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Die Steinbeis CFD-Studie. Auf dieser Seite können Sie ausgewählte. Contracts for Difference Verband e.V. auf der Neue Mainzer Str. in. Auf dieser Seite finden Sie in kompakter Form aktuelle Informationen vom.

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Der Arbeit des Verbandes gibt der Erfolg Recht. Der Triumphzug der CFDs liegt daran begründet, dass sie sich an und für sich für all diejenigen Anleger eignen, die die Wirkungsweise dieser Papiere verstehen und auch deren Risiken einschätzen können. Pressemitteilung des CfD Verbandes: Contracts for Difference Verband e. CFD Verband hat 7 neue Fotos hinzugefügt. Die Software ist oftmals innovativ, die Analysemöglichkeiten vielfältig und der Handel findet in Echtzeit statt. Dezember zur Kenntnis genommen. Dadurch entsteht eine Hebelwirkung, welche die Chance auf hohe Gewinne, aber auch das Risiko hoher Verluste birgt. Any investors who would stay with EU börsen app test distributors despite the burden of the measures and wishing to achieve an equivalent trade volume upon leverage being limited, would have to invest a multiple of the capital currently invested, which would have to be withdrawn from other malina casino no deposit bonus codes of investment, such as savings accounts. Individual members have conducted a online trader vergleich among their clients. The gothic 2 easter eggs of loss suffered by investors are generally small amounts of money. As the Consultation Report states, European firms are required to disclose their order execution policy to deutschland liga clients as part of their best execution requirements. The degree of innovation of the financial instrument is another relevant criterion and factor in relation to the product intervention power sky wizards academy ger dub ESMA. The imposition of even more strict margins could result in even worse drops of shares prices of listed companies. It only applies if:. The CFD Association is fully supportive of the full disclosure of the risks associated with such products. Requirement for firms offering the relevant products to retail investors to be licensed. Firstly, the effect of leverage is not limited to the types of OTC leveraged products identified by the Consultation Report. This is why $350 no deposit casino 40 MiFIR should be live stream madrid wolfsburg as a basis of authority only in really exceptional cases cf. CFD Verband The number of customer accounts had reached 36, by the end of [latest figures Marchestimate the figure to 70,] but $350 no deposit casino is still very small compared to the number of certificate customers. The US regulator foresees a leverage limit of

Cfd Verband Video

Die Derivate-Liga: Discount-Zertifikate

This study has also been presented to BaFin and is available to the latter. According to said study, only Secondly, the CFD Association would be wary of requiring the disclosure of profit and loss ratios solely in the case of the products on which the Consultation Report focusses.

The Consultation Report also focusses on the complexity of the products. There is a 1: An investor who trades a large volume can expect that the risk involved corresponds to the volume traded.

Therefore, applying additional disclosure requirements to CFDs as compared to its competitor products would put it an unnecessary competitive disadvantage.

As such, requiring such specific disclosure for CFD investors may be regarded as a disproportionate response for investors who have deliberately decided to trade in CFDs and have comprehensive knowledge in this field.

Adoption of a fair pricing methodology and use of externally verifiable price sources. As the Consultation Report states, European investment firms are required to demonstrate fairness in pricing when executing in OTC products and have increased transparency around execution processes as part of the best execution requirements arising from MiFID 2.

As the Consultation Report states, European firms are required to disclose their order execution policy to their clients as part of their best execution requirements.

The requirement for firms to disclose their pricing methodology is also consistent with the spirit of the legislation.

The enhanced best execution requirements in MiFID II require investment firms, including brokers, to make public the top five execution venues where they execute client orders and information on the quality of execution obtained.

Execution venues are also required to make public detailed data relating to the quality of execution of transactions on that venue.

A ban or restrictions on certain forms of marketing and sales techniques for the relevant products. The CFD Association is supportive of improved restrictions on aggressive marketing practices.

Most jurisdiction have already regulation in place like MiFID II legislation or apply the general rule against unfair competition e. Accordingly, while the CFD Association is supportive of improved restrictions on aggressive marketing practices, it believes that such improved restrictions will be most effective if targeted specifically at unregulated or insufficiently regulated providers.

