ESMA exercises product intervention powers

ESMA has exercised its product intervention powers under MiFIR to:

  • ban the marketing, distribution or sale or binary options to retail investors from 2 July; and
  • restrict the marketing of CFDs to retail investors from 1 August. The restrictions consist of leverage limits on opening positions, a margin close-out rule and a negative balance protection each on a per account basis, preventing CFD providers from using incentives and a requirement to provide a standardised risk warning.

ESMA must review the measures within 3 months and can then decide whether to extend them for a further 3 months.