CySEC reiterates new Spanish Forex and Binary Options Brokers requirements


The Cypriot watchdog CySEC has issued a new circular highlighting the new Spanish Forex and Binary Options Brokers requirements. The regulator notes the complexity of brokers' operations in the EU market.

18 May, AtoZForex Cypriot financial regulator, the Cyprus Securities and Exchange Commission (CySEC) has published a new circular for Cyprus Investment Firms. The latest announcement from the regulator highlights the new rules for Binary Options and Forex trading in Spain.

CySEC reiterates new Spanish Forex and Binary Options Brokers requirements

The Comisión Nacional del Mercado de Valores, the Spanish regulator, has issued the new framework for brokers who are offering leverage of more than 10x to the clients based in Spain. Moreover, the new rules are also applying to any type of Binary Options trading.

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The CySEC has published the new circular to point out the new guidelines for Spanish Forex and Binary options brokers. Earlier this March, Spain’s CNMV has set certain parameters for the industry brokers providing services to the retail customers.

According to the communication, the regulator’s requirement is that every brokerage dealing in CFDs, Forex, and binary options will have to mention additional risk warnings to the investors if the leverage is higher than 1:10.

Complexity of running the brokerage in EU

As per the regulator’s requirement, a warning sign should pop up educating the investor about the risk associated with the position or order that the investor is placing. As per the tentative translation from the CNMV document, the warning sign should look something like this:

“The financial product you are about to acquire (product must be identified) is a product with leverage. You must be aware that losses may be greater than the amount disbursed initially for acquisition.”

The new rules are aiming to ensure that all Spanish investors are having the same level of protection. Moreover, the CNMV strives for the equal conditions for all participants in the Spanish financial market.

The warning from CySEC is stressing the increasing complexity of running a brokerage under modern EU and MiFID standards. The broker must ensure that the operations are meeting the requirements of each individual market.

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