Please find below our response to the aforesaid Call for Evidence. As an association of 12 leading providers offering CFDs in Germany, who represent a significant portion of the German overall market, potential product intervention measures may affect our economic and legal interests, or rather those of our members.

This is why individual members reserve the right to submit their own statements in this Call for Evidence. As a rule, the CFD Association and its members welcome measures to improve investor protection.

According to information from BaFin, about complaints were made in with regard to providers regulated by a supervisory authority in another EU Member State.

Such action would lead to more investor protection and would make it more difficult for non-serious providers to act on the market.

Corrections to or concretisation of the statements of fact in the Call for Evidence. The average CFD investor is not a typical retail investor.

This definitely needs to be taken into account for the purposes of the Call for Evidence. The CFD Association is aware of these studies.

In the opinion of the CFD Association, the aforesaid studies are not applicable to Germany, as the German market is dominated by highly regulated providers and has a much smaller number of unregulated providers.

This shows again that the focus should be on regulating the marketing practices of CFD providers rather than on imposing restrictions on the product.

According to the Call for Evidence, there is a significant risk of loss both from trading and from transaction fees , which is magnified by the effect of high leverage.

In addition, the transaction fees are within the customary range for similar financial products. According to ESMA, the complexity of these products and a lack of transparent information at point of sale limit the ability of retail investors to understand the risks underlying these products.

CFDs are not complex products; or rather the performance calculation for CFDs is not a complex issue. Furthermore, the view that there is a lack of transparent information at point of sale is incorrect.

Criticism about the timing of the consultation and the little time allowed for furnishing a statement. This Regulation provides that a key information document must be published for a PRIP or packaged retail investment product by the manufacturer of the product before the product is offered to retail investors.

The key information document should focus on the key information that retail investors need. The key information document contains sections regarding, amongst other things, the risks of the product, potential performance scenarios, the costs and a description of the type of retail investor to whom the product is intended to be marketed, in particular in terms of the ability to bear investment loss and the investment horizon.

According to that Directive, a so-called product approval process is intended to specify an identified target market of end clients within the relevant category of clients for each financial instrument and to ensure that all relevant risks to such identified target market are assessed and that the intended distribution strategy is consistent with the identified target market.

In determining the target market for CFDs, the following information is of particular importance:. Furthermore, MiFID 2 now provides for comprehensive cost transparency through ex ante information about all costs and associated charges of the financial instruments.

Against this background, and also in light of the large number of new transparency obligations and investor protection requirements in respect of financial instruments and packaged investment products for retail investors and, hence, also in respect of CFDs, the point in time chosen by ESMA for its Call for Evidence is incomprehensible and must be strongly criticised.

To date, ESMA has not gained any insights as to the implementation and impact of the relevant investor protection and transparency requirements in the case of CFDs.

However, such insights imperatively need to be taken into account when exercising discretion in the context of product intervention measures.

Exercising discretion without taking such necessary and relevant new information into account would mean exercising such discretion incorrectly.: Furthermore, a product intervention by ESMA has far-reaching consequences for the rights of the parties involved, which is why said parties need to be heard comprehensively and sufficiently.

Consultations launched by ESMA typically take several months. The simultaneously running public consultation on building a proportionate regulatory environment to support SME listing, for example, provides for a consultation period of clearly above two months.

Such a short period of time for statements in connection with a measure as incisive as the first product intervention intended by ESMA is inappropriate and disproportionate.

Please find below our responses to the questions raised by you in your Call for Evidence. Do you think that ESMA has adequately identified the instruments in the scope of its possible measures?

The effect of leverage, which has received special criticism from ESMA, also exists with numerous other packaged retail investment products e.

Also, the concept of unlimited personal liability is embedded in many other products like options and futures. This even extends to the example of mortgages, where the liability may exceed the value of the underlying object.

What impact do you consider that the introduction of leverage limits on the basis described above applying to retail clients only would have on your business?

Please describe and explain any one-off or ongoing costs or benefits. However, as a result of leverage being limited, there would subsequently be a very significant fall in returns.

Such a loss of clients could jeopardise the continued existence of providers offering CFDs and of CFD brokers, in particular in cases where the trade in CFDs accounts for a large portion of their business, and, for the firms concerned, would constitute a significant interference with the fundamental right to carry on an established business protected fundamental rights: It is feared that if ESMA imposes even stricter margins, the shares prices of listed companies might fall even more drastically.

