EU to Lift Temporary Ban on the Sale of Binary Options to Retail Clients in Wake of National Measures

The European Securities and Markets Authority has ended its temporary prohibition on the marketing, distribution or sale of binary options to retail clients. ESMA's product intervention powers under the Markets in Financial Instruments Regulation allow it to impose temporary prohibitions or restrictions on certain financial instruments, financial activities or practices to address a significant investor protection concern in the EU. ESMA's first ban applied from July 2, 2018 and was then extended every three months because ESMA did not consider that the consumer protection risk had been addressed. ESMA's view is that because most national regulators in EU member states have now adopted permanent measures, its own temporary prohibition does not need to be extended. The U.K. Financial Conduct Authority imposed a permanent ban on the sale of binary options to retail clients from April 2, 2019. The ban is wider than ESMA's because it includes securitized binary options.

ESMA's temporary prohibition will automatically cease from the end of the day on July 1, 2019. ESMA will continue to monitor the markets to assess whether any other action is necessary.

View ESMA's Press Release on cessation of the temporary prohibition.

View details of ESMA's last extension of the ban.

View details of the FCA's permanent ban.

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