Today, the Cyprus Securities and Exchange Commission (CySEC) has urged CIFs to comply with the new Belgian regulation. Does this mean that Belgian traders cannot trade anymore, in or outside Belgium?
17 August, AtoZForex – Earlier this week, AtoZ Forex learned that the Financial Services and Markets Authority (FSMA), will soon issue a ban on all leveraged OTC derivatives, binary options and CFDs. As the Belgian authorities have passed this legislation on the 21st of July , to repel the many scams, unauthorised firms and frauds in the market.
The FSMA announced that from the 18th of August, the Belgium regulator these financial instruments will be banned for retail traders. Following this announcement of the FSMA, the Cyprus Securities and Exchange Commission (CySEC) has issued a warning today to all Cyprus Investment Firms (CIFs).
CySEC: CIFs have to comply with Belgian regulation
The regulation was drawn by the FSMA and has been approved by royal decree. Following the confirmation of the new Belgian law, the Cypriot regulator has decided to comply with the FSMA ban. Hence, today CySEC warned all CIFs, through circular (C155), about the consequences of the new FSMA regulation:
“The Cyprus Securities and Exchange Commission (‘the CySEC’) hereby draws the attention of the Cyprus Investment Firms (‘the CIFs’) to the enacting of new Belgian Regulation for the distribution of OTC derivatives (binary options, CFDs) to retail clients in Belgium, coming into effect on August 18, 2016.
According to this new Belgian Regulation, certain derivatives such as binary options, CFDs with leverage etc may not be distributed to retail clients and certain distribution practices will also be prohibited. The CySEC urges the CIFs to ensure that they will fully comply with the above regulation.”
Per the CySEC filing, this means that all brokers providing investment and financial services in Cyprus will have to comply with the new Belgian regulation and stop providing services to Belgian traders. Starting from tomorrow onwards, the CIFs will no longer be able to offer Belgian residents the banned financial products; OTC derivatives, binary options and CFDs.
What are your thoughts on the new Belgian regulation and CySEC's decision? Let us know in the comments section below.