The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, today issued an Opinion on product intervention measures taken by the Spanish Comisión Nacional del Mercado de Valores (CNMV).
The measures consist of two elements. First, further restrictions on the marketing of CFDs, including the advertisement of CFDs to the public. Second, the introduction of initial margin and margin close out requirements to products where the investor may lose more than initially invested.
ESMA is of the opinion that the national measures are justified and proportionate.
Moreover, the EU regulator encourages all National Competent Authorities (NCAs) to monitor whether similar risks as those identified by the CNMV may arise in their jurisdictions.
NCAs may take product intervention measures in accordance with Article 42 of Regulation (EU) No 600/2014. At least one month before a measure is intended to take effect, an NCA must notify all other NCAs and ESMA of the details of its proposed measure and the related evidence, unless there is an exceptional case where it is necessary to take urgent action.
In accordance with Article 43 of Regulation (EU) No 600/2014, ESMA performs a facilitation and coordination role in relation to such product intervention measures taken by NCAs. After receiving notification from an NCA of its proposed measure, ESMA must adopt an opinion on whether the proposed measure is justified and proportionate. If ESMA considers that the taking of a measure by other NCAs is necessary, it must state this in its opinion.
