ESMA leaves product intervention to Member States

ESMA has decided not to renew its prohibition on marketing, distribution or sale of binary options to retail clients, and the ban expired on 1 July. Its reasoning is that most Member States now impose their own permanent product intervention measures that are at least as stringent as ESMA’s, so there is no need for ESMA’s ban.

To support its statement, ESMA has issued opinions on the measures Member States have taken, including an opinion on the UK’s measures published on 2 July.  It generally thinks the UK’s measures are justified and proportionate except that:

• FCA should apply its restrictions on CFD-like options to providers who sell into the UK to retail clients, and not just to those marketing in and from, and providing them from the UK; and
• FCA’s application of a 30:1 leverage limit for certain CFDs, despite FCA’s explanation, it not preferable to ESMA’s blanket 5:1 leverage limit.