CNMV bans CFD advertising in Spain: over 70% of investors lose money


The CNMV has published its new guidelines for the marketing, distribution or sale of CFDs and other leveraged instruments to retailers, which were approved this week by the CNMV’s Executive Committee. The new measures, which will be published in the BOE in the coming days, include “the prohibition of CFD advertising aimed at retailers or the general public, the sponsorship of events (including sporting events), as well as brand advertising and the use of figures of public relevance for advertising purposes”.

This has been confirmed by CNMV sources, who have also added that certain remuneration policies for the commercial network are prohibited (for example, linking their remuneration to the number of clients captured, to the income they generate for the entity or to the losses they obtain) and other sales techniques, such as the use of call centres, webinars or demo accounts, which encourage the distribution of these products among retail investors.

The Executive Committee of the CNMV has considered that CFDs are of “high risk and complexity” and that they are not, in general, for retail investors, as other supervisors such as the French and Belgian supervisors consider. They leave a high percentage of losses among investors: between 70% and 90% depending on the institutions.

According to CNMV figures, CFDs continue to be the main derivative product marketed to retailers, something they expect to change in the future. Thanks to the measures adopted so far, up to 12 entities operating in Spain without a branch had ceased marketing these products in recent years and two entities with an establishment or agent in Spain have also closed down.

Nonetheless, eight national institutions now still account for the bulk of the volume of this type of assets, which generated a total of 70 million in losses for retail investors. In 2021, up to a total of 60,000 CFD clients traded over 155 billion in nominal value.

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.