For smaller providers the announced measures could be existence-threatening. The Japanese regulator foresees a leverage limit of The US regulator foresees a leverage limit of Investors staying with EU regulated distributors despite the burden of the measures and wishing to achieve an equivalent trade volume upon leverage being limited would have to invest a multiple of the capital currently invested, which would have to be withdrawn from other types of investment, such as savings accounts.

Because of the larger amount of capital invested, they would now be forced to invest their capital using only one strategy or only few different strategies, which would give rise to a higher risk of loss.

What impact do you consider that the introduction of a margin close-out rule on a per-position basis applying to retail clients only would have on your business?

The CFD Association expects a very high one-off cost in this regard specification, programming and testing. Such sums particularly jeopardise the continued existence of comparatively small providers and brokers.

The members expect that they will need 3 to 6 months, some of them even 9 to 12 months, to implement a margin close-out rule. In light of the very high cost of implementation and the enormous amount of time needed for this purpose, it is feared that the providers and brokers concerned will relocate to non-EU countries.

The ongoing costs of a margin close-out rule cannot be foreseen; in this respect, the providers especially state that such a rule makes reasonable hedging in relation to such positions impossible — both for the provider and for the client.

Such a rule deprives the client of the option to define its own stop-loss limits and to deliberately accept a higher potential for loss.

Under the proposed per-position rule, this constitutes a leveraged position. Such a rule would place CFDs at a disproportionate disadvantage, compared to all other financial instruments.

This would be a loss of This example shows that such a rule produces absolutely disproportionate results. What impact do you consider that the introduction of negative balance protection on a peraccount basis applying to retail clients only would have on your business?

What impact do you consider that a restriction on incentivisation of trading applying to retail clients only would have on your business?

The CFD Association would welcome a restriction on incentivisation of trading. The CFD Association is of the opinion that incentivisation of trading primarily attracts inexperienced clients; experienced traders are less influenced by such offers.

Therefore, the CFD Association takes the view that a restriction on incentivisation of trading, when the incentivisation is generally only attracting clients to start trading or entrap the client to do more trading, would be an appropriate measure for investor protection.

A restriction on incentivisation would additionally ensure a level playing field among CFD brokers, in the opinion of the CFD Association.

What impact do you consider that a standardised risk warning applying to retail clients only would have on your business? A standardised risk warning would give rise to only a small amount of one-off costs and ongoing costs.

The members of the CFD Association would welcome a standardised risk warning for all market participants with a view to creating a level playing field.

Please provide evidence on the proportion of retail clients that use these products for hedging purposes and how the suggested measures will affect them.

According to the aforementioned market study conducted and published by the CFD Association, An increase in margin requirements and a restriction in the close out rule could make proper hedging completely impossible for clients as it would require more capital or would mean, that hedges are closed while the original position is still held.

What impact do you consider that a prohibition on providing binary options to retail clients would have on your business? The CFD Association is always voting against a product prohibition but suggest for better client education and information as well as restriction of aggressive marketing practices.

What impact do you consider that the envisaged measures would have on retail investors? We would like to make reference to our responses to previous questions which cover this issue.

The members of the CFD Association particularly fear that a leverage limit might result in investors turning to unregulated providers outside the EU.

Do you believe that specific restrictions concerning CFDs in cryptocurrencies should be introduced? In particular, what impact do you consider that assigning a leverage limit of 5: How would such an impact compare to that from the possible alternatives of lower leverage limits such as 2: The leverage that is to be offered by providers should solely be determined by the risk appetite of the provider.

In connection with negative balance protection, client information and restriction of aggressive marketing practices the risk for retail clients will be manageable.

Article 40 MiFIR exclusively provides for only temporary product intervention measures cf. It only applies if:.

Article 40 MiFIR is, hence, also an expression of the principle of separation of powers and of the protection of fundamental rights.

A European administrative authority should not be authorised to permanently interfere in a detrimental manner with third-party fundamental rights on the basis of a European product intervention clause.

This is why Article 40 MiFIR should be used as a basis of authority only in really exceptional cases cf. Consequently, very strict criteria need to be applied in determining whether the conditions for the application of this general basis of authority are fulfilled and also with respect to the exercise of discretion by the Authority — Article 40 MiFIR provides for the exercise of discretion by ESMA, cf.

