Consultation: AFM prepares for ban on advertising of harmful financial products

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The Authority for the Financial Markets (AFM) is preparing a ban on the advertising of harmful financial products. The supervisor is starting a consultation with the market on this issue today. The AFM sees the ban as an important step in its fight against harmful financial products to which consumers are exposed.

The reason for the measure is that various European supervisors have established that certain harmful financial products are being aggressively marketed to consumers on a large scale. This frequently leads to a harmful situation. With these products, consumers can lose their investment very quickly, while over the long term there is little prospect of making a profit. On the recommendation of the AFM, the Minister of Finance announced a ban on the advertising of certain financial products in September 2016.

“The current low interest-rate environment and digitalisation are creating a fertile base for the arrival of harmful financial products offered online. We are also dealing with parties who offer these products from other countries,” says Merel van Vroonhoven, chair of the AFM. “For the AFM, it is a priority to protect consumers against products that lead to large losses or involve high costs. The advertising ban will be an important weapon in the fight against harmful products.”

The AFM has studied which harmful financial products will be subject to the ban. During the study, the AFM has consulted with market parties and other European supervisors.

High-risk investment products

The AFM intends to make the following investment products subject to the ban:

  • Binary options
  • Warrants
  • Contingent convertible bonds, or ‘Cocos’
  • Contracts for difference (CFDs) with the possibility of residual debt
  • CFDs with leverage of 10 or more
  • Turbos with leverage of 10 or more 
  • Futures with leverage of 10 or more

Ban on advertising of pay-day loans

In addition, the AFM wishes to make short-term loans with a very high rate of interest (known as pay-day loans) and also longer-term loans carrying excessive rates of interest subject to the ban. This will enable the AFM to take action against parties offering pay-day loans, including those offering such products from other countries. The AFM has been warning about the risks of pay-day loans for some time. Vulnerable consumers in financial difficulties are being tempted by mostly foreign providers to borrow money quickly without being aware that excessive costs are charged for this.


In its agenda 2016 – 2018, the AFM cites a number of trends and risks. As a result of the low interest-rate environment, people are looking for higher returns, while internationalisation means that financial markets are no longer limited to national borders and technological developments have led to the arrival of new players. In combination, these trends are making it easy for parties to offer these types of high-risk financial products online and across borders. Many of these parties are located abroad and operate on the basis of a European passport. The importance of cooperation between European supervisors has thus increased.
In addition to the advertising ban, the introduction of MiFID II in January 2018 will mean stricter requirements apply to high-risk investment products aimed at consumers. This will make it possible for the sale of certain financial instruments to be suspended.

Consultation procedure

The AFM’s consultation procedure will run until 3 April 2017. Market parties are requested to respond by e-mail to They can state the change that they are responding to and whether they are happy for their response to be published. We also hope to receive specific responses regarding the inclusion of futures and warrants in the advertising ban.

Finally, the Minister of Finance will consult until 20 March on Section 56a of the Market Conduct Supervision (Financial Institutions) Decree (Besluit Gedragstoezicht financiële ondernemingen Wft, or ‘BGfo Wft’). This article gives the AFM the power to designate financial products that meet certain criteria as subject to the advertising ban.

For more information, please contact, spokesperson at the AFM (+31 6 4664 4024).

The AFM is committed to promoting fair and transparent financial markets.

As an independent market conduct authority, we contribute to a sustainable financial system and prosperity in the Netherlands.

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