Erscheinung:29.09.2020 | Topic Consumer protection BaFin publishes guidelines for CFD trading
BaFin published its Guidelines on the General Administrative Act of 23 July 2019 regarding Contracts for Difference (CFD) on 01 September 2020.
The guidelines are designed to assist CFD providers in adapting the marketing, distribution and sale of CFD to the requirements of the general administrative act, and to prevent infringements of the act.
BaFin has issued the guidelines to address constellations identified as problematic during its monitoring of CFD offerings. For example, it is once again making clear that the requirements of the general administrative act must be implemented in a legally unambiguous manner in CFD providers’ terms and conditions of business, that the requirement for risk warnings also extends to smartphone apps, videos and social media messages, and that these risk warnings must be prominently visible for retail investors.
In addition, it makes clear that the requirement to include a risk warning also applies to CFD providers’ advertising and marketing partners, such as affiliate partners and introducing brokers. CFD providers must ensure that these also comply with the requirements of the general administrative act. Breaches by these partners are taken to have been committed by the CFD provider concerned.
Background
BaFin issued its general administrative act of 23 July 2019 restricting the marketing, distribution and sale of CFD because of significant investor protection concerns. It monitors compliance with this product intervention measure on an ongoing basis. Any infringements constitute an administrative offence and are punishable by a fine.