Online trading company IG Group (IGG.L) believed that any financial impact from the implementation of the prohibition on binary options and the restrictions on contracts for difference or CFDs being considered by European Securities and Markets Authority or ESMA is unlikely to be significant in the current financial year.
It remains difficult to predict what impact regulatory change may have on the business in subsequent financial years. The company believes that any reduction in historic annual revenue from the implementation of the measures currently being considered by ESMA, taking into account the actions being taken by the business to mitigate the impact, would have been less than 10% including the impact from lower binary revenue. If such measures were implemented the Company would also expect to flex marketing spend and resource allocation according to opportunity.
IG believes that the leverage restrictions under review are disproportionate and go beyond what is needed to protect consumers from poor outcomes associated with excessive leverage. The danger of disproportionate leverage restrictions on regulated firms is the risk that they will push retail clients to trade CFDs with unregulated firms based outside the EU potentially resulting in poor client outcomes.
IG said it is supportive of the objectives of regulators to improve client outcomes in the industry, and the Company supports ESMA in its efforts to achieve harmonisation of regulation across the EU.
On Friday, The European Securities and Markets Authority (ESMA) issued statement to provide an update on its work in relation to the provision of contracts for differences (CFDs), including rolling spot forex, and binary options to retail clients.
ESMA said it remained concerned that the risks to investor protection are not sufficiently controlled or reduced. Further to the ESMA statement published in June 2017, ESMA was considering the possible use of its product intervention powers under Article 40 of MiFIR to address these investor protection risks.
In particular, ESMA was considering measures to prohibit the marketing, distribution or sale to retail clients of binary options; and restrict the marketing, distribution or sale to retail clients of CFDs, including rolling spot forex.
The restrictions on CFDs currently under review are leverage limits on the opening of a position between 30:1 and 5:1, whose limit will vary according to the volatility of the underlying asset.
ESMA noted that it will conduct a brief public consultation in January 2018 on this matter.
Separately, the Financial Conduct Authority or FCA said Friday that it supported ESMA in its consideration of potential EU-wide product intervention. domestic policy work on permanent product intervention measures applicable to firms offering CFDs and binary options to retail clients is ongoing. Any permanent FCA policy measures would take in to account any prospective ESMA measures.
For comments and feedback contact: editorial@rttnews.com
Business News
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.