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#1 18-03-2017 14:43:06

johnedward
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From: Paris - France
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Spain's regulatory agency imposes major changes on forex brokers

Spain's regulatory agency imposes major changes on forex and CFD brokers


http://www.forex-central.net/forum/userimages/CNMV-Spanish-regulator.png


Article originally appeared on financemagnates

The crackdown on foreign exchange and binary options brokers across the European Union is continuing. The latest set of measures comes from Spain, where the country’s national regulator, Comisión Nacional del Mercado de Valores (CNMV) issued a communique to companies from the industry.


A copy of the document obtained by Finance Magnates shows that the watchdog is mandating material changes for brokers. Every provider that is offering forex or CFDs with leverage higher than 1:10 and binary options has to include additional risk warnings for retail clients.

A Screen of Warning Signs

Every time a client opens and order or a position some confirmation dialogues should be displayed to the clients. Here is an approximate translation from Spanish:

“You are about to acquire a product that is not simple and may be difficult to understand: insert name of the product. The CNMV considers that due to the complexity and high risk, the product is not suitable for retail investors.”

In the case of leveraged products, there is an additional disclaimer:

“The product you are about to acquire is a product with leverage. You should be aware that the losses acquired via trading this product may exceed the amount that is required to open the position.”


The brokerage is also required to evaluate every client’s suitability for trading such instruments, which is an already existing rule. The news here is that every client that fails the suitability test will have to manually confirm with letters: “This product is complex and the CNMV considers its unsuitable for me.”

In many cases, the changes described above may be difficult to implement. Brokerages that rely on third party technology providers might have to commit additional resources to streamline the process. Companies only have a month to comply with the new requirements if they are willing to continue operating in Spain.


"Anything worth having is worth going for - all the way." - J.R. Ewing

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