Dutch Watchdog AFM Implements Permanent Binary Options Ban And CFD Restrictions

The individual EU member states gradually implement the measures of the European Securities and Markets Authority (ESMA) regarding the binary options ban and CFD restrictions. Most recently, the Dutch Financial Markets Authority (AFM) implemented national measures mirroring ESMA’s product intervention measures and transposed the ESMA rules into national regulations. In recent years, retail investors have lost billions with these fraudulent broker schemes. The AFM measures were effective as of 19 April 2019.

The vast majority of fraud systems in the binary options and CFDs producing dozens of thousands of victims in the EU were not operated by EU citizens, but by Israeli perpetrators. Israel is regarded by the US and EU authorities as the home turf of these raiders. In fact, the Israeli start-up miracle was fuelled primarily by these fraudulent systems. With “innovative” approaches, Israeli companies have developed trading and marketing software with which EU citizens have been systematically operated as victims of these illegal and fraudulent broker platforms such as OptionStarsGlobal, Option888, Porter Finance, Vision Binary, CherryTrade or BeeVision.

Since late 2017, most states – including Israel – have banned the binary options. ESMA first issued such a binary options ban in March 2018.

As of 19 April 2019 the marketing, distribution or sale of binary options to retail investors in and from The Netherlands is prohibited; the marketing, distribution or sale of CFDs to retail investors in and from The Netherlands is restricted.

AFM Press Release issued April 17, 2019 (link)

It is the first time that the AFM is using the national product intervention powers received through the introduction of MiFID II and MiFIR in early 2018. Other than ESMA’s measures, the AFM’s product intervention measures are permanent and the AFM is one of the first European supervisors to introduce these national measures.