ESMA puts perpetual futures on notice: if it works like a CFD, it is regulated like one

On 24 February 2026 the European Securities and Markets Authority published a short statement with large consequences for crypto venues and brokers selling leveraged products in the EU. Its subject was derivatives “often marketed as perpetual futures or perpetual contracts, that provide leveraged exposure to underlying values, including crypto-assets such as Bitcoin or Ethereum.”

ESMA’s conclusion: such products “are likely to fall within the scope” of the national CFD product intervention measures that have applied across the EU since 2019.

The name does not matter

The statement is blunt on this point. The commercial name a firm gives a product “is irrelevant for the categorisation under MiFID II,” and firms “must conduct a careful legal analysis” of how each product actually works. The analysis applies “for all derivatives offered irrespective of their commercial name,” not only to products called perpetuals.

The test comes from the definition in ESMA’s original 2018 decision. A CFD is “a derivative other than an option, future, swap or forward rate agreement, the purpose of which is to give the holder a long or short exposure to fluctuations in the price, level or value of an underlying,” settled in cash or capable of being settled in cash.

ESMA’s working rule follows from that: a derivative giving exposure to an underlying “which is not exclusively settled physically, would likely fall in scope,” unless it is one of the excluded product types.

What does not get a product out of scope

ESMA lists features that are not relevant to the assessment:

• whether the product is traded on a trading venue;
• a funding rate mechanism, the defining feature of most perpetual contracts;
• safeguards a firm adopts voluntarily, such as negative balance protection or “so-called ‘insurance funds’.”

That last point closes an argument some venues have made: that offering their own loss protections should exempt them from the rules that mandate those protections.

What applies to a product in scope

A derivative that meets the CFD definition is subject to the full set of national measures when offered to retail clients:

• leverage limits, which for crypto-assets are capped at 2:1;
• a mandatory, standardised risk warning that includes the percentage of the provider’s retail accounts that lose money;
• a margin close-out at 50% of the required margin, on a per-account basis;
• negative balance protection, so a retail client cannot lose more than the funds in their account;
• the prohibition of monetary and non-monetary benefits used to encourage trading.

Our explainer on the EU CFD rules sets out each of these in detail.

The rules beyond the CFD measures

The statement goes further than classification. ESMA reminds firms that several MiFID II requirements apply to derivatives “irrespective of their commercial name and regardless of whether they fall within the scope of the product intervention measures”:

Product governance. Given the risk, ESMA expects a “very careful assessment of the target market,” which “is expected to result in a narrow target market.” It names practices it does not consider compliant: “mass marketing campaigns, initiatives aimed at inexperienced investors, or emails and pop-ups to all clients of a firm that state that such products are now offered and investors should ‘get started now’.”

Appropriateness. Derivatives are complex instruments, so an appropriateness assessment is required for non-advised services.

Conflicts of interest. ESMA flags “a prominent conflict of interest” where the derivatives “are issued by a group entity or traded on a venue belonging to the group,” which may push a group firm to sell them to its own clients.

PRIIPs. ESMA states that so-called perpetual futures “are packaged investment products,” so a Key Information Document is required when they are distributed to retail clients.

What it means for firms

For a crypto venue or broker serving EU retail clients, the statement turns a legal grey area into a checklist:

1. Classify every leveraged product on its mechanics, with a documented legal analysis, rather than on its name.
2. Reconfigure leverage on in-scope crypto products to 2:1 for retail clients, and apply the 50% close-out and negative balance protection at account level.
3. Publish the risk warning, including the firm-specific percentage of losing retail accounts.
4. Review marketing and onboarding against the narrow target market ESMA expects, and remove blanket product launches to the whole client base.
5. Produce a PRIIPs KID for each product sold to retail clients.
6. Map group conflicts where the issuer or the venue sits inside the same group as the distributor.

ESMA also notes that “participating in circumvention activities to the product intervention measures is prohibited.” Firms relying on relabelling to stay outside the CFD rules should treat this statement as notice.

Sources

• ESMA, Public statement on identifying derivatives within the scope of the national product intervention measures on CFDs, ESMA35-243228190-8024, 24 February 2026
• ESMA, Press release: ESMA agrees to prohibit binary options and restrict CFDs to protect retail investors, ESMA71-98-128, 27 March 2018