1 Introduction

The European Securities and Markets Authority (ESMA) has agreed on temporary product intervention measures on the provision of contracts for differences (CFDs) and binary options to retail investors in the European Union (EU).

This document provides additional information on the measures that have been agreed pursuant to ESMA’s new product intervention power under Article 40 of Regulation (EU) No 600/2014 (MiFIR).

ESMA intends to adopt these measures in the official languages of the EU in the coming weeks, following which ESMA will publish a notice on its website. The measures will be published in the Official Journal of the EU (OJ) and will start to apply one month, for binary options, and two months, for CFDs, after their publication in the OJ.

2 Agreed measure relating to CFDs

The product intervention measures ESMA has agreed under Article 40 of MiFIR for CFDs include:

1. Leverage limits on the opening of a CFD by a retail client from 30:1 to 2:1, which vary according to the volatility of the underlying:

• 30:1 for major currency pairs;

• 20:1 for non-major currency pairs, gold and major indices;

• 10:1 for commodities other than gold and non-major equity indices;

• 5:1 for individual equities and other reference values;

• 2:1 for cryptocurrencies;