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Breaking: ESMA finalizes new rules to govern leveraged trading

  • #21
  • Mar 28, 2018 7:21am Mar 28, 2018 7:21am
The hypocrite regulators don't care about the protection of traders.
If so, they already had done it by shutting down more than of the global 95% scam brokers.
  • #22
  • Mar 28, 2018 7:25am Mar 28, 2018 7:25am
Cool story bro..

Quoting michaelpelly
{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.
"The meek shall inherit the earth.." Yeah right, good luck with that shit..
  • #23
  • Edited 8:07am Mar 28, 2018 7:31am | Edited 8:07am
Don't be a believer, be a knower.

When you heard something, don't accept it as a truth without questioning it.

Here's ESMA's official published statement.

https://www.esma.europa.eu/sites/def...tervention.pdf

Look at the heading :
"ESMA agrees to prohibit binary options and restrict CFDs to protect retail investors"

Then read the statement.

1:30 max leverage restriction is written under CFDs – agreed measures

Therefore,
New leverage restrictions will only be applied to CFDs not spot FX.
  • #24
  • Mar 28, 2018 7:31am Mar 28, 2018 7:31am
You've adapted to USA rules, you’re ahead of the curve, you’ve developed a professional attitude and outlook. That’s all any retail punter in Europe has to do.

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.
"The meek shall inherit the earth.." Yeah right, good luck with that shit..
  • #25
  • Mar 28, 2018 7:37am Mar 28, 2018 7:37am
Having warned of the measures in December, the European Securities and Markets Authority on Monday said it will prohibit the marketing, distribution or sale of binary options to retail clients and restrict the provision of contracts for difference (CFDs) in order to protect retail investors from what are seen as highly complex financial products.

The measures are temporary but are likely to be renewed and there will be a consultation over making them permanent, the UK's Financial Conduct Authority said, having found that 76% of retail customers who bought CFD products lost money.

Restrictions on CFDs will also include rolling spot forex and financial spread bets, with CFD leverage on the opening of a position to be limited to between 30:1 and 2:1, depending on the price volatility of the underlying asset. In December, ESMA had suggested limits between 30:1 and 5:1.

The leverage caps will be 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 and 2:1 for cryptocurrencies.

CFDs will also have a 50% margin close-out rule applied on a per account basis, which will standardise the percentage of margin at 50% of at which providers are required to close out one or more retail client's open CFD positions.

A negative balance protection will aim to limit a retail clients' liability to the funds in their CFD trading account.

Firms will also be prohibited from offering monetary and non-monetary benefits -- excluding research and information tools -- to retail investors; and all firm will need to give a standardised risk warning, including firm-specific figures on the percentage of client accounts that have lost money trading CFDs.

The regulator will publish an official notice on its website in coming weeks, giving firms one month to implement the prohibition on binary options and two months for the restrictions on CFDs.

Product intervention measures will have an initial duration of up to three months, ESMA said, after which the measures may be renewed, with the FCA saying

The UK's Financial Conduct Authority said it expects to consult on whether to apply these measures on a permanent basis to firms offering CFDs and binary options to retail clients.

In January, the UK regulator warned that many City brokers providing CFDs to retail investors were causing "serious concern" and said it saw a "high risk" that many firms were not meeting its rules and expectations in providing and distributing CFDs, indicating a "serious risk of harm" for consumers.

Over a 12-month review, the FCA found 76% of retail customers who bought CFD products on either an advisory or discretionary basis lost money.

IG said on Tuesday that it was "disappointed that ESMA has chosen to proceed with its proposal to impose disproportionate leverage restrictions which will unduly restrict consumer choice, and risk pushing retail clients to providers based outside of the EU or to use other products which allow the leverage clients seek. This may result in poor client outcomes."

