The European Securities and Markets Authority (ESMA) has updated its Q&A on the application of MiFID to the marketing and sale of financial contracts for difference (CFDs) and other speculative products to retail clients (such as binary options and rolling spot forex) to retail clients. The purpose of the Q&A is to promote common supervisory approaches and practices in the application of MiFID and its implementing measures to key aspects that are relevant when CFDs and other speculative products are sold to retail clients. The Q&A include 9 questions and answers, in sections 3 to 5 addressing the following topics:

• the information provided to clients and potential clients about how CFDs and other speculative products work and the risks involved, including marketing communications;
• the assessment of a retail client or potential retail client’s ability to understand the risks involved in order to determine whether trading in CFDs or other speculative products is appropriate for them; and
• factors for supervisors to consider when firms offering CFDs or other speculative products to retail clients enter into certain commercial arrangements with other authorised firms.

The purpose of the Q&A is to promote common supervisory approaches and practices in the application of MiFID and its implementing measures to key aspects that are relevant when CFDs and other speculative products are sold to retail clients.

View ESMA publishes updated July Q&A on CFDs and other speculative products, 25 July 2016