Breaking: ESMA finalizes new rules to govern leveraged trading | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

Australia "ESMA" type rules 8 replies

Differences in Trading Behavior under new ESMA leverage rules 2 replies

Concerning New ESMA Regulation On Leveraged Trading 1 reply

MFSA finalizes new rules for Forex and CFD brokers 0 replies

Breaking News: Belgium bans all leveraged Forex, CFDs 92 replies

Attachments: Breaking: ESMA finalizes new rules to govern leveraged trading
Exit Attachments

Breaking: ESMA finalizes new rules to govern leveraged trading

  • #1
  • First Post: Mar 27, 2018 8:25am Mar 27, 2018 8:25am

  1. Forex and CFD leverage will be limited to 30x, and that just for major currency pairs. Lower leverage (see more below) will be enforced on non-major currency pairs, gold, indices, other commodities, individual equities and cryptocurrencies.

  1. Binary Options are banned.
  2. Margin close out rule on a per account basis.
  3. Negative balance protection on a per account basis.



https://www.leaprate.com/forex/regul...y-options-ban/

  • #2
  • Mar 27, 2018 8:29am Mar 27, 2018 8:29am
so far im only finding info on CFD 30:1 leverage and not spot forex.
  • #3
  • Mar 27, 2018 12:43pm Mar 27, 2018 12:43pm
Quoting PoundTrader
so far im only finding info on CFD 30:1 leverage and not spot forex.
Of course spot forex is included...

"
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;

"

u better have a look at the official release: https://www.esma.europa.eu/press-new...tail-investors
  • #4
  • Mar 27, 2018 12:57pm Mar 27, 2018 12:57pm
Quoting Drolph
{quote} Of course spot forex is included... " 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; " u better have a look at the official release: https://www.esma.europa.eu/press-new...tail-investors
no this is not spot forex it's CFD currency
  • #5
  • Mar 27, 2018 12:58pm Mar 27, 2018 12:58pm
Binary options are a scam - good.
  • #6
  • Mar 27, 2018 1:00pm Mar 27, 2018 1:00pm
either way the people who control the central banks hate retail spot forex traders, they want to ban spot forex
  • #7
  • Mar 27, 2018 1:05pm Mar 27, 2018 1:05pm
They want to ban btc,forex,cash! .İnfact they want to ban normal citizens from the every source of earth.

infact if they could do,they wont give a drop of water to people..even while it rains..

And if that rules apply,it would make some catasthropic moves in euro i think.Surely sell EURO.

Now i can understand why uk wanted to leave...
  • #8
  • Mar 27, 2018 1:20pm Mar 27, 2018 1:20pm
Quoting PoundTrader
{quote}no this is not spot forex it's CFD currency
No, there is no "CFD currency". This is a theoretical myth. CFD is related to shares, commodities and indices. Currencies are related to (spot) Forex.

Had a look at about a dozen brokers I am using - no exception. Prove me wrong.
  • #9
  • Edited 3:28am Mar 28, 2018 3:12am | Edited 3:28am
Quoting PoundTrader
{quote}no this is not spot forex it's CFD currency
Poundtrader is right. New restrictions will only be applied to CFD products.

https://www.leaprate.com/forex/regul...-earnings/?amp

The restrictions to be applied to CFDs are:

  1. Leverage limits on the opening of a position by a retail client from 30:1 to 2:1, which vary according to the volatility of the underlying asset:
    – 30:1 for major currency pairs;
    – 20:1 for non-major currency pairs, gold and major equity 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;
  3. Negative balance protection on a per account basis;
  4. A restriction on the incentives offered to trade CFDs;
  5. A standardised risk warning.

GAIN Capital on ESMA CFD leverage restrictions: less than 5% of Revenue at risk
https://www.leaprate.com/forex/broke...e-at-risk/?amp

ESMA confirms 30x max CFD leverage and Binary Options ban
https://www.leaprate.com/forex/regul...tions-ban/?amp

  • #10
  • Mar 28, 2018 3:39am Mar 28, 2018 3:39am
You missed the point. All I said is a "CFD currency" is not existing.

