1 (edited by geektrader 2018-03-31 02:25:37)

Topic: ESMA limits EU wide Forex leverage to 1:30


I am not sure why no one is talking about the already finalized regulation of the ESMA in terms of their EU wide intervention on CFD / Forex / Binary Options. What´s being implemented in the next weeks (amongst other things) for ALL EU based brokers, is this:

- Leverage cut to 1:30 for all major currency pairs
- Leverage cut to 1:20 for all non-major currency pairs
- The complete ban of binary options

Here is one of the thousands of articles out there about this:

https://www.financemagnates.com/forex/b … ls-binary/

Basically, this is the end for most small Forex traders in the EU. The only hope would be that Australian brokers will still onboard EU clients (no leverage limits there). But we have seen it that after the US regulations of 1:50 a few years back, other brokers have stopped taking US clients and I guess the same could happen for EU clients too. Then there would be the offshore / Russian options but with all shortcomings offshore has (possibly non-segregated client money, cheating brokers, and execution, etc.).

Hard times are coming for us small Forex traders... I hope this thread will help us to find alternatives, that is why I´ve started it. I have already been in contact with a few brokers about how this will affect things, but have only heard back from Pepperstone (originally Australia based, but with a FCA regulated branch in London since a few months where all of their EU based customers had to move too) that they will have to enforce the leverage cut on their EU clients and that there is no way for their EU customers to migrate their accounts back to the Australian branch. I am waiting to hear back from other Australian brokers if EU clients can stay with them on 1:500 leverage or if they will also start kicking out those like they did with the US clients when they got their 1:50 leverage regulations a few years back (and not accepting new applications from the EU either).

Oh my...

Re: ESMA limits EU wide Forex leverage to 1:30

The main thing that has happened is that traders are flocking out of EU-based brokers into brokers located elsewhere where 1:100-500 is still the norm. A lot of the EU-based brokers have also quickly set up entities in places where ESMA is not enforced. Some also have the "professional client" option where they ask you 3 questions and then still grant you 1:500. So business continues as usual.