Austria's FMA Given Green Light to Make ESMA Rules Permanent

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 Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term 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 Leverage In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders Read this Term 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.”

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.