Nearly all national regulators in the European Union have followed the lead of the European Securities and Markets Authority and taken steps to thwart the marketing, distribution or sale of binary options and CFDs to retail clients. ESMA, however, is not satisfied and wants powers to make them do more.

The supra-national regulator has used the occasion of its report on EU product intervention policy in connection with the Markets in Financial Instruments Regulation to ask the top echelons of the EU to "address the risk of arbitrage between MiFID firms and fund management companies." This is a lament that national regulators are treating their firms differently in the field of product intervention, even though (unlike ESMA) they are empowered by Article 42 of MiFIR to prohibit or restrict the marketing, distribution or sale of financial instruments or any type of financial activity or practice permanently. ESMA's powers are temporary and currently set at three months (although this is eternally renewable); ESMA wants the limit bumped up to 18 at least. Its highest aspiration is for the EU to "facilitate the transformation of temporary measures into permanent ones."

It is also asking the EU for "further clarification of the application of product intervention measures to firms acting on a cross-border basis," powers to force any national regulator it likes to "adopt a measure" that it has already adopted, and a clear interpretation of the wording of Article 40(3) of MiFIR.

This last dictates ESMA's powers in respect of product intervention. It obliges ESMA to prove that any action it takes:

• does not have a detrimental effect on the efficiency of financial markets or on investors that is disproportionate to the benefits of the action;
• does not create a risk of regulatory arbitrage; and
• has the permission of various public bodies that make decisions about agricultural commodity derivatives - a very European preoccupation.