Holland details Forex and Binary Options ad ban – and it isn’t a blanket ban


AFM imposes an order for incremental penalty payments on Miscanthus Green Power B.V.

Dutch regulator Authority for the Financial Markets (AFM) has issued a new report detailing its plans to ban advertising for Forex and Binary Options products. We had reported back in September of Holland’s plan to join France in banning the advertising of leveraged trading products – or what the AFM more derisively calls ‘toxic investment products’.

However the ban, still in its proposal phase, is not a blanket ban.

The AFM has indeed proposed banning all ads for Binary Options. But as far as Forex and CFDs, the AFM only plans to ban ads for brokers/products offering more than 10x leverage. Also, brokers must offer negative balance protection in order to avoid the ad ban.

The AFM didn’t detail how exactly it would enforce the ban, since ads are often (if not usually) for brokers, not for specific products. However presumably, in order to advertise to Dutch clients, a broker would need to limit the products they offer to those Dutch clients to the ones which fit the ban.

Also presumably, brokers which choose not to advertise to Netherlands IP addresses would still be allowed by law to offer products outside the ban – Forex and CFDs beyond 10x, Binary Options… – to Dutch clients, since the ban is only an advertising ban.

The AFM is also planning on a ban on short-term ‘payday’ loans. We had reported last year that Google itself instituted a ban on payday loans in its system, after receiving a multitude of complaints regarding high interest costs and hidden fees associated with the product.

The AFM’s proposal are open for comment and consultation until April 3, 2017, after which it will gather industry opinion on the matter and render a final decision.

The AFM’s press release on the matter can be seen here (in Dutch).

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Holland details Forex and Binary Options ad ban - and it isn't a blanket ban

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