Plus500 has stopped offering new CFD trading accounts
to residents of Spain, tightening access to leveraged products in a market
where regulators already restrict advertising and distribution to retail
investors.
The decision comes as Spain continues to apply some of
the toughest rules in Europe on how firms can market and sell CFDs to
non-professional clients.
Plus500 Changes Onboarding for Spain
Plus500 now blocks new CFD account openings for users resident in Spain, according to information on the company’s registration page. Spain’s securities regulator, the Comisión Nacional
del Mercado de Valores, rolled out a new set of rules for the CFD space in 2023.
The measures prohibit the marketing of CFDs to retail
clients in Spain and extend to banning introducing-broker and influencer-style
promotion, as well as advertising through events or using celebrities to
endorse the services.
Continue reading: Plus500 Reports Half Its Revenue Now Comes From Customers Trading Over Five Years
The framework aimed to curb the ways firms promote
leveraged trading to the public rather than outlawing CFDs themselves. While
the rules set formal limits on how providers reach retail investors, their
practical impact depends on how firms interpret and apply them in day-to-day
operations.
The tight regulations is behind the decline in the region’s leveraged trading space. The space shrunk to a fraction of its 2021 peak, with the number of active FX and CFD traders dropping another 10% to around 35,000 as of early last year, according to a report by Investment Trends.
ESMA Rules and Spain’s Stricter Line
ESMA rules created a baseline for investor protection
but allowed national regulators to adopt stricter measures where they saw
additional risks.
Read more: Spain’s Expanded Restrictions on CFDs Set for July 20, Gets ESMA Backing
The measures apply to all firms authorized to provide
investment services in Spain, regardless of where the firm is based or whether
it operates through a branch or cross-border passporting.
ESMA summarized the effect by stating that marketing,
distribution and sale of CFDs by means of advertising communications aimed at
retail investors in Spain is prohibited.
For Spanish residents, Plus500 now focuses on
non-leveraged equity trading through its Invest platform, which allows access
to real stocks in Spain and other markets.
This article was written by Jared Kirui at www.financemagnates.com.
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