EU Warns Traders Against Selling Risky Derivative Product

Law360, London (July 12, 2019, 5:47 PM BST) -- Europe's top securities regulator warned investment firms Friday to stop tempting inexperienced investors into buying risky derivatives banned by a number countries by sweetening the potential payout, saying it has "serious concerns" about their marketing tactics.

The European Securities and Markets Authority said derivatives traders selling complicated financial products known as a contract for difference, or CFD, have to stop enticing customers without a professional background into investing.

The financial product is a type of spreadbetting and trades on the price movement of securities and derivatives, allowing investors to profit from changes in the value of assets. A number of regulators,...

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