AMF permanently bans CFD marketing in summer 2019

May 7, 2019 | AtoZ Markets - The French financial regulator Autorité des marchés financiers (AMF), released its annual report this Tuesday. The report indicates that AMF will be making the European Securities and Markets Authority’s product intervention measures, introduced last August, permanent.

French AMF fulfills its promises about ESMA rules

In March the French financial regulator announced that it is preparing to take measures that will restrict the activities and marketing of CFDs and ban binary options in the country. In its March statement, the French authority noted that it does not want to rely on European Securities and Markets Authority(ESMA) continually renewing the rules every three months.

The ESMA has already renewed its product intervention measures three times against binary options and twice on CFDs.

Back then AMF was looking forward to banning binary options after years of controversies about the product and also put necessary restrictions on CFDs for retail clients. And in its latest annual report, the French financial watchdog said that the rules will be extended in the summer of this year by “national measures.” It seems that the French authority decided to take its promises seriously and started taking actions.

The AMF also pointed on the six institutions, situated mainly in the European Union, have not respected ESMA’s regulations.

The financial authority warned the regulators in these countries to make sure the regulations are adhered to. It remains unclear what these companies are or what countries they are based in.

AMF remains harsh about certain financial products

Two large sections of the AMF report cover the retail trading market regulations. The one entitled as “Protection Against Unsuitable and Toxic Products” represents the strict view of the AMF on the retail brokers and certain financial products, including CFD, binary options and even crypto.

The negative attitude toward these trading instruments was easily noticeable during previous AMF annual report presentation in 2018.  

Then, the president of the AMF Robert Ophèle referred to binary options, CFDs as ‘toxic,’ and put the same brand on cryptocurrencies. Ophèle also called cryptos a new form of ‘toxic investment’ and pointed on the difficulties of enforcing laws against ‘toxic’ products without pan-European legislation.

The French regulator is concerned about cyber criminals

The other section of the annual AMF report entitled as “French Savers Are the Target of Cyber Criminals,” is largely concerned itself with retail trading companies. The financial regulator of France noted, that fraudsters are “moving away from selling binary options and foreign exchange (FX) and towards cryptocurrencies.

In its report from 2016, the AMF mentioned 3,768 requests that the regulator received from retail investors pertaining to FX and binary options scams. The same year 18 requests were related to cryptocurrencies.

It is notable, that in 2018 only 968 consumer requests were related to FX and binary options. However, 2600 demands were made regarding cryptocurrencies. Speaking of potential scammers, the financial regulator stated in its report:

The rapid and large-scale deployment of these offerings and their impact has led to questions about phishing techniques deployed by networks of clearly structured, organized and agile individuals. Banners on the internet attract users to web pages advertising information on the latest trends in investments but, in reality, their only intention is to collect the personal data of retail investors.”

France, not the first to make ESMA rules permanent

In April the Dutch financial regulator AFM announced its plans to make ESMA intervention measures toward binary options and CFDs permanent. It is obvious, that the AFM has taken the decision to follow the steps of three other European regulators, who have already announced their plans to make ESMA’s restrictions permanent.

Back in 2018, on November 30, the German Federal Financial Supervisory Authority (BaFin) started a permanent ban on binary options, giving brokers and clients time until the 20th of December 2018.

In April 2019 the UK Financial Conduct Authority (FCA) confirmed the permanent ban on selling, marketing or distributing binary options to retail customers. As for the CFDs, the UK FCA decided that new CFD regulations that will govern the retail trading industry will be delayed until summer 2019.

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