The CNMV proposes to ban the advertising of CFD brokers in football clubs

The National Securities Market Commission (CNMV) has hit the table. Proposes banning the advertising of brokers with high-risk products in events like football matches. He warns that “in recent years there has been a considerable increase in sponsorships of football clubs and top-level players by service companies or electronic platforms whose most commercialized products are forex, CFDs, binary options or cryptocurrencies. “

The supervisor has been trying for years to protect the individual from these complex instruments. “There is a country in Europe where there are clear restrictions for advertising these products in sports venues. Specifically in France,” said Sebastian Albella, president of the CNMV, a year ago during the presentation of the activity plan. “We don't rule out banning advertising,” he said then.

The CNMV explains that within the restrictions that other countries are demanding, that of “advertising, both direct and indirect, by means of sponsorship or collaboration with football clubs, which by definition represent an advertising channel directed indiscriminately to the general public would be justified. -including the youth- “.

Supervisor sources point out that It is a proposal that will be transferred to the Government so that it can have the rank of law. It has yet to be decided whether this is required, and also “to what extent provisional or permanent, currently existing ratings could be used in the Securities Market Law or MiFIR,” the supervisor indicates in a quarterly Bolentín article published Thursday. And they recognize that it would be “necessary to establish a transitional regime for existing contracts.”

Atlético y Betis, the only clubs in Europe

Spain is the only country in which clubs dress with a jacket that carries advertising from these firms. “In the 2019/2020 season of the Santander League, there are two teams that include advertising for these types of companies on their shirts. In the rest of the main European leagues there is no football club that includes ads of this type of entities on their shirts“, explains the CNMV. Details, in addition, that in the Spanish League there are 7 teams that wear bookmakers sponsorships on-line.

The Betis is sponsored by EasyMarkets and Atlético de Madrid for Plus500, two Cyprus-based firms focused on complex financial products such as contracts for difference (CFDs), which highlight investment in assets such as cryptocurrencies within their platforms.

They are the only two with advertising on their shirts, but others have collaborations that include other types of sponsorships such as the inclusion of outstanding mentions on the teams' websites or the participation of players in advertising and marketing events organized by these companies. The CNMV highlights that the Valencia and Getafe They are linked to Libertex, a company that sponsors them “in public events” as well as offering discounts to fans for operating through it. He too Real Madrid is sponsored by Exness, a similar company, and the Seville by Ever FX, although both teams do not include the logo on their shirts.

In addition to proposing the ban, the CNMV explains that “initiatives aimed at sensitizing clubs and society in general about the problem could be taken”. One of them would be to send a letter to the Professional Football League, in which the current restrictions are remembered.

Some European countries such as France, Holland, Belgium or the United Kingdom have also decided to establish measures to protect the investor, ranging from warnings about the risks associated with contracting or restricting their commercialization to establishing a ban on advertising in general channels or media intended for the general public. .

CNMV limitations

The CNMV crusade comes from behind. In June, it decided to reinforce the “temporary” measures taken by the European Securities and Markets Authority (ESMA) a year earlier to stop these products. The Spanish supervisor agreed to prohibit indefinitely the commercialization, sale and distribution of binary options among retail clients and to restrict these activities in the case of CFDs.

For the latter, it established a series of limitations and requirements, some related to leverage. The CNMV's struggle to protect the individual from the risk of these products has already taken other previous steps. The supervisor demanded in 2017 the signature of the retail client's handwriting in the sale of CFDs, in addition to being alerted with specific warnings. And it was not limited to the Spanish entities that operate in our country. The Spanish agency asked its Cyprus counterpart -Cyprus Securities and Exchange Commission, (CySEC) – that the Cypriot entities that market these products in Spain also adhere to the new rules of the game; He finally got a positive response.

José Maria Gay de Liébana, doctor of Economic Sciences and Law, stood out about these brokers in 2017, when they had already broken into Spanish football, that, the fact that these companies had their offices in Cyprus “absolutely inspires me nothing trust. It has already been uncovered that there was a lot of money in the country that came in B, from different countries, in many cases from the Russian bloc. “

In 2014, the CNMV also conducted a study in which it concluded that the average loss for an investor of CFDs is 3,300 euros and in some cases it exceeds one million euros.

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