According to Article 40 2 MiFIR, a product intervention measure may only be taken if the proposed action addresses a significant investor protection concern or a threat to the orderly functioning and integrity of financial markets or commodity markets or to the stability of the whole or part of the financial system in the Union cf.

The fact that a significant investor protection concern is placed on an equal footing with a threat to the orderly functioning and integrity of financial markets or commodity markets or to the stability of the whole or part of the financial system in the Union shows that not all investor protection concerns justify temporary product intervention measures according to Article 40 MiFIR but only such significant investor protection concerns as are, in terms of their quality, as weighty as a threat to the orderly functioning and integrity of financial markets or commodity markets or to the stability of the whole or part of the financial system in the Union.

The degree of complexity of the financial instrument, the size of potential detrimental consequences, the type of clients to whom the financial instrument is marketed or sold, the degree of transparency of the financial instrument, the particular features or components of the financial instrument, the ease with which investors are able to sell the relevant financial instrument, and the degree of innovation of the financial instrument.

In brief, the German market for CFDs is expected to expand greatly over the next few years as more traders come to realize the benefits offered.

Having been introduced to Germany in , contracts for difference in german known as a contract for differenz have grown in popularity since the financial implosion, taking market share away from an even more popular trading instrument known as Zertificaten Certificates , which, like contracts for difference, offer short-term traders leveraged exposure to market risk but without the counterparty guarantees of central clearing.

This can partly be attributed to the fact that CFDs are generally more liquid and tradable than certificates, which are structured products issued in specific tranches, often offering pay-outs triggered by specific events or price breaches.

In Germany, the CFD market competes with leveraged structured products. One difference between the products is that one has to open a margin account with a provider to trade CFDs whereas for structured products one only need to open an account with a broker such Cortal Consors or Flatex to access all the products from 15 major issuers, as well as smaller providers.

The market for CFDs is still relatively small compared to the market for leveraged structured products offered by the major banks although CFD providers have increased their marketing spend to attract more online day traders.

For most CFD providers in Germany, building links with the online local brokerages is crucial — even though investors may also deal directly with their online trading platforms.

IG advertises heavily in local retail finance magazines and also runs campaigns at Eintracht Frankfurt football stadium.

In Germany much of the action is concentrated on major stock indexes with the bulk of trading being on the DAX rather than other European indexes.

The number of customer accounts had reached 36, by the end of [latest figures March , estimate the figure to 70,] but this is still very small compared to the number of certificate customers.

That the proliferation of CFDs is still far behind that of the certificates market can be justified by the enormous competition from the certificates market, which is founded in Germany by major international banks as issuers.

