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.

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