How Forex Marketers Can Adjust to the New ESMA Ruling
The business environment is normally tied to the bureaucratic decisions of state entities. Forex traders often must realign their approaches in order to stay in line with regulations. Most forex strategies for beginners indeed should take into account the changes that often occasion the trading realm. Over the last few years, the currency trading business has been hit by a raft of regulations. The first target was the cryptocurrency trading market which was subjected to new rules by various regulatory authorities around the world. Various directives were particularly issued in Europe and they have had a significant impact on the overall market.
Ever since institutions in the EU market started coming up with new directives against digital currencies and forex trading, multinational web companies have also seemed to follow in the steps. Companies like Google, Facebook and Twitter have come up with stricter policies that seek to limit cryptocurrency activities on the web. Online money transfer services have also limited the kind of transactions users can carry out especially those that revolve around cryptocurrencies. Forex brokers have been hard hit by most of these regulations which require them to have particular certifications in order to engage in their trade.
The ESMA Ban
Just recently, the European Securities and Markets Authority put in place laws that will completely ban some CFD products and binary options in Europe. The laws are specifically directed at brokers. The rationale behind the laws is that a lot of customers lose their money unjustly by investing in risky opportunities. Previous studies have shown that customers lose huge amounts of money in these investments. All aspects that relate to binary options trading will thus be affected by the new laws. All this means that companies involved in the business will have to come up with more protective measures that will convince regulators that the business is safe.
photo/ Gerd Altmann
How Brokers Can Cope With The Ruling
For those involved in the forex business as marketers and brokers, a few adjustments will be needed to survive in the new dispensation. Here are the key things brokers will need to adopt urgently.
- Explicit issuance of warnings
Regulations previously had a vague requirement that brokers should give fair warnings to their clients. The latest regulations, however, specify the kind of warnings that clients must be given. The regulations also touch on the nature of explicitness the warnings must have in order to be valid.
- Creative online advertisements
The advertisements done especially on social media must be redesigned and pushed to clients in new and innovative ways. There are clear grey areas that give brokers the chance to place advertisements that will not contravene the new provisions. Advertisements are crucial and doing them creatively will be sufficient.
- Damage control and maintenance
Finally, brokers must now engage their customers and inform them of the changing nature of the business. This is one of the easiest ways to sustain any relationships that have been formed over time. With the right messages, brokers will be able to control any damage that the new regulations might have caused between them and their clients.
Resource: Forex Strategies For Beginners in Hungary (Forex kereskedés lépésről lépésre)
Author: Andrew Cioffi
