ESMA product intervention measures

On 27 March 2018 ESMA agreed on temporary product intervention measures on the provision of Contracts for Differences and Binary Options to retail clients. These measures were formally adopted by ESMA on 1 June 2018.  

Binary options

Main documents:

• 1 June 2018, ESMA35-43-1135 ESMA’s Product Intervention Decisions in relation to contracts for differences and binary options : On 22 May 2018, the European Securities and Markets Authority (ESMA) adopted two Decisions under Article 40 of Regulation (EU) No 600/2014: 1. to restrict the marketing, distribution or sale of contracts for differences (CFDs) to retail clients; and 2. to prohibit the marketing, distribution or sale of binary options to retail clients.
• 2 October 2018, ESMA35-43-1391 ESMA’s Product Intervention Renewal Decision in relation to binary options : On 21 September 2018, the European Securities and Markets Authority (ESMA) adopted a Decision under Article 40 of Regulation (EU) No 600/2014 to prohibit the marketing, distribution or sale of binary options to retail clients. The Decision renews and amends ESMA Decision (EU) 2018/795.
• 9 November 2018, ESMA71-99-1057 ESMA renews binary options prohibition for a further three months from 2 January 2019
• 18 February 2019, ESMA71-99-1057 ESMA renews binary options prohibition for a further three months from 2 April 2019: The European Securities and Markets Authority (ESMA) has agreed to renew the prohibition of the marketing, distribution or sale of binary options to retail clients, in effect since 2 July 2018, for a further three-month period. ESMA has carefully considered the need to extend the intervention measure currently in effect. It considers that a significant investor protection concern related to the offer of binary options to retail clients continues to exist. ESMA has therefore agreed to renew the measure from 2 April 2019 on the same terms as the previous renewal decision that started to apply on 2 January 2019.

Contracts for Differences

Main Documents:

• 1 June 2018, ESMA35-43-1135 ESMA’s Product Intervention Decisions in relation to contracts for differences and binary options : On 22 May 2018, the European Securities and Markets Authority (ESMA) adopted two Decisions under Article 40 of Regulation (EU) No 600/2014: 1. to restrict the marketing, distribution or sale of contracts for differences (CFDs) to retail clients; and 2. to prohibit the marketing, distribution or sale of binary options to retail clients.
• 28 September 2018, ESMA71-99-1041 ESMA to renew restriction on CFDs for a further three months: The European Securities and Markets Authority (ESMA) has agreed to renew the restriction on the marketing, distribution or sale of contracts for differences (CFDs) to retail clients, in effect since 1 August, from 1 November 2018 for a further three-month period.
• 27 March 2019, ESMA71-99-1130 ESMA to renew restrictions on CFDs for a further three months from 1 May 2019: The European Securities and Markets Authority (ESMA) has agreed to renew the restrictions on the marketing, distribution or sale of contracts for differences (CFDs) to retail clients, in effect since 1 August, from 1 May 2019 for a further three-month period. ESMA has carefully considered the need to extend the intervention measures currently in effect. ESMA considers that a significant investor protection concern related to the offer of CFDs to retail clients continues to exist. It has therefore agreed to renew the measures from 1 May 2019 on the same terms as the previous renewal decision that started to apply on 1 February 2019.