Dutch Regulator to Make ESMA's CFD Rules Permanent
- It marks the first time the AFM has used product intervention powers handed to it by MiFID II
Following in the footsteps of several other European regulators, the Dutch Financial Markets Authority (AFM) said on Thursday that it plans to make European regulations governing contracts for difference (CFDs) and binary options permanent.
Currently, the rules, which were Introduced by the European Securities and Markets Authority (ESMA) last August, must be renewed by the pan-European regulator every three months.
As a result, some regulators have decided to make them permanent. In December of last year, the UK’s Financial Conduct Authority said it was likely to do so. That was followed by similar announcements from BaFin in Germany and, last month, the French Autorité des Marchés Financiers.
Now the Dutch AFM has joined those three regulators by saying that it too will make ESMA’s regulations permanent.
“As of 19 April 2019 the marketing, distribution or sale of binary options to retail investors in and from the Netherlands is prohibited,” said the regulator in a statement. “The marketing, distribution or sale of CFDs to retail investors in and from the Netherlands is restricted.”
Going nowhere
Most of our readers will be familiar with the composition of ESMA’s product intervention measures and thus the new Dutch regulations too.
As the AFM’s statement indicates, they put a total ban on the sale of binary options. They also place 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 caps, marketing restrictions and a ban on introductory bonuses on CFD brokers.
The AFM’s decision to make the ban permanent is also an interesting one as it marks the first time the Dutch regulator has used the product intervention powers handed to it by MiFID II and MiFIR - two pieces of European Union 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 that were introduced at the start of last year.
It’s also an indication of what many in the retail trading industry were expecting to happen but hoped wouldn’t, namely that the ‘temporary’ product intervention measures introduced by ESMA last year are going to be around for the foreseeable future.
Following in the footsteps of several other European regulators, the Dutch Financial Markets Authority (AFM) said on Thursday that it plans to make European regulations governing contracts for difference (CFDs) and binary options permanent.
Currently, the rules, which were Introduced by the European Securities and Markets Authority (ESMA) last August, must be renewed by the pan-European regulator every three months.
As a result, some regulators have decided to make them permanent. In December of last year, the UK’s Financial Conduct Authority said it was likely to do so. That was followed by similar announcements from BaFin in Germany and, last month, the French Autorité des Marchés Financiers.
Now the Dutch AFM has joined those three regulators by saying that it too will make ESMA’s regulations permanent.
“As of 19 April 2019 the marketing, distribution or sale of binary options to retail investors in and from the Netherlands is prohibited,” said the regulator in a statement. “The marketing, distribution or sale of CFDs to retail investors in and from the Netherlands is restricted.”
Going nowhere
Most of our readers will be familiar with the composition of ESMA’s product intervention measures and thus the new Dutch regulations too.
As the AFM’s statement indicates, they put a total ban on the sale of binary options. They also place 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 caps, marketing restrictions and a ban on introductory bonuses on CFD brokers.
The AFM’s decision to make the ban permanent is also an interesting one as it marks the first time the Dutch regulator has used the product intervention powers handed to it by MiFID II and MiFIR - two pieces of European Union 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 that were introduced at the start of last year.
It’s also an indication of what many in the retail trading industry were expecting to happen but hoped wouldn’t, namely that the ‘temporary’ product intervention measures introduced by ESMA last year are going to be around for the foreseeable future.