In order to clarify the application of the European Directive on the market in MIFID financial instruments, ESMA has published a Question and Answer document accessible to all stakeholders
Through this section, the European Securities and Markets Authority intends to provide an update on the i’s concerning the regulations in force on the market. A MIFID II directive is also under development. The details…
A detailed Q&A section
The main objective of the publication of this Q&A document is to clarify doubts about the application of the rules in the European market. The topics covered relate mainly to the marketing of financial instruments, including CFDs (Contract For Difference) and binary options. Instruments whose popularity is now ten times higher thanks to online trading tools.
This section has been designed in great detail so that all questions can be answered. Moreover, the questions are dealt with on a case-by-case basis, in order to provide the most precise answers possible. For example, the document contains the various points that a broker must comply with in order to be truly compliant with the MIFID.
The different constraints between compliance with rules and profits are also discussed in this section. ESMA also stated that this Q&A document will be updated regularly when new topics or questions need to be addressed. This will allow actors to operate in full knowledge of the facts and at the same time make it easier for customers to detect non-conformities and act accordingly.
A MIFID II directive
Since the marketing of financial assets experienced a major boom in the market, the latter has undergone many upheavals. Insecurity prevails, particularly in the field of online trading, and new tools and techniques are constantly emerging. The popularization of the activity, as well as technological developments, has brought about various changes in the sector, which is now in the midst of “change”.
Thus, in order to cope with these upheavals and to introduce new requirements, ESMA plans to update the MIFID Directive, MIFID II. The European Securities and Markets Authority believes that a new directive is needed to organise the market in highly speculative instruments such as Forex, CFDs and binary options. This is in order to respond to the various concerns of stakeholders, particularly in terms of securing activities and the quality of information.
Through this MIFID II directive, ESMA intends to give more consideration to the different types of brokerage companies and their ways of providing their services. An organizational and ethical guideline that will be detailed and precise. Of course, all brokers regulated on the European market will have to comply with this new regulation. The implementation of MIFID II is scheduled for January 2017.
A guarantee of security for traders
While many billions of euros have already been scammed in trading, the implementation of these various measures provides a better guarantee of security for traders. In particular, the growing number of individuals who are launching binary options will be much more knowledgeable and will have reliable information to protect themselves
At the same time, the AMF or Autorité des Marchés financiers in France prides itself on providing more complete and up-to-date information on fraudulent brokers. Trading companies that are not regulated and use different means to scam traders are, in fact, still numerous on the market.
Traders are therefore always advised to check the organisation’s black list before registering with a broker. The players, for their part, will be forced to comply with the regulations in force in order to be able to escape from this blacklist.