Italy’s financial regulator, CONSOB, adopted two product-intervention measures on 20 June 2019:
- Resolution No. 20975 prohibited the marketing, distribution and sale of binary options to retail clients in Italy or from Italy.
- Resolution No. 20976 imposed permanent restrictions on retail contracts for difference (CFDs), rather than banning them outright.
The measures were published in the Gazzetta Ufficiale on 28 June 2019. The binary-options prohibition took effect on 2 July 2019, while the CFD restrictions took effect on 1 August 2019. They remain in force unless revoked under Article 42(6) of the Markets in Financial Instruments Regulation (MiFIR).
What CONSOB changed
CONSOB acted under Article 42 of MiFIR and Article 7-bis of Italy’s Consolidated Law on Finance. The measures followed temporary intervention rules adopted by the European Securities and Markets Authority (ESMA) in 2018 and 2019.
The practical distinction is important: binary options were prohibited for retail clients, while CFDs remained available subject to leverage caps, margin rules, loss protections, advertising restrictions and mandatory risk disclosures.
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The original CONSOB announcement is available in the regulator’s press release. The two measures are set out in Resolution No. 20975 and Resolution No. 20976.
Binary options: prohibited for retail clients
Resolution No. 20975 prohibits the commercialisation, distribution or sale of binary options to retail clients in Italy or from Italy. The prohibition applies whether or not the product is traded on a trading venue.
CONSOB’s definition focuses on how the product pays out, not what a provider calls it. A binary option is generally covered when it:
- is settled, or may be settled at one party’s discretion, in cash;
- pays only at maturity or when closed; and
- pays either a fixed predetermined amount or zero, depending on whether specified conditions relating to an underlying asset are met.
That structure includes products where a customer makes a fixed prediction about whether an asset, index, currency or other underlying will meet a condition by a specified time. A different label does not automatically place the product outside the rule.
Exceptions to the binary-options prohibition
The measure is not an unconditional ban on every instrument that might technically fit the definition. It does not apply in either of these situations:
- The lower of the two predetermined payouts is at least equal to the retail client’s total payment, including commissions, transaction fees and related charges.
- The option has a minimum period of 90 calendar days between issue and maturity, has a prospectus approved under the applicable prospectus legislation, and exposes the provider to no market risk during the term. The provider or a group entity must not profit or lose from the option, apart from disclosed fees and charges.
Resolution No. 20975 also prohibits knowingly and intentionally helping to evade the measure, including acting as a substitute for the binary-options provider.
CFDs: restricted, not banned
It is inaccurate to say that CONSOB banned CFDs in Italy. Resolution No. 20976 allows retail CFD services subject to a package of mandatory protections:
- initial-margin and leverage limits;
- automatic margin close-out;
- negative-balance protection;
- a ban on monetary and specified non-monetary incentives; and
- standardized risk warnings showing the provider’s retail-client loss rate.
Which products count as CFDs?
For the purposes of Resolution No. 20976, a CFD is a cash-settled derivative, other than an option, future, swap or forward-rate agreement, that gives a customer long or short exposure to changes in the price, level or value of an underlying asset.
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The measure expressly includes:
- rolling spot foreign-exchange products; and
- financial spread bets.
It applies whether the product is traded on a trading venue and also covers securitized or issued CFDs.
The resolution expressly excludes standardized futures, swaps, forward-rate agreements, warrants and turbo certificates. Classification depends on the product’s legal and economic characteristics. A broker cannot necessarily avoid the rules simply by listing a product or giving it a different commercial name.
Leverage limits and required initial margin
CONSOB sets the limits as minimum initial-margin percentages. The approximate maximum leverage is as follows:
| Underlying | Minimum initial margin | Approximate maximum leverage |
|---|---|---|
| Major currency pairs involving USD, EUR, JPY, GBP, CAD or CHF | 3.33% | 30:1 |
| Major equity indices, non-major currency pairs and gold | 5% | 20:1 |
| Other commodity or equity indices | 10% | 10:1 |
| Individual shares and other instruments not otherwise listed | 20% | 5:1 |
| Cryptocurrencies | 50% | 2:1 |
The 30:1 currency category covers pairs made up of any two of USD, EUR, JPY, GBP, CAD and CHF. The 20:1 category includes major indices such as the FTSE 100, CAC 40, DAX 30, DJIA, S&P 500, NASDAQ 100, Nikkei 225, ASX 200 and EURO STOXX 50, as well as non-major currency pairs and gold.
For example, a 2:1 cryptocurrency leverage limit means a customer generally needs initial margin equal to 50% of the position’s notional value. A 30:1 major-currency position requires approximately 3.33% initial margin. Leverage magnifies losses as well as gains, so these percentages are not measures of the maximum amount a customer can safely lose.
How the 50% margin close-out rule works
The account-level close-out threshold is 50% of the total initial margin required for all open CFDs connected to the CFD trading account.
When the account’s funds plus net unrealized profits fall below that threshold, the provider must close one or more open CFDs on terms most favorable to the retail client. A provider may instead use a position-by-position 50% close-out process; CONSOB treats that approach as satisfying the account-level requirement.
Consider a simplified account with €2,000 of total required initial margin. The 50% threshold is €1,000. If the account’s relevant funds plus net unrealized profits fall below €1,000, the provider must begin closing positions under its close-out process.
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This is a trigger, not a guaranteed loss limit. A fast market, overnight gap, thin liquidity or execution delay can cause positions to close at a level worse than the threshold. The rule does not guarantee that an account will never lose more than 50% of its initial margin.
