ESMA bans binary options, sets restrictions on CFDs for retail clients

The European Securities and Markets Authority (ESMA) announced three-month ban on the marketing, distribution or sale of binary options to retail investors and a set of restrictions on CFDs offered to the same type of clients.

The restrictions on CFDs include leverage limits on opening positions; a margin close out rule on a per account basis; a negative balance protection on a per account basis; preventing the use of incentives by a CFD provider; and a standardized risk warning.

To be more precise, the leverage limits on the opening of a position by a retail clients will range from 1:30 to 1:2, depending on the underlying asset.

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