Just hours after it banned 24Option from France and months after it called for a ban on advertising of forex and binary options products, the national regulator AMF, announced that it is opening consultations on a proposal to ban the advertising of “highly speculative and risky financial contracts“ to the general public in France.
The measure would be included in the new bill, called Sapin 2, which is supposed to improve transparency, combat corruption, facilitate the modernization of the French economy.
The text proposed by the AMF would ban any form of communication and advertisements from investment service providers, directly or indirectly, by electronic means (email campaigns, banner ads online, radio, television, etc.), of financial instruments, which are particularly difficult to understand and potentially very risky. As per the definitions in the General Regulation of the AMF, the products, included in this category are: “binary options contracts, contracts that emphasize direct or indirect investment in the foreign exchange market or the currency market and CFDs with a leverage greater than 1:5 (margin lower than 20%).”
Consultations, according to the AMF, are open until September 30, when the proposed text will be finalized.
A few weeks ago, the AMF published its official annual report for 2015, which revealed that the number of complaints from forex and binary options brokers have soared through the year. The document also quoted data of the Paris prosecutor’s office, according to which in the past six years French investors have lost EUR 4 billion to fraudulent forex and binaries brokers.
The Sapin 2 draft has already been tabled in France’s National Assembly. The bill mostly deals with anti-corruption measures, the introduction of a registry of the interest groups and lobbyists and legal protection of whistleblowers. Another section of the proposed law deals with “modernization of the French economy” and more effective financing of the real economy. It is also increasing the powers of the financial regulation authorities and introduces a ban on advertising for internet platforms that offer high risk financial instruments.