ESMA CFD Rules Become Permanent
The Dutch Financial Markets Authority is mimicking several other regulators in Europe by revealing on Thursday, April 18, 2019, that they will be making the laws on CFDs and Binary options permanent. The rules currently in effect were put forth by the European Securities and Market Authority during August 2018. The DFMA and ESMA have been working together so that these rules can become permanent.
The Dutch regulator wasn’t the first to make these laws permanent. It was only in December of 2018, three months after the ESMA launched these new laws, that the UK Financial Conduct Authority created the same requirements for local regulation and made them permanent. Other regulators who have done the same thing include the German regulator BaFin and the French Regulator Autorité des Marchés Financiers.
The Dutch Financial Markets Authority made a public statement on this announcement: “As of 19 April, 2019 the marketing, distribution or sale of binary options to retail investors in and from the Netherlands is prohibited. The marketing, distribution or sale of CFDs to retail investors in and from the Netherlands is restricted.”
ESMA & DFMA Intervention Measures
Finance & blockchain enthusiasts are familiar with the product intervention measures that have been enacted by the ESMA. As of today, the same intervention measures will be used by the DFMA. As stated in the announcement, there has been a total ban for the sale of binaries, and they’ve enacted leverage caps. There’s also marketing restrictions for CFD Brokers as of today.
The permanent ban in an odd decision, it marks the first time that this Dutch regulator has used their legal powers. The retail trading industry was expecting this to happen but had hoped and prayed it wouldn’t. It seems these “Temporary” laws will be permanent for the foreseeable future.