The European Securities and Markets Authority (ESMA) it has decided to renew restrictions on the marketing and distribution of contracts for difference (CFDs) to retail clients for another three months, the regulator announced Friday.
In extending these restrictions, “a significant investor protection concern related to the offer of CFDs to retail clients continues to exist,” ESMA says in a news release.
The restrictions were set to expire on Nov. 1.
They include leverage limits, margin rules, and limits on the incentives that can be offered for trading CFDs. They regulators require firms to deliver a standardized risk warning to retail clients.
In extending these restrictions, “a significant investor protection concern related to the offer of CFDs to retail clients continues to exist,” ESMA says in a news release.