On 22 May 2018, the European Securities and Markets Authority (ESMA) adopted two Decisions under Article 40 of Regulation (EU) No 600/2014:

1. to restrict the marketing, distribution or sale of contracts for differences (CFDs) to retail clients; and

2. to prohibit the marketing, distribution or sale of binary options to retail clients.

In accordance with Article 40(5) of Regulation (EU) No 600/2014, this Notice provides details of these Decisions and the time from which the measures will take effect. The full text of the Decisions is published in the Official Journal of the European Union.

Restriction in relation to CFDs

The enacting terms of the CFD Decision provide:

Article 1

Definitions

For the purposes of this Decision:

(a) 'contract for differences' or 'CFD' means a derivative other than an option, future, swap or forward rate agreement, the purpose of which is to give the holder a long or short exposure to fluctuations in the price, level or value of an underlying, irrespective of whether it is traded on a trading venue, and that must be settled in cash or may be settled in cash at the option of one of the parties other than by reason of default or other termination event;

(b) 'excluded non-monetary benefit' means any non-monetary benefit other than, insofar as they relate to CFDs, information and research tools;

(c) 'initial margin' means any payment for the purpose of entering into a CFD, excluding commission, transaction fees and any other related costs;