The European Securities and Markets Authority (ESMA) has formally adopted new measures on the provision of contracts for differences (CFDs) and binary options to retail investors. The measures have been published in the Official Journal of the European Union (OJ) today. They will start to apply from 2 July 2018 for binary options and from 1 August 2018 for CFDs and will apply as follows: (1) Binary Options (from 2 July 2018) – a prohibition on the marketing, distribution or sale of binary options to retail investors; and (2) Contracts for Differences (from 1 August 2018) – 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.
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Jean-Paul Servais, chairman of the Financial Services and Markets Authority (FSMA), has been re-elected as vice-chairman of the International Organization of Securities Commissions (IOSCO) and to chairman of the Europees Regionaal Comité.

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The Financial Conduct Authority (FCA) has announced new proposals designed to protect millions of people who use overdrafts and high-cost credit. The changes the FCA are consulting on follow an in-depth review into the high-cost credit market and are expected to reduce the costs for consumers and give them greater control over their finances. These changes are wide-ranging and some specific proposals are being consulted on from today. In addition, the FCA will gather additional evidence and carry out further analysis before any formal decisions can be made on a number of other issues.
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The Financial Conduct Authority (FCA) has published a Decision Notice, which sets out its decision to ban Darren Lee Newton from working in any regulated activity in the financial services sector. Mr Newton is disputing the FCA’s decision and has referred the matter to the Upper Tribunal at which the FCA and Mr Newton will be able to present their cases. Accordingly, this decision notice has no effect pending the determination by the Tribunal.
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Speech by Christopher Woolard, Executive Director of Strategy and Competition at the FCA, delivered at the Anti-Money Laundering TechSprint, London: “The FCA’s own financial crime survey, in which firms submitted a year’s worth of data, showed that employees at all levels raised over 920,000 internal suspicious activity reports to their money laundering reporting officers. Meanwhile, more than 1.1m prospective customers were refused services amid financial crime concerns. This isn’t just a compliance issue, it’s a human one.”

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During the Biannual high-level networking seminar on economic and financial issues, organised by Danmarks Nationalbank, Copenhagen, Ms Sabine Lautenschläger, Member of the Executive Board of the European Central Bank and Vice-Chair of the Supervisory Board of the European Central Bank gave an interesting speech. You can read it on oue website.

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Speech by Mr Agustín Carstens, General Manager of the BIS, at the Sveriges Riksbank’s 350th anniversary conference on “350 years of central banking: the past, the present and the future.” The Riksbank’s journey from public savings bank to modern central bank epitomises the central bank as an adaptive, learning and improving organisation. Often crisis spurs adaptation, as it did in 2008. The Riksbank’s evolution points to broad trends in central banking towards fiat money, public governance, centralised payments and a lender of last resort role. Mr Agustín Carstens: “I submit that these trends will persist”.
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Today, the General Data Protection Regulation (GDPR) becomes fully applicable to all companies and organisations operating within the EU. The European Data Protection Supervisor welcomes the news that the EU legislator has now reached a political agreement on equivalent rules on data protection in the EU institutions and bodies and they will continue to support the EU institutions to ensure that they are ready to implement these rules from day one, the European Data Protection Supervisor (EDPS) said today.

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By Abigail Myers-Antiaye, Global Country Compliance Manager at Tungsten Network

As you may know, the Italian government is on the verge of making all B2B e-invoicing mandatory in an attempt to close its VAT gap. This decision could recover billions but also violates several terms of the EU VAT Directive, potentially pushing the EU to shift its policies. In addition, the Italian Government’s initiative could see a domino effect across Europe as other EU members follow suit.

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The European Banking Authority (EBA) launched two consultations on draft regulatory technical standards (RTS) specifying an economic downturn and on a set of Guidelines related to the estimation of loss given default (LGD) appropriate for conditions of an economic downturn. The draft RTS specify the nature, severity and duration of an economic downturn, while the Guidelines focus on the appropriate estimation of the LGD in a situation of economic downturn. This package is part of the EBA’s broader work on the review of the IRB approach aiming at reducing the unjustified variability in the outcomes of internal models, while preserving the risk sensitivity of capital requirements. The consultations run until 22 June 2018.
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