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Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) Graurheindorfer Str. 108 53117 Bonn, Germany http://www.bafin.de
Contact Ms Anja Schuchhardt +49 228 41083262
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Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin)

BaFin maintains prohibition of binary options for retail clients in Germany

(PresseBox) (Bonn, )
The marketing, distribution and sale of binary options to retail clients will remain prohibited in Germany. This is set out in a general administrative act issued by BaFin in response to the expiry of the product intervention measure imposed by the European Securities and Markets Authority (ESMA).

In particular, BaFin sees risks and thus considerable investor protection concerns in that binary options are complex and lack transparency, especially with regard to the calculation of their performance and the underlying. Unlike other financial instruments, binary options are not traded on a market where prices result from supply and demand. Instead, it is the provider who determines the price, and clients are not in a position to understand it or check its accuracy. As binary options typically are extremely short-term instruments, it is difficult for retail investors to accurately assess the risk-return profile. Moreover, binary option providers usually act as the direct counterparty to their clients' trades. This places the provider's interests in direct conflict with those of its investors. For instance, there is a risk that providers will manipulate the price of the underlying at expiry of the binary option or change the term of the binary option by seconds or milliseconds so as to avoid having to pay out on the option contract.

The marketing, distribution and sale of binary options to retail clients have so far been prohibited in the European Union due to a temporary measure imposed by ESMA. This measure expires on 1 July 2019. BaFin's general administrative act is published on the BaFin website and will be applicable from 2 July 2019.
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The publisher indicated in each case is solely responsible for the press releases above, the event or job offer displayed, and the image and sound material used (see company info when clicking on image/message title or company info right column). As a rule, the publisher is also the author of the press releases and the attached image, sound and information material. The use of information published here is generally free of charge for personal information and editorial processing. Please clarify any copyright issues with the stated publisher before further use. In case of publication, please send a specimen copy to service@pressebox.de.