On October 31, the decision by the European Securities and Markets Authority (ESMA) to renew and amend the temporary restriction on the marketing, distribution or sale of contracts for differences (CFDs) to retail clients was published in the Official Journal of the European Union (OJ).

The restriction has been in effect since August 1 and, in September, ESMA announced that it was renewing the restriction from November 1 for a further three-month period. ESMA is renewing the restriction as it considers that there is still concern regarding whether there is significant investor protection regarding the offer of CFDs to retail clients (for further details of the concerns raised by the UK Financial Conduct Authority, see the January 12 edition of the Corporate and Financial Weekly Digest).

ESMA’s decision was made under the Markets in Financial Instruments Regulation, which gives ESMA the power to introduce temporary intervention measures on a three-month basis. Before the end of the three-month period, ESMA must review the measures and consider whether they should be extended for a further three months.

ESMA’s decision is available here.