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Dates for options ban and CFD restrictions announced

Dates for options ban and CFD restrictions announced

ESMA has finally shared the dates from which the new measures on the provision of options and CFDs in the EU will start to apply:

July 2nd (2018) — a prohibition of binary and digital options for retail investors

August 1st (2018) — CFD restrictions for retail investors in the form of:

  • Leverage limits on opening positions (30:1 for major currency pairs, 20:1 for non-major currency pairs, gold and major indices; 10:1 for commodities other than gold and non-major equity indices; 5:1 for individual equities and other reference values; 2:1 for cryptocurrencies)
  • Negative balance protection on a per account basis
  • Preventing the use of incentives by a CFD provider
  • A firm specific risk warning delivered in a standardised way
  • A margin close out rule on a per account basis

According to the MiFIR legislative framework, these rules can be introduced on a three-monthly basis, with a review for possible extension prior to the end of the current time period.

What are the next steps?

With less than a month left to promote options in Europe, you may be wondering what can be done after ESMA’s rules take effect. The good news is that restrictions will not be applied to professional traders.

If, however, your users don’t fall into this category, working with non-regulated countries can be a worthy alternative as many of them show bigger ROI percentage compared to regulated countries. For your convenience, IQoption has compiled a list of non-regulated countries to consider:iqoption list of non-regulated countries

Some more information about legislation is here:

https://www.esma.europa.eu/press-news/esma-news/esma-adopts-final-product-intervention-measures-cfds-and-binary-options