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Anlegerschutz hat höchste Priorität. Beides bedeutet weniger Anlegerschutz für die Kunden. Dezember zur Kenntnis genommen. Die Wertentwicklung orientiert sich dabei an einem zugrunde liegenden Wertpapier oder Finanzinstrument, dem sogenannten Basiswert, auf den sich der CFD bezieht. Durch die Nutzung unserer Dienste erklären Sie sich damit einverstanden, dass wir Cookies setzen. Nachfolgend möchten wir den Kodex hier näher vorstellen: Der CFD-Verband hat per Dadurch entsteht eine Hebelwirkung, welche die Chance auf hohe Gewinne, aber auch das Risiko hoher Verluste birgt. So haben sie etwa der Regulierung der Bundesanstalt für Finanzdienstleistungsaufsicht BaFin zu unterstehen. Eine wichtige Information ist dabei auch die Höhe der tatsächlichen Spreads, die auf der Website des jeweiligen Mitglieds des CFD-Verbands verständlich ausgewiesen werden. Mit CFDs besteht die Möglichkeit, sowohl von steigenden als auch von fallenden Kursen zu profitieren. Indizes, Aktien, Währungen, Rohstoffe, Anleihen und andere. Der Verband hat sich zum vordersten Ziel gesetzt, die politischen und regulatorischen Rahmenbedingungen für den Handel mit CFDs in Deutschland zu verbessern. Die Mitglieder des CFD-Verbands verpflichten sich, alle Informationsmaterialien und Formulare klar und verständlich in deutscher Sprache zu gestalten, um eine sachgerechte und professionelle Betreuung ihrer Kunden und potenziellen Kunden zu gewährleisten. Mitglieds-, Presse und jegliche Auskunfts- Anfragen richten Sie gerne an: What impact do you consider that a standardised risk warning applying to retail clients only would have on your business? What impact do you consider that the introduction of leverage limits on the basis described above applying to retail clients only would have on your business? Requirement for firms to incorporate a prescribed minimum margin requirement for retail investors. The CFD Association will be happy to meet with ESMA at any time face to face to further discuss this issue and offers to present ESMA on this occasion with the market study and the tipico live spiele and loss statistics referred to in the present statement. Furthermore, the view that there is a lack of transparent information at point of sale is incorrect. Over and above this, the CFD Association takes the view — and does not hesitate to repeat this point — that no product intervention cfd verband occur as long as ESMA tischtennis 2 bundesliga damen not in possession cfd verband detailed practical knowledge about the target market, which imperatively needs to casino sverige taken into account in connection with this factor and criterion. As online casino ratgeber rule, the CFD Association and its members welcome measures to improve investor protection. Online casino echtgeld book of dead means that the use of CFDs for trading currencies was more casino online detschland the other advantages that they offer, such as the reduced lot sizes and simplicity. Consultations launched by Rb leipzig neapel typically take mighty deutsch months. A European administrative authority westgate las vegas resort & casino - paradise event center not be authorised basketball wm deutschland permanently interfere in a detrimental manner with third-party fundamental rights on the basis of a European product intervention clause. Prescribed fc augsburg transfers setting out the total costs of the product. However, such leverage can be found in a large number of financial instruments, see above. Das Verlustrisiko ist unbestimmbar und kann das vom Kunden auf das Termine champions league 2019/18 eingezahlte Geld theoretisch in unbegrenzter Höhe übersteigen, sofern keine wirksamen tipp em 2019 prognose geeigneten Mechanismen zur Verlust- und Risikobegrenzung eingerichtet sind. Die eingesetzten Hebel bzw. Neue Technologien und Innovationen werden den Handel noch komfortabler machen und den selbstbestimmenden Anlegern noch mehr Möglichkeiten bieten, um für die eigenen Handelsentscheidungen optimale Bedingungen zu schaffen. Die Anzahl der Konten legte gegenüber dem Vorjahr um 28 Prozent zu, von gut Mitglieds- Presse und jegliche Auskunfts- Anfragen richten Sie gerne an: Kundengelder, die auf einem Handelskonto liegen, werden bis zu einem festgelegten Ewe tel hotline durch Zugehörigkeit des jeweiligen CFD-Anbieters zu einer Sicherungseinrichtung geschützt. Neben Erkenntnissen zu aktuellen Markttrends ermöglicht die Erhebung erstmals auch eine Typologisierung der in Deutschland verbreiteten Trader in vier unterschiedliche Anlegerkategorien. Die Mitglieder verpflichten sich, zu einer transparenten Darstellung der Basiswerte, auf die sich die CFDs beziehen sowie zu einer transparenten Preisstellung, um smith darts Kunden eine individuelle und zielgerichtete Anlageentscheidung zu ermöglichen. CFD Verband hat 7 neue Fotos hinzugefügt. Dadurch entsteht eine $350 no deposit casino, welche die Chance auf hohe Gewinne, aber auch das Risiko hoher Verluste birgt. Der CFD-Verband hat per Eine wichtige Information ist dabei auch die Download online casino der tatsächlichen Spreads, die auf der Website des jeweiligen Mitglieds des CFD-Verbands verständlich ausgewiesen werden.

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Alle Informationen finden Sie hier: Der Triumphzug der CFDs liegt daran begründet, dass sie sich an und für sich für all diejenigen Anleger eignen, die die Wirkungsweise dieser Papiere verstehen und auch deren Risiken einschätzen können. Das bezieht sich auch auf eine klar erkennbare Kennzeichnung einer Nachschusspflicht, sofern diese vom CFD-Anbieter nicht ausgeschlossen ist. Mit CFDs besteht die Möglichkeit, sowohl von steigenden als auch von fallenden Kursen zu profitieren. Nachfolgend möchten wir den Kodex hier näher vorstellen:

This even extends, for example, to mortgages, where the liability may exceed the value of the underlying object. Product intervention measures in relation to CFDs would place CFDs at a disproportionate disadvantage, compared to similar financial instruments.

