Regulations Roundup: August 2018

Regulations dominate the finance sector and they’re changing all the time which is why it’s essential to keep up with all the latest updates. As an expert content marketing agency working with world-leading financial services brands, we take the time to research rule changes to ensure everything we do is compliance friendly. In fact, we love discovering the latest updates so much that we are sharing our findings in a monthly regulations roundup. So, grab a coffee, here’s the latest regulations roundup from Contentworks for August 2018.

Financial Regulations that will affect the sector this month

ESMA agrees to prohibit binary options and restrict CFDs

The European Securities and Markets Authority (ESMA) has agreed on measures on the provision of contracts for differences (CFDs) and binary options to retail investors in the European Union (EU). The agreed measures which came into force on 1 August include:

  1. Binary Options – a prohibition on the marketing, distribution or sale of binary options to retail investors
  2. Contracts for Differences (CFDs) – a restriction on the marketing, distribution or sale of CFDs to retail investors. This restriction consists of: leverage limits on opening positions; a margin close out rule on a per account basis; a negative balance protection on a per account basis; preventing the use of incentives by a CFD provider; and a firm specific risk warning delivered in a standardised way.

Note that in accordance with MiFIR, only temporary intervention measures can be introduce by ESMA on a three monthly basis. ESMA will consider the need to extend these measures.

Top tip: We know that brokers aren’t happy about the new risk warning which must include the percentage of losses on a CFD provider’s retail investor account. Unhappy or not, it’s necessary to abide by the rules and ensure appropriate risk statements accompany everything from blogs to PR materials.

Cryptocurrency regulation concerns continue to bubble

Back in March 2018, a G20 summit put global crypto regulations into the spotlight. An end of July deadline for ‘very specific’ rules on how to proceed was thought to give way to an interesting August, but the deadline has now been moved to October. The debate is not over what to regulate, but which data is needed to understand the sector better. The G20 will await the Financial Action Task Force’s (FATF) clarification on how its standards apply to ‘crypto-assets’.

Crypto regulation pressure is also coming from large business associations including the U.S. Chamber of Commerce in a bid to help promote the development of responsible cryptocurrency-based businesses and other emerging fintech organisations.

Top tip: When rolling out your marketing campaigns (especially the crypto ones) you should keep a log of every landing page and forum posting in case you need to edit it quickly. Which you may well need to.

The People’s Bank of China will ‘crush’ foreign ICOs

While China banned ICOs back in 2017, the People’s Bank of China (PBoC) has recently tightened its anti-crypto stance further in an on-going bid to protect Chinese investors. PBoC Vice President, Pan Gongsheng, reiterated government sentiment stating that they will ‘crush’ any ‘new financial product or phenomenon that is not authorised under the existing legal framework’ as soon as it dares to surface. China therefore has no plans to overturn its internal ICO policy and crypto trading ban.

Top tip: If you struggle to keep up with the latest news, then try a tailored RSS to your Twitter or check out the Pocket app for news reading during your daily commute!

What to watch out for this month:

The establishment of CySec’s Innovation Hub

The Cyprus Securities and Exchange Commission (CySEC) has recently announced the establishment of its Innovation Hub which is designed to facilitate the exchange of information between those who work in the fintech and regtech spaces. The goal is to make the regulation of fintech companies a simple and productive process with the Innovation Hub offering regulatory expertise allowing for a more informed regulatory landscape.

If you’re looking for financial services marketing, speak to the Contentworks team today. We understand financial regulations; keep our finger on the pulse and work with the world’s leading finance and tech brands to provide winning content marketing solutions. Enjoyed this month’s regulations roundup? Sharing is caring.

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