EU ban on "binary" options retail sales to start July 2

LONDON, June 1 (Reuters) - A European Union ban on "binary" options sales to retail customers will come into force on July 2, with restrictions on sales of contract for differences (CFDs) starting a month later, the bloc's securities watchdog said on Friday.

The European Securities and Markets Authority (ESMA) had already announced the measures aimed at better protecting consumers, and signalled that more could be done.

Binary options and CFDs are financial products that give an investor exposure to price movements in securities without actually owning the underlying assets such as a currency, commodity or stock.

"The new measures on CFDs will, for the first time, ensure that investors cannot lose more money than they put in, restrict the use of leverage and incentives, and provide understandable risk warnings for investors," ESMA Chair Steven Maijoor said in a statement.

National securities regulators in the EU will monitor the impact of the measures to assess what next steps are required, Maijoor said.

It is the first time that ESMA has introduced measures since obtaining new powers in January to ban risky products.

(Reporting by Huw Jones; Editing by Susan Fenton)