Spain intends to address regulation of “complex high-risk products” in 2017

Spain intends to address regulation of “complex high-risk products” in 2017

Do not invest more money than you can afford to lose.


The Spanish financial regulatory body, the Comision Nacional del Mercado de Valores (CNMV), said on Wednesday it plans to take steps towards high-risk investment products, including contracts for difference (CFDs). It did not specify whether it intends to impose restrictions or to ban the products altogether.

“In 2017 the CNMV plans to evaluate possible investor initiatives for complex high-risk products (such as CFDs) and regarding cold calling,” the CNMV said in a file on its website.
The regulator provided no details on the matter.

Last week, we informed you Ireland is also considering the prohibition of the sale or distribution of CFDs to retail clients in and from the country. The move in in line with the regulator’s strategy to enhance investor protection.

Other authorities, mainly throughout Europe, have also taken measures against high-risk products or consider to do so.

In late 2016, Cyprus’ CySEC and UK’s FCA announced the introduction of a default leverage cap for forex and CFDs and the ban of bonuses as a measure to attract clients.

Binary options have been another type of trading instrument that is highly attacked by regulators. In August last year, Belgium banned the distribution via online channels of over-the-counter (OTC) binary options, spot forex, and CFDs with leverage. France has also banned the online advertising of “highly speculative and risky financial contracts”, such as binary options, forex and CFDs with a leverage greater than 5:1. In addition, the Netherlands and Germany have also announced they consider the ban on the advertising of such instruments.

In the US, trading in such instruments is restricted to on-exchange execution only (via Nadex or Cantor Exchanges). Meanwhile, Quebec’s Autorite des Marches Financiers (AMF) recently proposed the prohibition of the sale of binary options to citizens in the province, becoming the first Canadian province to consider a full ban on this type of instruments.

In Israel, a place known as a hub for binary option call centers, the relevant regulator is working on regulatory changes that would enable it to ban local brokers from soliciting customers abroad. Brokers are already forbidden to offer binary option instruments within the country, but they can still target foreign investors.

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