Good morning. Today ESMA has announced this morning that the Board of ESMA has
agreed on measures both regarding CFDs and binary options. In the case of
binary options it concerns a prohibition on the selling, marketing, distribution
of binary options to retail investors. In the case of CFDs, it concerns a basket of measures,
a basket of restrictions, and these include for example; limits
on the leverage of CFDs, limit on the amount you can lose as a retail investor,
being such that you can never can lose more than you invested in the
CFD. Also there will be a risk warning in the case of CFDs.
These will be pan-European measures, they will apply across all 28 member states
of the European Union and subsequently they will be supervised by the 28
national regulators. ESMA has already been concerned about both CFDs
and binary options for a long time. We see that there is a lot of
consumer detriment involved in these products. Typically retail investors will lose
when they invest in CFDs and binary options. We know for example,
from studies conducted by national regulators, that in the case of CFDs in 74
percent to 89 percent of cases retail investors are losing
when they are investing in these products. Additionally, we can see that these
products are typically sold in an
aggressive way, in a in a massive way
which is inconsistent with the
complexity of these products and the
lack of transparency about these
products. So that is the main reasons why
we have taken these measures. The extent of the consumer detriment, we have
already taken some measures in the past,
including at a national level, but that
appears not to be sufficient. 
Now that the Board has agreed on these
measures, regarding CFDs and binary
options, the next step will be to adopt
these measures in all official languages
of the European Union. Then they will be
published in the Official Journal, and
there will be one month before they
start to apply in the case of binary
options, in the case of CFDs there
will be the two months application
period. After that, it will be the
responsibility of the national
supervisors to supervise those
restrictions
