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DE - New guidelines on CFD trading in Germany

18/01/2018

On 29 November 2017, The Federal Financial Supervisory Authority (BaFin) published guidelines on trading in financial contracts for difference (CFDs).

On 29 November 2017, The Federal Financial Supervisory Authority (BaFin)  published guidelines on trading in financial contracts for difference (CFDs). These guidelines are intended to serve as an aid for CFD issuers in adapting their conditions of contract so that retail investors are no longer offered contracts with an additional payments obligation. Such contracts have been banned in Germany since 10 August 2017.Use of the term "additional payments obligation" is not the decisive factor here. BaFin also considers the terms "deficit", "shortfall", "difference", "negative balance" and any paraphrases to be indicative of an additional payments obligation if they oblige retail investors to settle a negative balance on their CFD account. If providers contravene this new rule, BaFin can apply administrative enforcement measures (such as coercive fines) as well as impose administrative fines.

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