Regulatory Alerts2021-06-08
ESMA Opinion on the product intervention measures relating to turbos proposed by the Dutch AFM
The European Securities and Markets Authority (ESMA) issued an opinion on the Dutch Authority for the Financial Markets' (AFM) proposal to permanently restrict the marketing, distribution, and sale of turbo products to retail clients in the Netherlands. The AFM's measures introduce specific leverage caps based on underlying assets, mandate provider-specific risk warnings, and prohibit inducements, citing significant investor protection concerns due to the complexity and high loss rates associated with turbos. ESMA evaluated these national measures to determine if they are justified and proportionate under Article 43 of Regulation (EU) No 600/2014, noting that similar restrictions already apply to Contracts for Differences (CFDs) across the Union.