France plans to introduce ESMA regulations permanently (including the 1 leverage: 30)

The French financial market regulator, Autorité des Marchés Financiers (AMF), is today opening a public consultation on the rules governing the Forex and binary options market. The talks will primarily focus on the permanent introduction of ESMA regulations, i.e. a complete ban on offering binary instruments and limiting the leverage for foreign exchange products on the OTC market.

Be sure to read: Limitations of ESMA for the Forex market extended by 3 months

In the footsteps of the UK and Germany

The first countries that have expressed their absolute approval for the product intervention of ESMA was Great Britain i Germany. Both FCA and BaFIN have declared that they want to introduce, inter alia, binary options trading ban and leverage reduction to 1:30 permanently at national level. Although the European regulations on these markets have been extended several times, officially they are still only "temporary" (for 3 months with the possibility of extension).

According to the announcement presented by the French AMF, the introduction of the amendment to the regulations is to be a preventive measure in case ESMA suddenly changes its mind about continuing its current intervention policy. A similar idea had already been put forward by the Polish Ministry of Finance, where the leverage limitation was supposed to be 1:50 at the national level. In the end, the project ended up in a drawer, but there is a risk that in the event that restrictions are introduced by many regulators from the EU zone, the Polish government will not want to stay "worse" in this matter.

ESMA regulations in France

The French equivalent of the PFSA expressed its willingness to protect the interests of individual investors, regardless of future ESMA decisions. In connection with this, the opinions of interested entities have been collected in order to be able to achieve the presented goal in the best possible way.

Fragment of the AMF message:

"While awaiting changes in the European Securities and Markets Authority (ESMA) policy, AMF would like to gather the views of all stakeholders on a national-level intervention system aimed at protecting investors against the risks associated with speculative instruments."

Ideas of the French regulator are:

• Limiting the leverage to the values ​​currently introduced by ESMA - for the Forex market max. 1:30 am.
• Introducing protection against the creation of a negative balance on the account of retail clients,
• Prohibition of marketing activities in the form of competitions and promotions for CFD offers,
• The obligation to post information about the risk in promotional materials,
• Unification of the rules of operation of the Stop-Out mechanism,
• Total ban on services related to binary options (including their advertising).

Public consultations will last until mid-April of the year 2019, and you can send your comments to the French regulator by e-mail to the following address: directiondelacommunication@amf-france.org.