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ESMA PUBLISHES FINAL REPORT ON PRODUCT INTERVENTION REQUIREMENTS

Following the implementation of ESMA’s first product intervention measures in March 2018, the European Commission has requested ESMA to report on the practical effects of the measures taken. ESMA has now published the final report, taking into consideration the opinion of the Securities Markets Stakeholder Group (SMSG) and the replies received from market participants, investors and associations. Amongst other matters, the report concludes that the measures have successfully protected retail investors by preventing the distribution of speculative products. Furthermore, nearly all national competent authorities have adopted national product intervention measures in relation to binary options and CFDs to retail clients.

The report also provides technical advice to the European Commission on ways to improve the intervention measures, including a recommendation to address the risk of arbitrage between MiFID firms and fund management companies, a request for clarification on the application of measures to firms acting on a cross-border basis, and measures to facilitate the adoption of an ESMA measure by national authorities. ESMA has also suggested that the measures become permanent, or to extend ESMA’s powers to allow for the introduction of temporary bans on certain products.

DF Advocates has assisted a number of clients in the implementation of the product intervention measures, and continues to assist in regulatory aspects relating thereto. For further information, please do not hesitate to contact our financial services team on dfcs@dfadvocates.com.

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