ESMA clarifies requirements for CFD risk warnings

“The regulator explains how a firm should ensure the prominence of its CFD risk warnings” reports Good practices that indicate firms have given sufficient prominence to a risk warning include: Examples of poor practice that will indicate firms have not given sufficient prominence to a risk warning include:. The updated Q&A section provides clarification on the application of the temporary product intervention measures in relation to the prominence of risk warning regarding offering of CFDs to retail clients.In deciding whether a particular risk warning is ‘prominent’, firms have to consider the target audience, the characteristics of CFDs and the likely information needs of the average recipient of the communication, ESMA says.

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