On 18 January 2018, the European Securities and Markets Authority (ESMA) issued a consultation paper[1] on applying potential product intervention measures to contracts for differences (CFDs) and binary options sold to retail clients.
ESMA is consulting on the possible use of its product intervention powers under Article 40 of the Markets in Financial Instruments Regulation (MiFIR) to address risks to investor protection arising from these products. In particular, ESMA is considering measures to:
- Prohibit the marketing, distribution and sale of binary options to retail clients.
- Restrict the marketing, distribution and sale to retail clients of CFDs, including rolling spot forex.
- Restrict or prohibit the marketing, distribution and sale to retail clients of CFDs on cryptocurrencies.
ESMA is seeking responses from investors, firms and other interested parties on the impact of the measures under consideration. ESMA’s call for evidence is open for consultation until 5 February 2018.