The European Securities and Markets Authority (ESMA) has published a questions and answers paper (Q&A) on the application of the Markets in Financial Instruments Directive (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).
The aim 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 relate to the following matters:
- authorisation of firms offering CFDs and other speculative products to retail investors; and
- conflicts of interest arising from business models that may be adopted by investment firms offering speculative products to retail investors.
ESMA will continue to work on this topic and aims to publish further Q&As in the coming months.
View ESMA Q&A on CFDs and other speculative products, 8 April 2016