1. European
  2. ESMA - European Securities and Markets Authority
  3. Questions and Answers
  4. 2017
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  1. Questions and Answers - Relating to the provision of CFDs and other speculative products to retail investors under MiFID (ESMA35-36-794) [April 2016 and updated March 2017]
  2. Section 2: Conflicts of interest arising from business models that may be adopted by firms offering speculative products to retail investors
  3. Question 3 [last update 1 June 2016]: What conflicts of interest aspects should national competent authorities (NCAs) consider when a firm offering CFDs or other speculative products to retail investors makes use of other parties to perform activities, including conflicts of interest arising from remuneration arrangements with such parties?
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Version date: 8 April 2016 - onwards

Question 3 [last update 1 June 2016]: What conflicts of interest aspects should national competent authorities (NCAs) consider when a firm offering CFDs or other speculative products to retail investors makes use of other parties to perform activities, including conflicts of interest arising from remuneration arrangements with such parties?

Answer 3:

21. It is commonly observed in this sector of the market that firms offering CFDs and other speculative products to retail clients engage third parties or other entities within the same group to perform certain activities on their behalf. Some examples include:

a. The outsourcing of certain activities to call centres (e.g. the execution of marketing campaigns or the provision of client support services), located within the home Member State or in other Member States or third countries;

b. The outsourcing of information-gathering activities required to support the client on-boarding process (including for the assessment of appropriateness);

c. The outsourcing of the provision of trading platform software solutions to specialist IT firms; and

d. The use of specialist providers to provide educational or training materials for clients or potential clients.

22. When considering such arrangements, NCAs should ensure that it is not possible for a firm offering CFDs or other speculat

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