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Business concept
How an app can become an activity that requires permission.
INTERACTIVE EXAMPLE / 03
Appropriateness assessment · share CFD
This example assesses knowledge and experience for a non-advised share CFD with a provider complying with German retail-client rules. A CFD tracks a price difference; the underlying share is not purchased. Leverage, margin, close-out and costs therefore receive their own questions.
Scenario: a long CFD on one share with €1,000 exposure, 5:1 leverage and €200 initial margin. A retail CFD account subject to the relevant German protections is assumed. Calculations exclude spread, fees and financing costs.
Related: suitability for automated CFD copy trading →
Legal basis & methodology
MiFID II · Art. 25(3)–(4) · ESMA35-43-3006
For covered retail CFDs, negative balance protection limits liability to the funds in the CFD account, not necessarily the initial margin of an individual position. Margin close-out does not guarantee an execution price or protect the account balance from loss.
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Fit & Proper · skills matrix
Prepare management profiles and collective suitability reviews.
International market entry / Germany
Is Germany your next market?
Considering a local office, a branch or a standalone authorisation in Germany? The appropriate route depends on your home jurisdiction, activities and operating model. 3RMCN combines experience from complex supervisory projects with product, technology and delivery expertise: from entry strategy and key interfaces through to operational readiness.
Discuss your plans ↗Supervisory perspectives
Familiar with several regimes
Experience in the context of CySEC (Cyprus), MFSA (Malta), FCA (United Kingdom), the European ESMA framework and MAS (Singapore). ESMA is not a national licensing authority.
International structuring
Incorporating offshore?
For incorporation in offshore jurisdictions, relevant specialists from the network can be involved. Jurisdiction, activities and regulatory obligations need to be considered for each project.