ESMA Ceases Renewal of Product Intervention Measure Relating to Binary Options

On 1 July 2019, the European Securities and Markets Authority (ESMA) as the EU securities markets’ regulator, announced that it ceases its temporary measure to prohibit the marketing, distribution or sale of binary options to retail clients in the European Union (EU).

By virtue of its previous decisions (EU) 2018/795, (EU) 2018/1466, (EU) 2018/2064 and (EU) 2019/509, ESMA had adopted product intervention measures regarding binary options and imposed a temporary prohibition on their marketing, distribution or sale. As these temporary measures are not renewed, they automatically expire as of end of day of 1st July 2019.

ESMA’s decision not renew its temporary prohibition follows from permanent national product intervention measures taken by most EU national competent authorities (NCAs) relating to binary options; these are found by ESMA to be at least as stringent as ESMA’s. In this context and as regards Cyprus, Cyprus Securities and Exchange Commission (CySEC) has also initiated a consultation to impose Cyprus-specific national measures to restrict the marketing, distribution and sale of Contracts for Differences (CFDs). The relevant announcement is available here.

Our experienced Financial Services team can help you navigate the applicable regulatory framework in Cyprus and for any enquiry or assistance please contact Dimitris Papoutsis or your usual contact at Elias Neocleous & Co LLC.