EU securities regulators have stepped in to ban risky binary options for retail investors. 

In a decision announced on Tuesday, the European Securities and Markets Authority said that the marketing, distribution or sale of binary options to retail investors would soon be prohibited. 

The EMSA also introduced restrictions on the sale of contracts for differences, or CFDs.  

Binary options are high-risk financial instruments which grant investors fixed payouts if the underlying asset meets certain conditions within a particular time-frame. 

CFDs are a form of derivative trading through which investors can speculate on the rise or fall of the price, level or value of underlying assets, without owning that asset. They are often offered with leverage, effectively multiplying both profits and losses. 

Most retail investors lose money through such products, with the EMSA noting that there was no clear alternative investment purpose for them. 

The EMSA rulings on binary options and CFDs are applicable for a three month period, which can be renewed, and will come into force some weeks after the measures are published in the Official Journal of the European Union.   

The ban and restrictions come following a public request for information made by the EMSA. The authority received some 18,500 responses - a record number. 

Read the EMSA statement in full.