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
whose residency is in Spain. Spain’s securities regulator, the Comisión Nacional
del Mercado de Valores (CNMV), rolled out a new set of rules for the contracts
for difference (CFD) sector 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.
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.
EU-wide product intervention measures for CFDs,
introduced by ESMA in 2018, imposed leverage caps, margin close-out rules,
negative balance protection and standardized loss warnings for retail traders.
ESMA Rules and Spain’s Stricter Line
These rules created a baseline for investor protection
but allowed national regulators to adopt stricter measures where they saw
additional risks.
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 summarizes 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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