French parliament approves ban on forex, binary options advertising

French parliament approves ban on forex, binary options advertising

- in All News, Featured News, Regulation
french-parliament

The French National Assembly has passed the ban on the advertising of “highly speculative and risky financial contracts“. This includes binary options and some CFDs.

The Sapin II bill, which mostly deals with transparency, combating of corruption and the modernization of the French economy, was approved on November 8 by 308 votes against 171, report the French media. The bill comes into effect after its promulgation in France’s State Gazette.

According to some reports, the ban will not come into effect before mid-December or January 2017.

The bill also contains a text (Article 28 a, b) on the protection of investors that was proposed earlier this year by France’s financial regulator AMF. It bans any form of communication and advertisements from investment service providers to non-professional investors, directly or indirectly, by electronic means (email campaigns, banner ads online, radio, television, etc.), of financial instruments that are not traded on a regulated market, and which are particularly difficult to understand and potentially very risky. 

Sponsorship of sports teams by forex and binary options brokers is also prohibited.

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%).”

According to some reports, the AMF would be deciding on the products on a case-by-case basis.

Even though the activities of the forex and binary options brokers are not altogether banned, like they are in Belgium, it is highly likely that some of the regulated forex and binary options brokers will withdraw from the French market. It is also doubtful if the unregulated forex and binary options brokers in particular, who unscrupulously fleece their unsuspecting clients, will be affected by the ban.

Another country that is considering banning the advertising of forex and binary options trading is the Netherlands, while Germany is mulling to ban the activities of those brokers altogether.

 

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