ESMA clarifies perpetual futures rules

The European Securities and Markets Authority has reiterated how cfds regulation applies to newly marketed derivatives, including perpetual futures linked to crypto-assets, amid a surge in such offerings.

ESMA statement on new derivative products

On 24/02/2026, the European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, issued a statement directed at firms offering new derivative products. The authority reminded market participants that they must assess whether any newly offered instruments fall within the scope of existing product intervention measures on contracts for differences (CFDs).

Moreover, ESMA stressed that this assessment is not optional. Firms must proactively check every new derivative against the existing national product intervention frameworks. This includes products with innovative branding and complex payoff structures, which may in practice operate like traditional CFDs and therefore attract the same regulatory treatment.

Perpetual futures and crypto-asset exposure

The statement specifically responds to an increased offering of derivatives marketed as perpetual futures or perpetual contracts. These instruments provide leveraged exposure to underlying values, including crypto-assets such as Bitcoin. However, even when presented as novel or distinct, these products are very likely to fall within the scope of national product intervention measures on CFDs adopted by national competent authorities.

That said, the label used by firms does not determine the regulatory perimeter. If the economic features of a product mirror a CFD, national rules on product intervention measures apply. This includes crypto-linked perpetual contracts that enable ongoing, leveraged exposure without a fixed expiry date.

When derivatives qualify as CFDs

Where these derivatives meet the definition of a CFD, they are automatically subject to the full set of applicable product intervention requirements. This includes leverage limits, the obligation to display a mandatory risk warning, a margin close-out mechanism, and negative balance protection for clients. In addition, there is a prohibition on granting monetary and non-monetary benefits designed to incentivise trading in these products.

Moreover, ESMA underlined that these protections are intended primarily to safeguard retail investors from excessive risk. Firms therefore cannot circumvent leverage caps or client protections simply by rebranding CFDs as perpetual futures or by referencing new underlying assets such as crypto-assets.

Target market and distribution obligations

The statement also reminds firms about their wider conduct obligations. ESMA highlights that, given their inherent complexity, derivatives must be assigned a narrow target market. This target market should be supported by a distribution strategy that is fully aligned with the product’s risk profile and sophistication level.

However, an aligned distribution strategy goes beyond marketing language. Firms must ensure that sales practices, promotional materials, and online interfaces do not broaden the effective distribution of complex derivatives to clients for whom these products are not appropriate or consistent with their needs and objectives.

Appropriateness and conflicts of interest

When firms provide non-advised services involving these complex derivatives, an appropriateness assessment must be carried out. This assessment must follow the relevant regulatory requirements for complex financial instruments and verify whether the client has the necessary knowledge and experience to understand the risks.

Furthermore, ESMA expects firms to take appropriate steps to identify, prevent, or manage any conflicts of interest that may arise from offering such products. This includes conflicts linked to remuneration structures, trading incentives, or proprietary positions that could misalign the firm’s interests with those of its clients.

Implications for firms and supervisors

For firms active in the rapidly evolving market for leveraged derivatives, including those referencing crypto-assets, the message from ESMA is clear. Products that function like CFDs will be treated as CFDs under existing national product intervention measures, irrespective of how they are labelled or marketed.

In summary, ESMA’s intervention reinforces national authorities’ existing CFD regimes and reminds providers that leverage limits, risk warnings, margin close-out rules, negative balance protection, and strict conduct standards all continue to apply to qualifying derivative offerings.