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Recital 19

Recital 19

19. ESMA will continue to keep these products under review and will act as necessary. In particular, ESMA has considered the risk that the exclusion may be used by a binary option provider to offer products with comparable features to those that raise significant investor protection concerns, for example, by issuing products that incentivise short duration trading behavior by setting the barrier close to the underlying market price at issuance. ESMA and NCAs will monitor whether any new distribution trends develop and will pay particular attention to products that, despite their long terms, are designed to incentivise such short duration trading behavior.

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