Regulatory Alerts2022-10-26
ESMA Opinion on BaFin's product intervention measure on futures with additional payment obligations
ESMA issued an opinion on a permanent prohibition proposed by BaFin to ban the marketing, distribution, or sale of futures with additional payment obligations to retail clients in Germany. The measure allows exceptions only if additional payment obligations are contractually excluded, the client confirms the purchase is solely for hedging purposes, or the transaction closes out existing open positions. ESMA validates that this intervention is justified and proportionate to address significant investor protection concerns regarding unlimited loss risks that existing EU regulations fail to mitigate.
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