Negative-balance protection is limited to CFD funds
Negative-balance protection limits a retail client’s total CFD liability, including related trading costs, to the funds associated with the CFD trading account.
It is not a guarantee covering every asset held with a broker. If an account contains CFDs alongside shares, bonds or UCITS funds, only money and assets dedicated to CFD trading are treated as capital at risk for this protection. Funds dedicated to other investments are not included in the CFD protection calculation.
Customers should therefore check how their broker separates CFD funds from money assigned to other products. “Negative-balance protection” does not mean that every account at the firm is protected from every possible debit.
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Providers may not offer retail clients monetary benefits connected with CFD trading. The resolution also prohibits “excluded non-monetary benefits,” meaning non-monetary benefits other than CFD-related information and research.
The restriction goes beyond deposit bonuses. It can cover promotions such as:
- cash or trading bonuses;
- holidays, cars, electronics and other gifts;
- free trading courses;
- spread or commission discounts; and
- offers requiring an additional deposit or a minimum number of trades.
The rule does not prohibit all CFD-related information or research. Those are specifically excluded from the definition of prohibited non-monetary benefits.
Mandatory risk warnings
A CFD provider must display a standardized risk warning stating the percentage of its retail CFD accounts that lost money during the previous 12-month period.
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The provider must update the calculation quarterly. It must account for:
- realized profits and losses;
- unrealized profits and losses;
- positions closed during the calculation period;
- open positions valued at the end of the period; and
- all CFD-related costs.
A firm that has operated for less than 12 months, or has not opened any positions during the previous 12 months, must use the standardized percentages in Annex II instead of calculating its own figure.
Shortened versions of the warning are permitted where the communication has limited space, including mobile applications and social-media posts. A shortened warning is not permission to omit the risk disclosure altogether.
Does the rule apply to brokers based outside Italy?
Yes, where the relevant conditions are met. The measures apply to providers established in Italy and to providers established in another EU Member State that provide investment services in Italy, including under the cross-border passport regime.
The relevant wording is marketing, distribution or sale “in Italy or from Italy.” A provider does not automatically escape the restrictions by incorporating in another EU country or serving Italian customers from an overseas office.
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CONSOB’s measures were adopted as Italy’s longer-term national replacement for ESMA’s temporary product-intervention measures. ESMA’s temporary binary-options measure began on 2 July 2018, and its temporary CFD restrictions began on 1 August 2018. Those measures were renewed for additional three-month periods before national authorities adopted longer-term rules.
As of 24 February 2026, ESMA was still referring to national CFD product-intervention measures and warning firms about newly marketed leveraged derivatives described as “perpetual futures” or “perpetual contracts.” Such a product may fall within the applicable CFD rules if its actual characteristics meet the CFD definition.
For consumers, the practical lesson is simple: do not assume that “perpetual,” “future,” “listed” or another label determines the legal treatment. The product’s structure and economic characteristics matter.
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Common misconceptions
| Claim | What the rules actually say |
|---|---|
| “CONSOB banned CFDs.” | CFDs were restricted for retail clients; they were not subject to a blanket prohibition. |
| “The ESMA ban is the current Italian rule.” | ESMA’s measures were temporary. Italy adopted Resolutions Nos. 20975 and 20976. |
| “Every binary option is prohibited with no exceptions.” | Resolution No. 20975 contains exceptions for certain fully protected-payoff and 90-day, prospectus-based products. |
| “Every leveraged product is covered.” | The CFD measure excludes products such as futures, swaps, warrants and turbo certificates, subject to their actual characteristics. |
| “50% close-out means losses cannot exceed 50%.” | It is a close-out trigger, not a guaranteed execution price or maximum loss. |
| “Negative-balance protection covers everything at the broker.” | It is tied to the CFD trading account and the funds associated with CFD trading. |
| “A foreign broker is outside the rules.” | The measures cover relevant services provided into Italy by providers established in other EU Member States. |
FAQ
Did CONSOB ban binary options in Italy?
Yes, Resolution No. 20975 prohibits their marketing, distribution and sale to retail clients in Italy or from Italy, subject to limited exceptions for certain protected-payoff and 90-day prospectus-based products.
Can Italian retail investors still trade CFDs?
CFDs were not banned outright. Retail CFD services may be offered subject to leverage limits, margin close-out, negative-balance protection, incentive restrictions and mandatory risk warnings.
What is the maximum CFD leverage for cryptocurrencies?
The required initial margin is 50%, which corresponds to approximately 2:1 maximum leverage.
Does the 50% close-out rule guarantee that I cannot lose more than half my margin?
No. It identifies when the provider must begin closing positions. Gaps, rapid price movements, liquidity problems and execution prices can produce larger losses before closure.
Does negative-balance protection cover shares held in the same brokerage account?
No. The protection is limited to funds associated with the CFD trading account. Money and assets dedicated to shares or other investments are not included.
Can a broker avoid the Italian CFD restrictions by calling its product a perpetual future?
Not necessarily. Classification depends on the product’s legal and economic characteristics. ESMA has specifically warned that products marketed as perpetual futures or perpetual contracts may meet the CFD definition.
The Bottom Line
CONSOB’s 2019 measures created two different outcomes: a prohibition on retail binary options, and permanent safeguards for retail CFDs. The CFD rules cap leverage, require a 50% margin-close-out process, limit CFD losses to the funds associated with the CFD account, prohibit most trading incentives and require quarterly loss-rate warnings.
For anyone assessing a leveraged product offered to Italian retail clients, the name on the marketing page is not enough. Check the payoff structure, underlying asset, margin requirement, account protections and provider’s regulatory status. CFDs remain high-risk products even when the mandatory protections apply.
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