The European Securities and Markets Authority (ESMA) has opened consultation on a suite of potential measures to regulate the sale of contracts for difference (CFD) to retail investors, including rolling spot forex and binary options.
In a call for evidence on the potential need for intervention, the pan-European regulator is seeking feedback on proposed leverage limits on the opening of a position by a retail client, a margin close out rule and negative balance protection on a per-account basis, which would provide an overall guaranteed limit on retail client losses. It is also considering restricting incentivisation of trading provided by a CFD provider and enforcing a standardised risk warning by CFD providers, which would include an indication of the range of losses on retail investor accounts. CFDs are contrac...
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