Every tradingsoftware I considered so far shows currencies under (spot) forex and not under CFD. It would be hilarious if this alone would break the whole decision.
  • #11
  • Edited 4:00am Mar 28, 2018 3:50am | Edited 4:00am
Quoting Drolph
You missed the point. All I said is a "CFD currency" is not existing. Every tradingsoftware I considered so far shows currencies under (spot) forex and not under CFD. It would be hilarious if this alone would break the whole decision.
There're indeed CFD currencies on earth and you can trade them on IG and many other fca regulated brokers.

I used to trade them once.

ESMA's decision is clear. New leverage restrictions will be applied to CFD products.

I asked LMAX and they said current leverage for Fx won't be changed.

Just ask your broker. You'll get the same answer.
  • #12
  • Mar 28, 2018 3:52am Mar 28, 2018 3:52am
Quoting grandaevus
{quote} There're indeed CFD currencies. You can trade them on IG. ESMA's decision is clear. New leverage restrictions will be applied to CFD products. I asked LMAX and they said current leverage for fx won't be changed. Just ask your broker. You'll get the same answer.
Awesome! This piece of information has to be spread everywhere!
  • #13
  • Mar 28, 2018 4:11am Mar 28, 2018 4:11am
I tend to agree with Drolph.

CFD is a term used for all tradings where you don't own the underlying assets. ESMA or FCA will not specifically mentioned Forex or Oil or DAX30 etc which you can trade in MT4.
  • #14
  • Mar 28, 2018 4:49am Mar 28, 2018 4:49am
Nonsense, it will be applied to spot FX. You’re misguided.

Quoting grandaevus
{quote} Poundtrader is right. New restrictions will only be applied to CFD products. https://www.leaprate.com/forex/regul...-earnings/?amp The restrictions to be applied to CFDs are: Leverage limits on the opening of a position by a retail client from 30:1 to 2:1, which vary according to the volatility of the underlying asset: – 30:1 for major currency pairs; – 20:1 for non-major currency pairs, gold and major equity indices; – 10:1 for commodities other than...
"The meek shall inherit the earth.." Yeah right, good luck with that shit..
  • #15
  • Mar 28, 2018 4:51am Mar 28, 2018 4:51am
It’s ambiguous but all forms of retail spreadbetting and FX trading should (for the purpose of the announcement) be regarded as CFDs.

Quoting reddevil
I tend to agree with Drolph. CFD is a term used for all tradings where you don't own the underlying assets. ESMA or FCA will not specifically mentioned Forex or Oil or DAX30 etc which you can trade in MT4.
"The meek shall inherit the earth.." Yeah right, good luck with that shit..
  • #16
  • Mar 28, 2018 6:03am Mar 28, 2018 6:03am
Quoting Spreadbetter
Nonsense, it will be applied to spot FX. You’re misguided. {quote}
I trade with 7 (yes seven) different FX brokers for the moment - not a single bulletin email from them. Some of the accounts are 5-digit amount. If this was a major business breakdown regulation - I’m sure emails would be swarmed with warnings and forward guidance. As what happened during the Swiss franc event in 2015.

I think you just use every occasion to express some opinion against retail trading.
  • #17
  • Mar 28, 2018 6:49am Mar 28, 2018 6:49am
Quoting PoundTrader
either way the people who control the central banks hate retail spot forex traders, they want to ban spot forex
Why do they have an issue with retail spot forex?
Come with me if you want to live....
  • #18
  • Edited 2:19pm Mar 28, 2018 6:54am | Edited 2:19pm
So 30/1 leverage.

That's 3 lots limit for every $10,000 account balance?
3 minilots for every $1000?

That seems like plenty to me.
Come with me if you want to live....
  • #19
  • Mar 28, 2018 7:05am Mar 28, 2018 7:05am
Brokers do not report to ESMA, they only report to each country's regulator.
Esma info will be digested by each country's regulator, who will then send this info the brokers in their jurisdiction.
The brokers after some protests, will then send info the traders/customers, once they find out that their protests are fruitless.


You have to ask yourself the purpose of ESMA restriction on leverage. This is to "protect" traders, which means there is no reason why they will leave out an instrument (forex) but target others.

I hope I am wrong, but that is how regulators work.
  • #20
  • Mar 28, 2018 7:05am Mar 28, 2018 7:05am
Quoting Ill-b-back
So 30/1 leverage. That's 3 lots limit for every $10,000 account balance? 3 minilots for every $1000? That's seems like plenty to me.

I totally agree. I use 50/1 but a move to 30/1 would not impact me at all.
Model 3 All Time Pips: -887
1 trader viewing now