Darwinex will cease offering Contracts for Difference (CFDs) to new retail clients and residents in Spain on July 31, 2024, due to what the company attributed to stringent regulatory measures imposed by the regulators.

Impact on Darwinex's Services

In a statement today (Wednesday), the company cited Comisión Nacional del Mercado de Valores' (CNMV) resolution on CFDs, which was announced in July last year. This resolution mandates significant changes in how financial products are offered to retail clients in Spain.

Darwinex mentioned that its latest decision aligns with its commitment to comply with the CNMV's directives and aims to protect inexperienced investors from high-risk financial instruments.

Given that CFDs and foreign exchange (FX) constitute a major part of Darwinex's business, the company said that it finds it challenging to prevent its branding from reaching Spanish retail clients who may lack the necessary knowledge or experience. Thus, Darwinex has been compelled to stop offering these instruments to new clients.

According to the firm, new retail clients and residents of Spain who attempt to open a CFD account after July 31, 2024, are affected. New traders and investors seeking access to Darwinex's CFD offerings after the deadline are also affected.

Alternative Offerings for New Clients

However, the new directive does not affect existing clients with open CFD accounts or those who complete the account opening process before the cutoff date. Darwinex's professional clients will also not be affected by these changes. The company mentioned that new clients impacted by the new restrictions can still access a range of assets on DARWIN accounts, including stocks, ETFs, and futures.

Last year, Darwinex disclosed its integration with Interactive Brokers to enable users to trade assets, such as shares, futures, and exchange-traded funds, on Interactive Brokers. This move followed the company’s launch of Darwinex Zero, a subscription-based trading platform available worldwide.

According to the company, the Darwinex platform offers seed capital to successful traders and takes a share of their profits through the new platform. Initially, Darwinex provided retail trading services with margin forex and CFDs based on multiple asset classes.