The Cyprus Securities and Exchange Commission (CySEC) has issued a notice directing the attention of Cyprus Investment Firms (CIFs) to the resolution by the Comisión Nacional del Mercado de Valores (CNMV) on July 11, 2023, concerning product intervention measures related to Contracts for Difference (CFDs) and other leveraged products when offered to retail investors in Spain.

Regulatory Measures to Protect Spanish Retail Investors

CySEC urges financial firms to comply with the product intervention measures set by CNMV. The CNMV's resolution, effective from August 3, 2023, introduces a set of restrictions and prohibitions aimed at safeguarding retail investors in Spain. These measures include the following:

• Advertisement Restrictions: The CNMV resolution prohibits the advertisement of CFDs and other leveraged instruments to retail investors.

• Remuneration and Sales Techniques: It places restrictions on certain remuneration policies and sales techniques related to these financial products.

• Intervention Measures: The CNMV's resolution establishes intervention measures to regulate the marketing, sale, and distribution of other leveraged instruments to retail investors.

Countdown to Compliance: CNMV's CFD Measures to Take Effect Soon

It is important to note that these measures apply to all entities authorized to provide investment services in Spain. This includes any marketing, distribution, and sale of CFDs and leveraged products to retail investors in Spain, regardless of whether the investment firm has a branch in Spain or operates under the freedom to provide services without establishing a physical presence in the country.

CySEC, in response to the CNMV's resolution, strongly encourages all CIFs engaged in marketing, distributing, and selling CFDs and other leveraged products to retail investors in Spain to promptly take all necessary actions and measures to ensure strict compliance with the CNMV's regulatory requirements.

These actions come as part of a broader trend in the European financial industry where regulatory bodies are actively working to enhance investor protection, especially for retail investors. As such, there will be stricter rules and controls on complex and high-risk financial products.

CIFs operating in Spain are urged to closely monitor and adapt to these evolving regulatory landscapes to maintain their compliance and safeguard the interests of retail investors in the region.