markets Authority’s (ESMA) product intervention measures permanent – Austria’s Financial Market Authority (FMA).
This Monday ESMA issued two positive opinions to the Austrian regulator’s proposed product intervention measures on binary options and contracts for differences (CFDs)
The Austrian regulator wants to make the product restrictions for both binary options and CFDs permanent. Overall, the regulation will be the same as ESMA’s measures, with slight adjustments.
Introduced last year, those rules, which will be familiar to most of our readers, banned binary options and put caps on leverage available to retail customers trading in CFDs and foreign exchange (FX).
In regards to binary options, “The FMA informed ESMA that the national measure is the same as ESMA’s measure at national level, with the difference that the national measure would not expressly prohibit participating in circumvention activities.”
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For CFDs, the Austrian watchdog has proposed some small changes, which are to: “(i) include minor amendments to several of the risk warnings in ESMA’s measures; (ii) include a definition of virtual currencies; and (iii) not expressly prohibit participating in circumvention activities.”
With EMSA giving the FMA the green light to proceed with the national measures, they are now expected to come into effect at the end of this month on the 30th of May.
FMA Follows in the Footsteps of Other Regulators
The FMA is the most recent financial regulator to make ESMA’s temporary product intervention measures permanent. Regulators in the Netherlands, Germany, and France plan on doing the same or have done so already.
As Finance Magnates reported, Germany’s Federal Financial Supervisory Authority, otherwise known as BaFin, has stated it will make ESMA’s measures permanent.
The Financial Conduct Authority (FCA) also plans to issue its final rules that will govern the retail trading space in the summer of this year. The legislation that the British regulator wants to introduce appears to be almost exactly the same as ESMA’s.
One difference is that the FCA has said it plans on making sure products similar to CFDs, such as turbo contracts, will be included in the regulations.