Dutch Measures Reflect Broader EU Regulatory Trend
Following the broader regulatory trend set by the European Securities and Markets Authority (ESMA), EU countries have begun to implement their own restrictions on high-risk financial products such as binary options and contracts for difference (CFDs). The Netherlands Authority for the Financial Markets (AFM) has officially adopted similar provisions into its domestic legal framework. These regulations, designed to protect retail investors, came into force on April 19, 2019.
Context: Investor Losses and Cross-Border Operations
In recent years, retail investors across Europe have incurred substantial losses due to the aggressive marketing and operation of fraudulent broker platforms. A significant number of these binary options and CFD platforms were run not by EU entities but by operators based in Israel. Regulatory authorities in the United States and Europe have identified Israel as a key jurisdiction in the development of these platforms.
The Israeli tech sector played a notable role, with various startups creating trading and marketing solutions that were deployed across numerous unauthorized broker sites. These platforms—such as OptionStarsGlobal, Option888, Porter Finance, Vision Binary, CherryTrade, and BeeVision—targeted EU-based retail investors through deceptive marketing and aggressive sales tactics.
Global and Regional Bans
Starting in late 2017, multiple countries, including Israel, moved to outlaw the marketing and sale of binary options. ESMA followed with a temporary EU-wide ban in March 2018, designed to protect retail investors from high-risk investment products.
AFM’s National Measures Now in Force
Effective April 19, 2019, the AFM implemented the following restrictions:
|
Product Type |
Measure Type |
Target Audience |
Scope |
|
Binary Options |
Complete Ban |
Retail Investors |
From and within the Netherlands |
|
CFDs |
Marketing & Sale Restricted |
Retail Investors |
From and within the Netherlands |
AFM’s First Use of Product Intervention Powers Under MiFID II
As outlined in its April 17, 2019 press release, the Dutch regulator exercised its product intervention powers—granted through MiFID II and MiFIR since early 2018—for the first time.
Long-Term Safeguards for Retail Clients
Unlike the temporary restrictions introduced by ESMA, the AFM’s national regulations are indefinite in duration. This step positions the AFM as one of the first financial authorities in the EU to unilaterally implement ongoing protective measures for individual investors.