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Italians in the ESMA trail prohibit binary options and limit CFDs
Another country introduces restrictions on binary optionsthat will de facto make them not available from 2 on July. Italian regulator of the financial market Commissione Nazionale per le Società e la Borsa (CONSOB) also announced that it will permanently introduce product intervention measures against CFD instruments.
ESMA changes are permanent
The changes are the effect of European regulator actions, known throughout Europe as "ESMA intervention". The Italian regulator has only repeated the recommendations that boil down to the prohibition of marketing activities and the distribution and sale of binary options to retail investors throughout Italy. In addition, similar restrictions will also include restrictions on the marketing, distribution and sale of CFDs to retail investors.
Be sure to read: ESMA - List of instruments with breakdown of leverage levels
In the case of CFD this applies, among others Limitation of leverage to a maximum of 1: 30, automatic closing of positions, protecting against negative balances or new standards on informing by brokers about risks related to the Forex market, which in Italy are far from accepted in most other European countries.
Intervention regarding binary options will apply from 2 on July 2019, and recommendations on CFD issues are to be adhered to no later than on 1 August 2019.
A wall for product intervention
The decision is the next in a row after the European regulator has declared war on binary options, or rather marketers selling them that are not aware of the risk to individual customers, who often lost a lot of investment on these investments. The intervention of ESMA in this regard has already taken place 1 July 2018 of the year.
Similar restrictions were previously introduced by the Netherlands, as well as by Great Britain, Germany, France, the Czech Republic, Slovakia and Estonia. We are waiting impatiently for the final shape of the changes that will be introduced by the Polish PFSA and in the European capital of the Forex industry - Cyprus (read: CySEC wants to limit the leverage to 1:20… and to 1:50).
It is a kind of betting on the direction in which the price of a given asset will change. It can be a raw material, like oil or gold, currency pair, stock market index or share price. In the case of correct direction, you could earn a few dozen percent more on them than, say, the Forex market. The risk, however, was enormous - the mistake ended with the loss of all capital. That's why binary options were more often referred to as gambling, not an investment. Especially that with the time their turnover began to be interested in dishonest brokers and there were many abuses and frauds in this market.
