2019 Is the CFD Permanent Restriction Year

December 21, 2018 AtoZ MarketsFollowing the UK Financial Conduct Authority as an example, the Federal Financial Supervision Authority of Germany (BaFin) announced on Thursday, Dec. 20th, that it is planning to take permanent measures to intervene at the European Securities and Exchange Agency (ESMA).

What Is The New Document About?

In a statement it published on its website, BaFin explained that “they make the new rules permanent.” The federal agency constantly coordinates the level of protection in Germany with the temporary intervention of the ESMA. This reform, according to the official representatives of BaFin, is intended to prevent attempts to evade these measures by suppliers from other EU countries. The previously mentioned document called the “draft of the general administrative act” of the German financial regulator published on its website on Thursday morning. The new law, which proposes a number of rules governing the sale of contracts for difference (CFD), is almost identical to ESMA interventions. The companies have time until January 10 to respond to the new rules. However, the upcoming Christmas holidays may slow down the process of formulating a response to the BaFin reform. Anyway, most people, from now until the beginning of January, will celebrate the winter festivals.

BaFin Is Not a Fan of Retailers

According to financial analysts, BaFin, like the French Autorité des Marchés Financiers, more than any other regulators, is outwardly opposed towards the retail market. For example, over the past two weeks, the German regulator has published two long documents that advise retail customers on how to avoid fraud with CFDs and currency brokers. Thus, according to the financial experts, the decision of the German regulator to take measures on the intervention of ESMA in the product permanent is not surprising. According to BaFin the rules limiting leverage and limited marketing opportunities for brokers were supposedly to be temporary and still need to be updated by ESMA every three months. However, according to the industry representatives, the ESMA or national regulators simply will not allow measures “to peter out and not renew them”. Instead, apparently with the help of bureaucratic means, national regulators will find time to independently adopt the rules and, of course, make them permanent.

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