Binary Options Ban Renewed By ESMA

Any brokers still hoping for a repeal of the product intervention measures introduced earlier this year that prohibit the sale of binary options will have had those dreams crushed this week.

The European Securities and Markets Authority (ESMA ESMA European Securities and Markets Authority (ESMA) is an independent Authority of the European Union that is responsible for the safety, security, and stability of the European Unions’ financial system and is charged with protecting the public. The European supervisory authority for the securities sector, ESMA was established on 1 January 2011. The European Securities and Markets Authority is an independent EU authority based in Paris. It aims to contribute to the effectiveness and stability of t European Securities and Markets Authority (ESMA) is an independent Authority of the European Union that is responsible for the safety, security, and stability of the European Unions’ financial system and is charged with protecting the public. The European supervisory authority for the securities sector, ESMA was established on 1 January 2011. The European Securities and Markets Authority is an independent EU authority based in Paris. It aims to contribute to the effectiveness and stability of t Read this Term), the regulator responsible for implementing the rules, announced on Friday that it would be renewing the ban on binary options for another three months.

That three-month period will come into effect as soon the current ban, which will also last for a total of three months, comes to an end on January 2, 2019.

In a statement released on Friday, ESMA said that:

“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.”

That decision was reached, according to the regulator, after a meeting of the regulator’s Board of Supervisors on Wednesday.

ESMA - No Love for Binary Options

It was always going to be the case that the regulator continued its prohibition of binary options trading.

As with 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, amongst other restrictions on contracts-for-differences (CFDs) trading, ESMA has given no indication that its position has changed with regard to binary options.

Some brokers may have been dreaming of a total rescinding of the ban after the last renewal announcement bank in August. When that was released, the regulator said that long-term investments, which it defined as over 90 days, were not a threat to retail investors.

Most brokers, however, aren’t interested in such products. Their focus has almost entirely been on swift, instant-reward trading that, in most cases, is designed to screw over the client.

And those sorts of products are unlikely to be available to brokers again in the near future.

Unless it puts a permanent policy in place, something that it may do in the next couple of years, ESMA can continually renew the ban on binary options and that, almost certainly, is exactly what the regulator will do.