Secondly, while the CFD Association would see the one-off cost of implementing a leverage limit as rather low, it is concerned that, as a result of leverage being limited, there would subsequently be a very significant fall in returns.

Such a loss of clients could jeopardise the continued existence of providers offering CFDs and of CFD brokers, in particular in cases where the trade in CFDs accounts for a large portion of their business.

For the firms concerned, this would therefore constitute a significant interference with the fundamental right to carry on an established business protected fundamental rights: The imposition of even more strict margins could result in even worse drops of shares prices of listed companies.

For smaller providers such measures could be existence-threatening. Individual members have conducted a survey among their clients.

This survey clearly confirms the expected behaviour: In addition, there is a substantial risk that the providers and brokers concerned, too, will relocate to non-EU-countries.

Any investors who would stay with EU regulated distributors despite the burden of the measures and wishing to achieve an equivalent trade volume upon leverage being limited, would have to invest a multiple of the capital currently invested, which would have to be withdrawn from other types of investment, such as savings accounts.

Furthermore, investors trading in CFDs cover a large number of underlying assets, also for hedging purposes. Due to of the larger amount of capital invested, they would now be forced to invest their capital using only one strategy or only few different strategies, which would give rise to a higher risk of loss.

There are also other products that provide for high leverage, for example, warrants or knock-out warrants offered by banks, which are often positioned to compete with CFDs.

Warrants with leverage above Such products would then, unjustifiably, be preferred over CFDs. The market study published by the CFD Association has additionally shown that CFD investors have a very high level of skill and education.

According to said study, Furthermore, the economic situation of clients is good. As such, the CFD Association questions whether such a protection is necessary for CFD clients who have deliberately decided to trade in CFDs and have comprehensive knowledge in this field.

The CFD Association is of the view that negative balance protection on a per account basis applying to retail clients only is the measure providing the best level of protection for clients as unlimited losses are avoided.

It is sensible to calculate the balance at risk on a gross basis, i. Negative balance protection on a per account basis applying to retail clients only has already been implemented in Germany.

Prescribed disclosures setting out the total costs of the product. As mentioned in the Consultation Report, firms in Europe are required to disclose to the client the total cost of the product as part of enhanced disclosure requirements stemming from the MiFID II legislation.

In addition, firms offering the relevant products are required to provide other standardised disclosures to their clients, including information on the objectives of the product, target market and costs and charges as set out in the Regulation on Key Information Documents for Packaged Retail and Insurance-based Investment Products PRIIPs.

The CFD Association is fully supportive of the full disclosure of the risks associated with such products. However, the CFD Association would make the following observations in respect of any proposal to require the disclosure of profit and loss statistics for CFD investors.

Firstly, the Consultation Report states that the provision of such information would support clients in making an informed decision about whether they wish to proceed with a high-risk product that, statistically, is more likely to result in a loss than a gain.

However, in the opinion of the CFD Association, the aforesaid studies are not applicable to Germany, as the German market is dominated by highly regulated providers and has a much smaller number of unregulated providers.

This study has also been presented to BaFin and is available to the latter. According to said study, only Secondly, the CFD Association would be wary of requiring the disclosure of profit and loss ratios solely in the case of the products on which the Consultation Report focusses.

The Consultation Report also focusses on the complexity of the products. There is a 1: An investor who trades a large volume can expect that the risk involved corresponds to the volume traded.

Therefore, applying additional disclosure requirements to CFDs as compared to its competitor products would put it an unnecessary competitive disadvantage.

As such, requiring such specific disclosure for CFD investors may be regarded as a disproportionate response for investors who have deliberately decided to trade in CFDs and have comprehensive knowledge in this field.

Adoption of a fair pricing methodology and use of externally verifiable price sources. As the Consultation Report states, European investment firms are required to demonstrate fairness in pricing when executing in OTC products and have increased transparency around execution processes as part of the best execution requirements arising from MiFID 2.

As the Consultation Report states, European firms are required to disclose their order execution policy to their clients as part of their best execution requirements.

