The Parliament passed a law banning the promotion and sale of complex financial products, such as binary options and contracts for difference (CFDs), to ordinary investors. MP Radu Marian, who is the sponsor of the bill, said that the measure aims to protect citizens from high risks of financial losses, especially in the absence of advanced knowledge about international markets, IPN reports.
The legislative changes refer both to the prohibition of marketing, distribution or sales of binary options, as well as to the restriction of these actions in relation to CFDs to retail investors in Moldova. The provisions also cover the use of training, social media platforms, radio and TV stations. Only entities and brokers licensed by the National Commission for Financial Markets will be able to carry out such transactions.
“What are these instruments? Let me explain: When someone uses these operations, the person does not invest in that asset (stock, currency, etc.), but actually places a bet – either it goes up or down. If the person guesses – they win the money, if not – they lose it all”, said Radu Marian.
According to him, the given transactions can become even more dangerous if leverage is applied. If the leverage for example is x10, then the person can lose 10 times more than the amount invested.
“In recent years, hundreds of citizens have been lured by aggressive advertisements that promise quick gains through risky transactions, often without understanding what they are facing. Many times, they lose all their savings, and those who sold them these services profit from their losses. European statistics show that 80% of people who invest in CFDs lose their money,” said the MP.
The draft law will be adopted after it is given a final reading.
