Published: 31st October 2016

Of relevance to:

Firms involved in CFDs and similar products such as binary options and rolling spot forex


ESMA has updated its Q&As on ‘the provision CFDs and other speculative products to retail investors under MiFID’. – see Regulatory Roundup 78 for the previous version which included the addition of the importance of determining whether the client has the necessary experience and knowledge to understand the risks involved in such investments (the ‘appropriateness’ test).

In addition to CFDs, the paper also references rolling spot forex and binary options – these products will also fall under the heading of ‘PRIIPs’.

Strictly speaking the paper is addressed to the competent authorities rather than to firms but, of course, the messages within will also be relevant to firms.

New Q&As added concern:

  • Best execution obligations for firms
  • The use of leverage
  • The withdrawal of funds from trading accounts
  • The use of trading benefits e.g. offering ‘bonuses’ as an introductory offer

 

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