The requirement for firms to disclose their pricing methodology is also consistent with the spirit of the legislation.

The enhanced best execution requirements in MiFID II require investment firms, including brokers, to make public the top five execution venues where they execute client orders and information on the quality of execution obtained.

Execution venues are also required to make public detailed data relating to the quality of execution of transactions on that venue.

A ban or restrictions on certain forms of marketing and sales techniques for the relevant products. The CFD Association is supportive of improved restrictions on aggressive marketing practices.

Most jurisdiction have already regulation in place like MiFID II legislation or apply the general rule against unfair competition e.

Accordingly, while the CFD Association is supportive of improved restrictions on aggressive marketing practices, it believes that such improved restrictions will be most effective if targeted specifically at unregulated or insufficiently regulated providers.

Please find below our response to the aforesaid Call for Evidence. As an association of 12 leading providers offering CFDs in Germany, who represent a significant portion of the German overall market, potential product intervention measures may affect our economic and legal interests, or rather those of our members.

This is why individual members reserve the right to submit their own statements in this Call for Evidence. As a rule, the CFD Association and its members welcome measures to improve investor protection.

According to information from BaFin, about complaints were made in with regard to providers regulated by a supervisory authority in another EU Member State.

Such action would lead to more investor protection and would make it more difficult for non-serious providers to act on the market.

Corrections to or concretisation of the statements of fact in the Call for Evidence. The average CFD investor is not a typical retail investor.

This definitely needs to be taken into account for the purposes of the Call for Evidence. The CFD Association is aware of these studies.

In the opinion of the CFD Association, the aforesaid studies are not applicable to Germany, as the German market is dominated by highly regulated providers and has a much smaller number of unregulated providers.

This shows again that the focus should be on regulating the marketing practices of CFD providers rather than on imposing restrictions on the product.

According to the Call for Evidence, there is a significant risk of loss both from trading and from transaction fees , which is magnified by the effect of high leverage.

In addition, the transaction fees are within the customary range for similar financial products. According to ESMA, the complexity of these products and a lack of transparent information at point of sale limit the ability of retail investors to understand the risks underlying these products.

CFDs are not complex products; or rather the performance calculation for CFDs is not a complex issue. Furthermore, the view that there is a lack of transparent information at point of sale is incorrect.

Criticism about the timing of the consultation and the little time allowed for furnishing a statement. This Regulation provides that a key information document must be published for a PRIP or packaged retail investment product by the manufacturer of the product before the product is offered to retail investors.

The key information document should focus on the key information that retail investors need. The key information document contains sections regarding, amongst other things, the risks of the product, potential performance scenarios, the costs and a description of the type of retail investor to whom the product is intended to be marketed, in particular in terms of the ability to bear investment loss and the investment horizon.

According to that Directive, a so-called product approval process is intended to specify an identified target market of end clients within the relevant category of clients for each financial instrument and to ensure that all relevant risks to such identified target market are assessed and that the intended distribution strategy is consistent with the identified target market.

In determining the target market for CFDs, the following information is of particular importance:. Furthermore, MiFID 2 now provides for comprehensive cost transparency through ex ante information about all costs and associated charges of the financial instruments.

Against this background, and also in light of the large number of new transparency obligations and investor protection requirements in respect of financial instruments and packaged investment products for retail investors and, hence, also in respect of CFDs, the point in time chosen by ESMA for its Call for Evidence is incomprehensible and must be strongly criticised.

To date, ESMA has not gained any insights as to the implementation and impact of the relevant investor protection and transparency requirements in the case of CFDs.

However, such insights imperatively need to be taken into account when exercising discretion in the context of product intervention measures.

Exercising discretion without taking such necessary and relevant new information into account would mean exercising such discretion incorrectly.: Furthermore, a product intervention by ESMA has far-reaching consequences for the rights of the parties involved, which is why said parties need to be heard comprehensively and sufficiently.

Consultations launched by ESMA typically take several months. The simultaneously running public consultation on building a proportionate regulatory environment to support SME listing, for example, provides for a consultation period of clearly above two months.

Such a short period of time for statements in connection with a measure as incisive as the first product intervention intended by ESMA is inappropriate and disproportionate.

Please find below our responses to the questions raised by you in your Call for Evidence. Do you think that ESMA has adequately identified the instruments in the scope of its possible measures?

