On the same day as the Central Bank of Ireland confirmed that it would be permanently banning binary options and placing restrictions on the marketing and sale of contracts for difference (CFDs), the European Securities and Markets Authority issued five positive opinions on the introduction of similar rules by other national regulators across Europe.
Over the past couple of months Czech, Slovak, and Estonian regulators have all introduced rules that mirror those introduced by the pan-European regulator last August.
That means bans on the sale and marketing of binary options to clients in or out of the jurisdiction covered by the regulator.
It also means Leverage caps and marketing restrictions for CFD brokers. Firms are likely to be capped at 30:1 on major currency pairs, 20:1 for exotics and 2:1 for Cryptocurrencies .
On top of that, they’ll be forbidden from offering welcome bonuses to their clients. Risk warnings will also be mandatory on any information they release that is intended for clients.
Great joy
And, of course, ESMA is extremely pleased that this is happening.
Written from the dark confines of their bureaucracy-loving offices in Paris, the pan-national regulator issued five legal opinions this Wednesday, fawning over the Cyprus-destroying rules that the Eastern European regulators have put in place.
In each case, ESMA said that the rules implemented were “justified and proportionate.” The regulator added that it expects all national regulators to implement rules that are as strict, if not more, than those brought in by last year’s product intervention measures.
