The Financial Markets Authority (AMF)’s annual report for 2015 showed that the number of complaints received against binary options and Forex brokers reached 1,617 in 2015, up from 1,293 in 2014.
The high rise in complaints is probably just one of the reasons that AMF is launching a consultation, until 30 September 2016, on the introduction into its General Regulation of the categories of contracts targeted by the ban.
Article 28 of the “Sapin II” bill will introduce a mechanism to prohibit all forms of marketing communications addressed directly or indirectly by investment service providers, via electronic means (e-mail, online advertising banners, radio, TV, etc.), to individuals, regarding financial instruments that are particularly difficult to understand and potentially very risky. The text will enter into force after it is voted on by Parliament and enacted into law. The law stipulates that the categories of contracts targeted by the ban are to be defined in the AMF’s General Regulation.
The AMF proposes adding a heading to Book I of its General Regulation entitled “Supervisory measure on marketing communications concerning financial contracts”. It shall be worded as follows:
Under Article L. 533-12-8 of the French Monetary and Financial Code, marketing communications regarding the following financial contracts shall be prohibited:
- binary option contracts; or
- contracts that promote a direct or indirect investment in the foreign exchange market (Forex or currency market); or
- Contracts for Difference (CFD) where the leverage is greater than 1:20;
and financial contracts that have an economic effect equivalent to those stated above.