Regulatory Alerts2020-09-29 | Guidelines on the General Administrative Act of 23 July 2019 regarding Contracts for Difference (CFD)Guidelines on the General Administrative Act of 23 July 2019 regarding Contracts for Difference (CFD)
The Federal Financial Supervisory Authority (BaFin) has restricted the marketing, distribution, and sale of contracts for difference (CFD) to retail investors in Germany by imposing mandatory margin protection, negative balance safeguards, and a ban on inducement bonuses. Providers must ensure all direct and indirect communications, including social media, apps, and advertisements, prominently display a standardized risk warning featuring a provider-specific loss percentage. CFD providers remain liable for compliance failures by third-party marketers and introducing brokers, with ongoing monitoring and administrative fines enforced for infringements.
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