The European securities regulator has imposed strict restrictions on the use of leverage in contracts for difference (CFDs) on the back of concerns that retail investors across Europe were sufferering “significant losses” due to the complexity of the products. ESMA, the European Securities and Markets Authority, said on Tuesday that it will impose a restriction on the marketing, distribution or sale of CFDs to retail investors. The changes to CFDs means that investors will no longer be able to lose more money than they put in. Steven Maijoor, chair of EMSA, said the new measures will “ guarantee greater investor protection” across the EU by ensuring a common minimum level of protection for retail investors. Last March, the Irish regulator launched a consultation into the use of CFDs in Ireland, where it proposed prohibiting the sale or distribution of CFDs to retail clients in and from Ireland.

Source: The Irish Times March 27, 2018 08:47 UTC