ESMA's Stop To Binary Options In Europe

With the aim of protecting small investors, the European Securities and Markets Authority (ESMA) has temporarily banned the marketing, trading and selling of binary options.

The decision was made after European national authorities, and in application of the Mifid II directives, identified that binary options are responsible for the highest losses to small investors.

With regard to contracts for differences, known as CFD, the sale will be regulated, imposing new maximum limits on leverage and establishing more stringent requirements.

Triggering the emergency response was a check on investments made by retail accounts.

It emerged that, due to binary options and CFD, small investors had been subject to continuous losses, with a liability of no less than 1600 euros per person, and in some graver cases, 29,000 euros.