CySec informs Cyprus Investment Firms about the German and Spanish regulators restrictions for trading CFDs
The Cyprus Securities and Exchange Commission (CySec) has issued two important Circulars to inform Cyprus Investments Firms about the recent announcements of the German Federal Financial Supervisory Authority (BaFin) and of the Spanish Securities and Exchange Commission (CNMV) in relation with financial Contracts For Difference (CFDs).
In relation to BaFin’s decision, CySec has released the below Circular:
The Cyprus Securities and Exchange Commission (CySec) hereby draws the attention of the Cyprus Investment Firms (CIFs)1 to the Announcement of the General Administrative Act of the German Federal Financial Supervisory Authority (BaFin) regarding limitation on the marketing, distribution and sale of financial contracts for difference (CFDs) to retail clients in Germany.
More specifically, on May 8, 2017, BaFin issued a General Administrative Act pursuant to section 4b(1) of the German Securities Trading Act, where it prohibits the marketing, distribution and sale of CFDs to retail clients in Germany, in so far as they may give rise to additional payments obligation. The prohibition is to be implemented by August 10, 2017.
Therefore, providers of CFDs with an additional payments obligation have three (3) months from the date of publication of the General Administrative Act to adjust their business models in accordance with BaFin’s new measures.
CIFs may visit BaFin’s website to read more information on the aforementioned.
The CySec herewith advises CIFs to consult with their legal consultants regarding the necessary legal actions required to ensure compliance with BaFin’s new regulatory measures.
1 This circular refers to CIFs that are freely providing investment and ancillary services, or/and are performing investment activities, in accordance with Article 79 of the Investment Services and Activities and Regulated Markets Law of 2007, as in force (the “Law”), relating to financial contracts for difference (CFDs) to retail clients, in the territory of Germany.
For more details about CySec’s Circular on BaFin announcement, please visit HERE
In relation to the announcement of the Spanish regulator (CNMV), CySec has released a Circular for the Cyprus Investment Firms to draw their attention to CNMV’s new requirements regarding financial contacts for difference (CFDs) and rolling-spot foreign exchange with a leverage level greater than 10:1, or binary options.
In Particular, the CNMV requires firms to expressly warn retail investors resided in Spain about the risk and complexity of the abovementioned products.
CySec herewith advises CIFs to consult with their legal consultants regarding the legal actions required to ensure compliance with CNMV’s requirements.
For more details about the CySec’s Circular and CNMV warnings, please visit HERE