CSSF Regulation No 19-06 of 26 June 2019 is a CSSF regulation, published 26 June 2019. Subject: Restricting the marketing, distribution or sale of contracts for differences to retail clients.
\nLegal basis: Law of 23 December 1998 creating the CSSF, Law of 5 April 1993 on the financial sector.
\nRelevant for: Consumer protection, Credit institutions, Investment firms.
\nMain topic: MiFID II. Keywords: Consumer protection, Product intervention measures, Trading venue, Transaction reporting.
\nIn case of discrepancies between the French and the English text, the French text shall prevail.
\nCSSF Regulation No 19-06 of 26 June 2019 restricting the marketing, distribution or sale of contracts for differences to retail clients
\nHaving regard to Article 108a of the Constitution; Having regard to the Law of 23 December 1998 establishing a financial sector supervisory commission (\"Commission de surveillance du secteur financier\"), and in particular Article 9(2) thereof; Having regard to the Law of 5 April 1993 on the financial sector (LFS), and in particular point (13) of Article 53(1) thereof, pursuant to which the CSSF, in its capacity as designated authority, may suspend the marketing or sale of financial instruments; Having regard to Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation EU No 648/2012, and Article 42 thereof, pursuant to which the CSSF, in its capacity as competent authority, may suspend the marketing, distribution or sale of financial instruments; Having regard to the European Securities and Markets Authority Decision (EU) 2018/796 of 22 May 2018 to temporarily restrict contracts for differences in the Union in accordance with Article 40 of Regulation (EU) No 600/2014 of the European Parliament and of the Council; Having regard to the opinion of the Consultative Committee for Prudential Regulation;
\nThe Executive Board of the Commission de Surveillance du Secteur Financier, Decides:
\nArticle 1 Definitions For the purposes of this decision: (a) ‘contract for differences’ or ‘CFD’ means a derivative other than an option, future, swap or forward rate agreement, the purpose of which is to give the holder a long or short exposure to fluctuations in the price, level or value of an underlying, irrespective of whether it is traded on a trading venue, and that must be settled in cash or may be settled in cash at the option of one of the parties other than by reason of default or other termination event; (b) ‘excluded non-monetary benefit’ means any non-monetary benefit other than, in so far as they relate to CFDs, information and research tools; (c) ‘initial margin’ means any payment for the purpose of entering into a CFD, excluding commission, transaction fees and any other related costs; (d) ‘initial margin protection’ means the initial margin determined by Annex I; (e) ‘margin close-out protection’ means the closure of one or more of a retail client's open CFDs on terms most favourable to the client in accordance with Articles 24 and 27 of Directive
\n2014/65/EU 1 when the sum of funds in the CFD trading account and the unrealised net profits of all open CFDs connected to that account falls to less than half of the total initial margin protection for all those open CFDs; (f) ‘negative balance protection’ means the limit of a retail client's aggregate liability for all CFDs connected to a CFD trading account with a CFD provider to the funds in that CFD trading account.
\nThe text above is the opening of the document; the PDF carries the whole.
\nDocument page, PDF. Source: Commission de Surveillance du Secteur Financier (CSSF), reproduced with the CSSF's consent. The French text prevails.
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