CySEC warns forex brokers to heed new Spanish rules for leveraged FX and binary options trading


cnmv spain forex regulation

Cyprus financial regulator CySEC has issued a circular to CIF licensed brokers on the island regarding the new rules recently enacted in Spain for forex and binary options trading.

As was reported at LeapRate back in late March, Spanish regulator CNMV issued new rules for brokers who offer leverage of more than 10x to Spain-based clients, or who offer any type of binary options trading.

In particular, the CNMV now requires brokers to expressly warn retail investors resided in Spain about the risk and complexity of the abovementioned products. The CNMV considers that these warnings, which include a handwritten statement made by the client (or alternatively a recorded oral or typewritten statement), are needed to ensure that all Spanish investors have the same level of protection and also to ensure a level playing field for all participants in the Spanish market.

The CySEC warning highlights the increasing complexity of operating an EU-licensed, MiFID-passported brokerage in Europe today. With different country regulators setting different rules and standards (CySEC, FCA, AMF, BaFIN…), each broker must ensure that their advertising material and products match each individual market.

The full text of the CySEC circular reads as follows:


TO: Cyprus Investment Firms

FROM: Cyprus Securities and Exchange Commission

DATE: 17 May 2017

CIRCULAR No: C210

SUBJECT: New requirements of the Spanish Securities and Exchange Commission (the “CNMV”) regarding the provision of warnings on complex financial instruments to retail clients resided in Spain.

The Cyprus Securities and Exchange Commission (the “CySEC”) hereby draws the attention of the Cyprus Investment Firms (the “CIFs”) to CNMV’s new requirements regarding financial contracts for difference (CFDs) and rolling-spot foreign exchange with a leverage level greater than 10:1, or binary options.

In particular, the CNMV requires firms to expressly warn retail investors resided in Spain about the risk and complexity of the abovementioned products. The CNMV considers that these warnings, which include a handwritten statement made by the client (or alternatively a recorded oral or typewritten statement), are needed to ensure that all Spanish investors have the same level of protection and also to ensure a level playing field for all participants in the Spanish market.

For more information on CNMV’s requirements, see below as Annex the texts of the warnings and handwritten statements.

CySEC herewith advises CIFs to consult with their legal consultants regarding the legal actions required to ensure compliance with CNMV’s requirements and urges CIFs, to whom these measures apply, to adapt their procedures and systems so as to be able to issue these warnings and obtain the handwritten or oral statement as soon as practicable, and at all events within one month from the date of this circular.

Yours sincerely,

Demetra Kalogerou

Chairman of the Cyprus Securities and Exchange Commission

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CySEC warns forex brokers to heed new Spanish rules for leveraged FX and binary options trading

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