Financial Regulation
ESMA Warns on Risky 'Prediction Market' Investments
The European Securities and Markets Authority (ESMA) is reminding investment firms of the EU-wide ban on offering binary options to retail clients. The warning comes amid the growing popularity of so-called "prediction markets," which can have similar characteristics to these prohibited high-risk products. ESMA stresses that existing rules must be strictly followed to protect consumers from the risk of significant, rapid financial losses. The authority is closely monitoring the market for any products that may try to circumvent the ban.
Regulators are warning consumers about high-risk online "prediction markets" that resemble banned products.