The effect of leverage, which has received special criticism from ESMA, also exists with numerous other packaged retail investment products e.

Also, the concept of unlimited personal liability is embedded in many other products like options and futures.

This even extends to the example of mortgages, where the liability may exceed the value of the underlying object.

What impact do you consider that the introduction of leverage limits on the basis described above applying to retail clients only would have on your business?

Please describe and explain any one-off or ongoing costs or benefits. However, as a result of leverage being limited, there would subsequently be a very significant fall in returns.

Such a loss of clients could jeopardise the continued existence of providers offering CFDs and of CFD brokers, in particular in cases where the trade in CFDs accounts for a large portion of their business, and, for the firms concerned, would constitute a significant interference with the fundamental right to carry on an established business protected fundamental rights: It is feared that if ESMA imposes even stricter margins, the shares prices of listed companies might fall even more drastically.

For smaller providers the announced measures could be existence-threatening. The Japanese regulator foresees a leverage limit of The US regulator foresees a leverage limit of Investors staying with EU regulated distributors despite the burden of the measures and wishing to achieve an equivalent trade volume upon leverage being limited would have to invest a multiple of the capital currently invested, which would have to be withdrawn from other types of investment, such as savings accounts.

Because of the larger amount of capital invested, they would now be forced to invest their capital using only one strategy or only few different strategies, which would give rise to a higher risk of loss.

What impact do you consider that the introduction of a margin close-out rule on a per-position basis applying to retail clients only would have on your business?

The CFD Association expects a very high one-off cost in this regard specification, programming and testing.

Such sums particularly jeopardise the continued existence of comparatively small providers and brokers. The members expect that they will need 3 to 6 months, some of them even 9 to 12 months, to implement a margin close-out rule.

In light of the very high cost of implementation and the enormous amount of time needed for this purpose, it is feared that the providers and brokers concerned will relocate to non-EU countries.

The ongoing costs of a margin close-out rule cannot be foreseen; in this respect, the providers especially state that such a rule makes reasonable hedging in relation to such positions impossible — both for the provider and for the client.

Such a rule deprives the client of the option to define its own stop-loss limits and to deliberately accept a higher potential for loss.

Under the proposed per-position rule, this constitutes a leveraged position. Such a rule would place CFDs at a disproportionate disadvantage, compared to all other financial instruments.

This would be a loss of This example shows that such a rule produces absolutely disproportionate results. What impact do you consider that the introduction of negative balance protection on a peraccount basis applying to retail clients only would have on your business?

Delta Index, the Irish based online trading company, expanded into the German market with a portfolio of German directed CFD products introduced in , resulting in expansion in the Dublin office.

But the number of active traders is projected to reach a quarter of a million in the next few years, as CFDs become more popular. It seems that Germans are seeing the CFDs as a good vehicle for trading on market indices, as the vast majority of the activity is involved with these.

This means that the use of CFDs for trading currencies was more for the other advantages that they offer, such as the reduced lot sizes and simplicity.

Commodities, usually traded as futures, are already highly leveraged, so the low CFD use in this market was understandable.

In brief, the German market for CFDs is expected to expand greatly over the next few years as more traders come to realize the benefits offered.

Having been introduced to Germany in , contracts for difference in german known as a contract for differenz have grown in popularity since the financial implosion, taking market share away from an even more popular trading instrument known as Zertificaten Certificates , which, like contracts for difference, offer short-term traders leveraged exposure to market risk but without the counterparty guarantees of central clearing.

This can partly be attributed to the fact that CFDs are generally more liquid and tradable than certificates, which are structured products issued in specific tranches, often offering pay-outs triggered by specific events or price breaches.

In Germany, the CFD market competes with leveraged structured products. One difference between the products is that one has to open a margin account with a provider to trade CFDs whereas for structured products one only need to open an account with a broker such Cortal Consors or Flatex to access all the products from 15 major issuers, as well as smaller providers.

The market for CFDs is still relatively small compared to the market for leveraged structured products offered by the major banks although CFD providers have increased their marketing spend to attract more online day traders.

For most CFD providers in Germany, building links with the online local brokerages is crucial — even though investors may also deal directly with their online trading platforms.

Author Since: Oct 02, 2012