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BaFin publishes guidelines for CFD trading

Chris Hamblin, Editor, London, 23 October 2020

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Germany's all-in-one financial regulator has published its Guidelines on the General Administrative Act of 23 July 2019 regarding contracts for differences.

The guidelines are designed to help CFD providers when they adapt the marketing, distribution and sale of CFDs to the requirements of the Act and to prevent infringements of the Act.

BaFin makes it clear - and not for the first time - that the requirements of the general administrative act must be implemented in a legally unambiguous manner in CFD providers’ terms and conditions of business. It also says that risk warnings are compulsory for smartphone apps, videos and social media messages, and that these risk warnings must be prominently visible to all HNW/retail investors.

The requirement to include a risk warning also applies to CFD providers’ advertising and marketing partners, such as affiliate partners and introducing brokers. CFD providers must ensure that these also comply with the requirements of the Act. If a partner breaks the law, the CFD provider in question is held guilty.

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