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France’s financial markets regulator, the AMF, has announced that the ban on electronic advertising of forex and binary options products, also extends to the recently appeared derivatives with cryptocurrencies as an underlying asset. Those include forex contracts with an end-of-day maturity (rolling spot forex), CFDs and binary options.
Such products are increasingly offered by many regulated forex brokers as a convenient way to speculate on the prices of the cryptocurrencies, without having to actually obtain the asset.
The AMF has conducted an analysis on those products and has reached the conclusion that a cash-settled cryptocurrency contract may qualify as a derivative, despite the legal qualification of a cryptocurrency.
Hence, online platforms which offer cryptocurrency derivatives fall within the scope of MiFID 2 and must therefore comply with the authorization, conduct of business rules, and the EMIR trade reporting obligation to a trade repository. “Above all, these products are subject to the provisions of the Sapin 2 law, and notably the ban of advertisements for certain financial contracts,” the AMF noted.
The AMF proposed a ban on advertising of forex, CFDs and binary options via electronic means in the summer of 2016 and the Sapin 2 bill was passed by the French National Assembly in the autumn.
The bill forbids the advertising of “highly speculative and risky financial contracts“ in 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.