Earlier this year, the Spanish regulator has issued a circular with CySEC Forex Brokers requirements for targeting Spain. Why did CySEC send another notice about this case?
4 November, AtoZForex – The end of the year is nearing, and the Forex brokers are in the midst of their preparations for the MiFID II. To streamline this process, the European regulators have been actively directing the market to take the necessary steps on time. Considering that being non-compliant with MiFID II will result in hefty fines.
CySEC is one of the local watchdogs that is taking active measures to inform the CIFs of the upcoming changes. In its latest circular, the regulator sent a reminder on to the CySEC Forex Brokers requirements for targeting Spain.
New Spanish regulator requirements
Back in May 2017, CySEC already issued the C210 circular, in which the regulator clarified on the new broker’s requirements for the CNMV to solicit for Spanish traders. At the time, the Spanish regulator urged all CIFs to include warnings of trading leverage products:
“In particular, the CNMV requires firms to expressly warn retail investors resided in Spain about the risk and complexity of trading CFDs, rolling-spot FX with a leverage greater than 10:1, and Binary Options.
The CNMV considers that these warnings, which include a handwritten statement made by the client are needed to ensure that all Spanish investors have the same level of protection.”
Reminder: CySEC Forex Brokers requirements in Spain
The new circular sent out on Friday is in fact a reminder on the previous C210 circular. Through the circular C248, CySEC wants to reiterate once again that the CIFs need to comply with the obligations set out by the CNMV. CySEC has urged the Forex brokers to include the following when targeting Spanish traders:
- "CIFs must include the warnings mentioned (as explained in the Circular) on the homepage of their website and not relegate any warning to other part of their website with less direct access.
- In regard to the language of the warnings, for those websites that adopt Spanish to advertise the products and services offered, CIFs must place the text of these warnings in the same language, including those corresponding to secondary documents.
- If CIFs wish to include in their general website – and not in a specific one for each user and transaction – a warning on the “cost of closing the position”, this may be drafted in terms of the mechanism or manner for determining that cost (instead of the exact amount in euros). This will possibly reduce the delay in executing the order in question.”
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