Irish Regulator to Make Binary Ban, CFD Restrictions Permanent

The Central Bank of Ireland has become the latest national regulatory authority to permanently implement the product intervention measures introduced by the European Securities and Markets Authority last August.

Citing client losses and a desire to protect retail traders, the Irish regulator said that it would be putting into law rules that are very much akin to the ones set out by ESMA last year.

That means binary options are finished in Ireland. No one can sell the products to clients inside or outside the country.

“The Central Bank is banning the sale of binary options to retail investors as we consider them a fundamentally flawed product, which have no place in the investment plans of retail investors,” said Derville Rowland, director general of financial conduct at the Central Bank of Ireland. “They are no more an investment than betting on a horse.”

Leverage caps and risk warnings

Alongside that ban on binary options are a series of prohibitions on the marketing, sale, and trading of contracts for difference (CFDs) that will be familiar to most of our readers.

Leverage caps are in line with ESMA’s product intervention measures. Major currency pairs are capped at 30:1, Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term at 2:1 and gold, indices and exotic currencies at 5:1.

Firms are also banned from certain marketing practices, such as welcome bonuses. They must also provide Negative Balance Negative Balance In its most basic form, a negative balance represents an account balance in which debits exceed credits. A negative balance indicates that the account holder owes money. A negative balance on a loan indicates that the loan has not been repaid in full, while a negative bank balance indicates that the account holder has overspent.In the retail brokerage space, this phenomenon occurs when a position’s losses in an account exceeds the available margin on hand from a given trader. When a trader place In its most basic form, a negative balance represents an account balance in which debits exceed credits. A negative balance indicates that the account holder owes money. A negative balance on a loan indicates that the loan has not been repaid in full, while a negative bank balance indicates that the account holder has overspent.In the retail brokerage space, this phenomenon occurs when a position’s losses in an account exceeds the available margin on hand from a given trader. When a trader place Read this Term protection and put risk warnings on any material that is sent to their clients.

“Based on our ongoing work on CFDs at a domestic and EU level, we have concluded that retail investors must be protected from excessive levels of leverage, which can result in unexpectedly high levels of losses and from the risk of losing more money than they put into their CFD account,” added Rowland.

“We also want to stop firms using incentives to entice retail investors to trade in these short term, speculative products.’’