CySEC requires adaptation to the guidelines from Spain and Germany
CySEC, the Cypriot financial supervision commission, issued a communication addressed to its subordinate entities regarding offering their services in Germany and Spain. The supervisor emphasizes that brokers operating under a Cypriot license in these countries are required to adapt to the local regulatory changes.
German standards in Cyprus
Earlier this month, BaFin, the German equivalent of the Polish Financial Supervision Authority, decided to introduce changes that are designed to more effectively protect the interests of German residents. These include, inter alia, prohibitions on offering leveraged instruments, especially contracts for differences (CFDs) and Forex transactions in the event that XNUMX% protection against overdraft is not ensured (changes apply to individual investors). The deadline for introducing the above-mentioned protection is mid-August this year. You can find out more about the changes in Germany read in a separate article.
Hispanic with 1 leverage: 10
According to the information contained in the CySEC communication, brokers accepting residents from Spain can offer them a lever not larger than 1: 10. This applies to CFD, Forex and binary options addressed to retail investors. Another condition is to inform the trader about the possibility of debiting the account, even on the transaction platform and before entering into the transaction.
Due to the technical limitations of some platforms, such as MT4, which is a product of external companies, it can be assumed that some popular brokers will withdraw from the market there temporarily (until a solution is found) or permanently.
It is not the end. The trader must be fully aware of all costs associated with entering into leveraged transactions and the fact on which he actually trades. The broker, on the other hand, must have confirmation in the form of a voice or a written one, which will indicate the understanding of these issues.
Leave a Response