Cyprus-regulated brokers serving Spanish retail clients were told on June 10 that perpetual futures, spot-quoted futures and similar leveraged products can fall under Spain’s rules for contracts for difference. Nearly two months later, the important question is no longer what the notice said. It is what firms have done about it.
CySEC Circular C785 did not introduce a deadline, require firms to report their product inventories or order them to confirm that Spanish clients had been removed from affected campaigns. It relayed the position of Spain’s Comisión Nacional del Mercado de Valores and urged Cyprus Investment Firms to take “all appropriate actions and measures.”
That leaves a compliance gap. The classification has been stated, but the circular did not create a visible event that would force every affected broker to change leverage, advertising, onboarding and product governance at the same time.
What Spain Said and CySEC Relayed
CySEC issued the one-page circular to Cyprus Investment Firms at the request of the CNMV. It said the Spanish regulator maintains that spot-quoted futures must be treated as CFDs for regulatory purposes and are therefore subject to Spain’s product-intervention resolutions of 2019 and July 2023.
The final paragraph widened the practical message. CySEC urged firms marketing, distributing or selling CFDs and other leveraged products to Spanish retail investors to comply, expressly naming “SQFs and perpetual futures, or analogue products.”
The circular matters particularly to Cyprus because a CIF licence can be used to provide investment services across the European Economic Area under MiFID II passporting arrangements. A firm does not need a separately incorporated Spanish broker for the CNMV’s national product-intervention measures to apply to its activity in Spain.
The CNMV’s July 2023 resolution states that its CFD restrictions apply to firms providing investment services to Spanish retail investors regardless of the firm’s origin and regardless of whether it operates through a Spanish branch.
Why Naming Perpetual Futures Matters
A perpetual future has no expiry date. It gives the client leveraged exposure to the movement of an underlying asset without requiring ownership of that asset, while funding payments are generally used to keep the contract close to the underlying market price.
Those characteristics make the economic exposure resemble a CFD even when the product is described as a future. The CNMV’s position removes much of the value of using a different product label where the underlying structure and retail risk remain substantially the same.
This is particularly relevant to crypto products. Perpetual futures became one of the dominant instruments on offshore crypto exchanges, where leverage can greatly exceed the limits imposed on retail CFDs in Europe. The term also carries different commercial associations from “CFD,” a label that many European consumers already connect with risk warnings and regulatory restrictions.
CySEC’s October 2023 circular on Spain’s intervention measures referred broadly to CFDs and other leveraged products. The June circular was more direct by naming spot-quoted futures and perpetual futures. Brokers can no longer argue that the Spanish notice was concerned only with products expressly marketed as CFDs.
The classification is based on economic substance rather than the name displayed on the trading platform. A perpetual contract does not escape the CFD framework merely because the broker places it in a “futures” section or uses terminology associated with crypto exchanges.
Spain’s Leverage Caps and Advertising Ban Now Attach
The CNMV’s 2019 resolution retained the retail CFD protections first introduced at European level by ESMA. These include initial-margin requirements that cap maximum leverage according to the underlying asset.
For major currency pairs, the cap is 30:1. The limit falls to 20:1 for non-major currencies, gold and major equity indices, 10:1 for other commodities and non-major indices, 5:1 for individual equities and 2:1 for crypto assets.
The framework also requires margin close-out protection when an account falls below half of the required initial margin, negative-balance protection and a standardized warning showing the percentage of the provider’s retail accounts that lose money. It prohibits monetary and non-monetary incentives connected with the sale of CFDs.
Spain went substantially further in July 2023. The CNMV prohibited advertising communications promoting CFDs to Spanish retail clients and the general public. Its definition covers online advertising, social media, search engines, blogs, specialist websites, video channels, mobile communications and other commercial formats.
The prohibition also reaches communications that direct users to a product page, application download, contact form or another channel intended to connect the prospective client with a provider.
Free or token-priced courses, seminars, demo accounts and similar tools are covered when they encourage the public to invest in the restricted products. Sponsorship and brand advertising are also prohibited where their purpose or effect is to advertise CFDs directly or indirectly, subject to a limited exception where those products form only a very small part of the firm’s wider activity.
For a broker treating a perpetual future as a separate category, the compliance impact therefore extends far beyond changing a product description. The firm may need to review leverage, margin close-out systems, risk warnings, affiliate arrangements, paid search, social campaigns, educational funnels, demo environments and sponsorship exposure directed at Spain.
No Deadline Means No Visible Compliance Wave
CySEC’s circular contains no implementation date because it does not present the CNMV position as a new rule taking effect in June. It tells firms how Spain interprets measures that are already in force.
That makes the notice more uncomfortable, not less. Where an affected product was already being offered to Spanish retail clients outside the CFD restrictions, the issue may concern existing exposure rather than a future compliance project.
At the same time, the circular did not require firms to file a response, identify affected products, disclose the number of Spanish clients involved or explain what remedial action they had taken. CySEC did not announce a thematic review or a standardized questionnaire alongside it.
There was therefore no public deadline around which the market had to move. One broker could immediately block Spanish retail access to perpetuals. Another could revise its leverage and marketing. A third could continue reviewing the legal classification without any externally visible sign of change.
This is the gap between clarification and enforcement. The CNMV’s position is now difficult to miss, but the June notice does not show whether every passporting firm has implemented it or whether firms took different views on which products qualify as CFDs.
The Read-Across Goes Beyond Spain
The immediate legal effect concerns services supplied in Spain under the CNMV’s national framework. It does not automatically turn every perpetual future into a CFD under every rule in every European country.
However, the direction of travel is broader. European regulators are increasingly looking through product names and assessing leveraged retail instruments according to their structure, risk and economic effect.
That creates a product-governance problem for brokers operating one platform across several member states. A contract presented globally as a perpetual future may be subject to CFD leverage and marketing restrictions in one jurisdiction, different national intervention measures in another and a separate distribution prohibition elsewhere.
The operational answer may require country-level controls rather than a single European product setting. Firms need to know where each client is located, which entity serves the account, how the product is classified locally and whether advertisements, affiliates or sponsorships reach restricted audiences.
CySEC’s June circular did not create Europe’s rules for perpetual futures. It made the Spanish position explicit for the Cyprus firms most likely to rely on cross-border passporting to reach that market.
The warning has already been delivered. What remains unknown is how many brokers changed their products after receiving it, and how many are still treating the absence of a deadline as additional time.
Spain’s position also adds to the regulatory pressure facing Cyprus-based investment firms. CySEC has recently increased its focus on governance and cross-border compliance, including the suspension of Mind Money’s CIF licence over alleged authorisation and management failures.