Product Intervention Measures On CFDs And Binary Options

Quick Take: New ESMA Q&A sharpen supervisory tone of product intervention

One of ESMA's core mandates is to take coordinated and/or concentrated action to protect retail investors, i.e., consumers. The recent (temporary) bans on certain retail investor products has a direct impact on those investors' ability to access markets, including those beyond its borders. Even if ESMA considers this action measured, the limitation or, where indicated, the withdrawal of access is of course regrettable. More pressingly, the ban also has knock-on effects on a host of arrangements concluded in the wholesale market, which may require adjustments or unwinds. Moreover, the way in which ESMA is using its new product intervention powers will likely be of interest to all market participants, regardless of asset class or business strategy, in particular given the clarification on extra-territorial scope.