France’s financial markets regulator, the Autorité des Marchés Financiers (AMF), on Tuesday has decided to follow in the footsteps of ESMA, banning the sale of to retail customers. Effective today, the watchdog also extended its restriction against promoting the contracts for difference (CFDs) to non-professional investors.
These measures are applicable to investment firms and brokers based in France as well as to those operating in the country from another EU member state through the EU passporting regime. The French national restrictions from ESMA which are currently active throughout the bloc.
This move by the AMF does not come as a surprise since the regulator has been proactive when it comes to these risky financial products, as in March. The decision also mirrors the UK financial watchdog’s move which has already rolled out a permanent ban on back in April, while similar measures are under way in other countries.
The French watchdog pushed to come up with permanent restrictions against CFDs and binary options even as every EU member has the right to implement its own rules tailored to their national markets.
The directive also mandates negative account protection, ensuring that customers can’t lose more than their trading stake, avoiding a repeat of the debacle following the 2015 Swiss Franc collapse. Finally, the rules will forbid bonuses and other incentives that may have encouraged overtrading in recent years.
The decision includes renewing the following leverage limits, which vary according to the volatility of each asset class:
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