de | cn | ru

Market News

ESMA caps leverage at 1:30 from August

 

The European Securities and Markets Authority (ESMA) has announced today that the new restrictions on the provision of contracts for differences (CFDs) to retail investors will take effect as of August, 1. The measures include a leverage cap of 1:30, as well as provision of negative balance protection on a per account basis, among others.

 

Additionally, ESMA also introduces a ban on binary options trading as of July 2, 2018. The new regulations have already been published in the Official Journal of the European Union (OJ) and will remain in force for three months from the date of application.

 

More specifically, the restrictions on the provision of CFDs to retail clients include:

1. A leverage cap, depending on the underlying asset:

· 30:1 for major currency pairs;

· 20:1 for non-major currency pairs, gold and major indices;

· 10:1 for commodities other than gold and non-major equity indices;

· 5:1 for individual equities and other reference values;

· 2:1 for cryptocurrencies;

 

2. A margin close out rule on a per account basis. According to it, CFD providers are required to close out one or more retail client’s open CFDs at 50% of the minimum required margin;

 

3. Negative balance protection on a per account basis. This means that investors cannot lose more than they have deposited;

 

4. A restriction on the incentives offered to trade CFDs;

 

5. A standardized risk warning, including the percentage of losses on a CFD provider’s retail investor accounts.

 

The measures ESMA has taken today are a significant step towards greater investor protection in the EU. 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,” commented ESMA’s Chairperson, Steven Maijoor.

 

The pan-European financial regulator has been planning to introduce a set a restrictions on retail trading in CFDs, as well as a ban on binary options for quite some time. Its plans have been officially announced earlier in March. Although ESMA can only introduce temporary three-month measures (as per the MiFIR,), the regulator will review the results and may impose a further extension for another three months.

TAGS: ESMA  regulation  CFDs  forex brokers  leverage cap 
Broker Country Regulation Platform Min Deposit Review
Cyprus, UK, Mauritius CySec, FCA, IFSC MT4, MT5, Web $10 Review Website
Cyprus, Australia CySec, ASIC MT4, Web,
Mobile app
$100 Review Website
Australia, Cyprus ASIC, CySEC MT4, MT5,
IRESSTrader
$100 Review Website
UK, Cyprus, Australia FCA, CySec, ASIC MT4, MT5 $5 Review Website
UK, Australia FCA, ASIC MT4, Trading
Station,
NinjaTrader
$50 Review Website
UK, Cyprus, UAE, South Africa FCA, CySEC, DFSA, FSB MT4, MT5, FxPro
Markets,
cTrader
$100 Review Website
Cyprus CySEC MT4, MT5, Web $1 Review Website
Belize IFSC MT4, MT5 $100 Review Website
Cyprus, UK, South Africa, UAE CySec, FCA, FSCA, DFSA MT4, MT5, Web $5 Review Website
Cyprus, UK CySEC, FCA MT4, MT5 $1 Review Website
Australia ASIC MT4, MT5 $100 Review Website
UK FCA MT4, Web, MT4
for Mac
$100 Review Website

More Forex Market News

BaFin orders Olympus Markets to cease operations in Germany

Apr 24 2019 10:47:32

  The German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin) has ordered unregulated forex broker Olympus Markets to cease offering illegal cross-border trading services to German investors on Tuesday. Read more

CONSOB warns Swissinv24, 4xpremium, AGM Group, IWC Invest and GMT Crypto are clone firms

Apr 23 2019 13:00:37

 The Italian financial regulator CONSOB warned investors that Swissinv24, AGM Group, IWC Invest, 4xpremium and GMT Crypto are companies, and has ordered all o of them to cease their illegal operations in the country. Read more

Accent Forex ends up on FCA’s warning list

Apr 22 2019 11:48:24

  The British financial regulator warned the public against forex broker Accent Forex previous week. The Financial Conduct Authority (FCA) has recognized this broker as an unauthorized financial services provider illegally targeting local investors. Read more

AFM also plans to make ESMA’s product intervention measures permanent

Apr 18 2019 13:13:32

  The Dutch financial regulator AFM announced its plans to make the product intervention measures of the European Securities and Markets Authority (ESMA) permanent. Read more

BaFin joins FCA and other regulators in warning against Wise Banc

Apr 17 2019 17:15:37

  Germany’s federal financial supervisory authority (BaFin) warned against Wise Banc and ordered it to cease offering cross-border proprietary trading services to German investors.   A brief review of the broker’s website (www.wisebanc. Read more

FCA updates its warning list with CryptoExp, CapitalXP, and 4XFX

Apr 16 2019 14:44:31

  The Financial Conduct Authority (FCA) has recently updated its warning list with unregulated brokers CryptoExp, CapitalXP, and 4XFX. According to the regulator, these brokers have been providing financial services or products in the UK without its authorization. Read more

CySEC warns CryptoCapitalFX is a clone

Apr 12 2019 14:36:41

  The Cyprus Securities and Exchange Commission (‘CySEC’) officially warned investors that CryptoCapitalFX (operating via www. cryptocapitalfx.com) is not licensed to provide investment services in the country. Read more

ASIC warns that some Australian brokers are soliciting European clients

Apr 11 2019 14:31:20

  The Australian Securities and Investments Commission (ASIC) made an official statement, warning local forex brokerages to be careful not to break any overseas laws while offering OTC derivatives to retail investors in Europe and other overseas jurisdictions. Read more

Spain’s CNMV updates its warning list with a bunch of shady brokers

Apr 10 2019 17:36:00

  The Comision Nacional del Mercado de Valores (CNMV) has updated its warning list with BrokerYard, Capital245, CryptoEU, Pepperdyne, and UproFX, among others, earlier this week. Read more

UK’s FCA blacklisted unregulated broker Hope Area

Apr 09 2019 09:50:06

  UK’s financial markets and services regulator, the Financial Conduct Authority (FCA), blacklisted unregulated forex and binary options broker Hope Area on Monday.   “This firm is not authorised by us and is targeting people in the UK. Read more

de | cn | ru