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The Dutch AFM bans binary options and restricts sales of CFDs


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The Dutch Financial Markets Authority (AFM) has announced that it has taken national measures mirroring ESMA’s last year restrictions. The AFM will prohibit Binary Options and restrict the marketing, distribution or sale of CFD to retail investors.

LeapRate reminds that the new rules, formalized by ESMA in late March, came into effect:

  • Binary Options – from July 2, 2018 – a prohibition on the marketing, distribution or sale of binary options to retail investors.
  • CFDs – from August 1, 2018 – a restriction on the marketing, distribution or sale of CFDs to retail investors. This restriction consists of: leverage limits on opening positions; a margin close out rule on a per account basis; a negative balance protection on a per account basis; preventing the use of incentives by a CFD provider; and a firm specific risk warning delivered in a standardised way.

The AFM informed last month that it was going to make certain changes regarding the marketing, distribution or sale of Binary Options and CFDs to retail investors in and from The Netherlands.

As of last Friday (19 April 2019):

  • the marketing, distribution or sale of Binary Options to retail investors in and from The Netherlands is prohibited;
  • the marketing, distribution or sale of CFDs to retail investors in and from The Netherlands is restricted.

These measures are applicable to investment firms based in The Netherlands as well as to investment firms from another EU member state active in The Netherlands trough a branch or by means of the European pass porting regime.

Other than ESMA’s measures, the AFM’s product intervention measures are permanent and the AFM is one of the first European supervisors to introduce these national measures.

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The Dutch AFM bans binary options and restricts sales of CFDs

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