European Securities and Markets Authority (ESMA)
ESMA Ceases Renewal of Product Intervention Measure Relating to Binary Options
ESMA announced it would not renew its temporary prohibition because most national competent authorities have taken permanent national product intervention measures at least as stringent as ESMA's measure.
ESMA imposed a temporary prohibition on the marketing, distribution or sale of binary options to retail clients in Decisions (EU) 2018/795, (EU) 2018/1466, (EU) 2018/2064 and (EU) 2019/509. ESMA announced it would not renew its temporary prohibition; the measure in Decision (EU) 2019/509 was due to automatically expire at the end of the day on 1 July 2019.
What the Rules Say
ESMA has taken product intervention measures regarding binary options, imposing a temporary prohibition on their marketing, distribution or sale, in Decisions (EU) 2018/795, (EU) 2018/1466, (EU) 2018/2064 and (EU) 2019/509.
ESMA's notice said that, if the temporary prohibition was not renewed again, the measure in Decision (EU) 2019/509 would automatically expire at the end of the day on 1 July 2019.
ESMA announced it would not renew its temporary prohibition because most national competent authorities have taken permanent national product intervention measures at least as stringent as ESMA's measure.
ESMA said it will continue to monitor activities in relation to these and other related speculative products to determine whether other EU-wide measures may be needed.
Decision (EU) 2018/2064, Article 1: "The marketing, distribution or sale to retail clients of binary options is prohibited."
ESMA said that most national competent authorities have taken permanent national product intervention measures. Germany's BaFin is one example (see our Germany page).
Scope and Exceptions
Status in each of the 27 member states today must be checked with the national regulator.
How to Check a Firm
Check the official register of the national regulator in the relevant member state (such as BaFin in Germany).
If a firm does not appear on the relevant register, treat that as a reason to stop and check further before sending money.
Frequently Asked Questions
What temporary measures did ESMA take on binary options?
ESMA imposed a temporary prohibition on marketing, distribution or sale of binary options to retail clients in Decisions (EU) 2018/795, (EU) 2018/1466, (EU) 2018/2064 and (EU) 2019/509.
How long did Decision (EU) 2018/2064 apply?
Decision (EU) 2018/2064 stated: "This Decision shall apply from 2 January 2019 for a period of 3 months."
Why did ESMA announce it would not renew its temporary prohibition?
ESMA announced it would not renew its temporary prohibition because most national competent authorities have taken permanent national product intervention measures at least as stringent as ESMA's measure.
Does this page address individual liability?
This page summarises what the regulators' published rules say. It does not address whether an individual could face liability. Seek independent legal advice.
Sources and Official References
- ESMA Decision (EU) 2018/2064 (14 Dec 2018): https://eur-lex.europa.eu/eli/dec/2018/2064
- ESMA Official News (1 Jul 2019): https://www.esma.europa.eu/press-news/esma-news/esma-ceases-renewal-product-intervention-measure-relating-binary-options
This page summarises what the regulators' published rules say. It does not address whether an individual could face liability. Seek independent legal advice.
This page is published for informational and legal transparency purposes only and does not constitute financial, legal, or tax advice. Regulations change frequently across jurisdictions. Always consult official financial regulatory circulars (e.g. Bangladesh Bank, BSEC, FCA, CySEC) or qualified legal counsel before engaging in foreign exchange or derivative trading.