To protect retail investors, CySEC has implemented several regulations.
CySEC, Cyprus Securities and Exchange Commission, has released the official statement regarding to “Bonus Offerings” of CySEC licensed brokers to retail investors.
As it has been a topic of conversation for the past few months since 2016, CySEC seems to be implementing(or start implementing) some restrictions on the conditions of Bonus Promotions.
Let us summarize some of the important statements from the announcement for you.
“CIFs must avoid the practice of offering bonuses that are designed to incentivise retail clients to trade in complex speculative products.”
The “Complex Speculative Products” in this case, include CFDs, binary options and rolling spot Forex.
It is now forbidden because CySEC doesn’t find this kind of promotions as Honest, Fair or Professional for a majority of retail investors.
“Not Cash Back but Lower Spread”
In the statement, it says “If a CIF wishes to reward its clients, it can offer to them for example lower spreads instead of a return of an amount”.
By doing this, a FX broekr wouldn’t be violating the new regulations.
Traders can benefit the same with this condition, so it shouldn’t affect the service of Financial Brokers.
“The protection of clients’ interests is of utmost importance to CySEC.”
The statement has been highlighted to ensure retail investors that they are protected by CySEC.
There has been several situations that investors have blamed CySEC for some reasons though, it is good to know that the financial authority intends to protect the retail investors as priority.
Are you interested in reading the official statements? You can review it from below.