ARTICLE
5 November 2018

Extension Of Controls On Sale Of Binary Options And Contracts For Difference To Retail Investors

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Elias Neocleous & Co LLC

Contributor

Elias Neocleous & Co LLC is the largest law firm in Cyprus and a leading firm in the South-East Mediterranean region, with a network of offices across Cyprus (Limassol, Nicosia, Paphos), Belgium (Brussels), Czech Republic (Prague), Romania (Budapest) and Ukraine (Kiev). A dynamic team of lawyers and legal experts deliver strategic legal solutions to clients operating in key industries across Europe, Asia, the Middle East, India, USA, South America, and China. The firm is renowned for its expertise and jurisdictional knowledge across a broad spectrum of practice areas, spanning all major transactional and market disciplines, while also managing the largest and most challenging cross-border assignments. It is a premier practice of choice for leading Cypriot banks and financial institutions, preeminent foreign commercial and development banks, multinational corporations, global technology firms, international law firms, private equity funds, credit agencies, and asset managers.
The Cyprus Securities and Exchange Commission has notified Cyprus Investment Firms it regulates that the European Securities and Markets Authority has extended its controls on binary options and contracts for difference.
Cyprus Corporate/Commercial Law

The Cyprus Securities and Exchange Commission has notified Cyprus Investment Firms it regulates that the European Securities and Markets Authority has extended its controls on binary options and contracts for difference.

The prohibition on the marketing, distribution or sale of binary options to retail clients, which has been in effect since 2 July 2018, has been extended for three months, to 2 January 2019. Certain products, which have specific features that mitigate the risk of investor detriment, are now excluded from the prohibition.

The restrictions on the marketing, distribution or sale of contracts for difference to retail clients, which have been in effect since 1 August, have been extended by three months, to 1 February 2019. These restrictions include leverage limits, a margin close out rule on a per account basis, negative balance protection on a per account basis, a restriction on the incentives offered to trade CFDs and a standard risk warning, including the percentage of the CFD provider's retail investor accounts which are loss-making.

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