The FTSE 250 company said it expects revenue in its 2019 financial year will be lower than that expected this year, primarily reflecting the impact of the regulatory changes in the UK and EU. "Demand for the products and services offered by IG is strong, and growing and the company expects to return to growth after FY19."



http://www.lse.co.uk/sharecast-news-...nd_spread_bets
"The meek shall inherit the earth.." Yeah right, good luck with that shit..
  • #26
  • Mar 28, 2018 7:42am Mar 28, 2018 7:42am
Quoting grandaevus
{quote} Don't be a believer, be a knower. When you heard something, don't accept it as a truth without questioning it. Here's ESMA's official published statement. https://www.esma.europa.eu/sites/def...tervention.pdf Look at the heading : "ESMA agrees to prohibit binary options and restrict CFDs to protect retail investors" Then read the statement. 1:30 max leverage restriction is written under CFDs – agreed measures Therefore, New leverage restrictions will only be applied to CFDs...
Appreciate you setting me straight
Model 3 All Time Pips: -887
  • #27
  • Edited 8:04am Mar 28, 2018 7:44am | Edited 8:04am
Quoting Spreadbetter
Having warned of the measures in December, the European Securities and Markets Authority on Monday said it will prohibit the marketing, distribution or sale of binary options to retail clients and restrict the provision of contracts for difference (CFDs) in order to protect retail investors from what are seen as highly complex financial products. The measures are temporary but are likely to be renewed and there will be a consultation over making them permanent, the UK's Financial Conduct Authority said, having found that 76% of retail customers...
Official statement vs an article.

You can't find even one word about FX in the official statement?
  • #28
  • Edited 8:18am Mar 28, 2018 7:49am | Edited 8:18am
Why don't you ask your broker instead of arguing here whether restrictions will also be applied to FX or not?

Well I asked my broker. LMAX confirmed that there won't be any change in fx leverage.
  • #29
  • Mar 28, 2018 8:06am Mar 28, 2018 8:06am
Same at Pepperstone. Just asked them, they said they weren't asked to change anything about the leverage.

Spreadbetter, I wonder what are you actually gaining if this would get implemented, since you are rooting for this viciously. I mean what would change for you personally by this, considering that you should put more money into your broker's account as well. Is that a positive thing for you, or there is something else?
Price and volume reveals everything. The market moves on supply and demand.
  • #30
  • Mar 28, 2018 8:15am Mar 28, 2018 8:15am
Quoting RedWingFan
{quote} Appreciate you setting me straight
Sorry. I didn't mean to offend you. I've clicked on "quote" instead of "Post New Reply" button by accident.
  • #31
  • Mar 28, 2018 8:34am Mar 28, 2018 8:34am
Quoting grandaevus
Don't be a believer, be a knower. When you heard something, don't accept it as a truth without questioning it. Here's ESMA's official published statement. https://www.esma.europa.eu/sites/def...tervention.pdf Look at the heading : "ESMA agrees to prohibit binary options and restrict CFDs to protect retail investors" Then read the statement. 1:30 max leverage restriction is written under CFDs – agreed measures .
Therefore, New leverage restrictions will only be applied to CFDs , not spot Forex.
Excellent analysis, Grandaevus !
In another thread , me too said the same thing :
https://www.forexfactory.com/showthr...1#post10915631
  • #32
  • Mar 28, 2018 8:36am Mar 28, 2018 8:36am
Maybe we should collect the reply from each and every broker out there to get an overview, because Darwinex for example does not support this theory sadly:

""On the other hand, Forex are still CFDs, so the restrictions will apply."
  • #33
  • Mar 28, 2018 8:43am Mar 28, 2018 8:43am
Quoting Drolph
Maybe we should collect the reply from each and every broker out there to get an overview, because Darwinex for example does not support this theory sadly: ""On the other hand, Forex are still CFDs, so the restrictions will apply."
No, forex is not a CFD. CFDs and spot Fx are two different things.

In CFDs, you buy/sell contracts and market is opened and closed at a certain time.

In Fx, you can buy/sell currencies at any time.
  • #34
  • Mar 28, 2018 9:20am Mar 28, 2018 9:20am
They should ban FF lol
  • #35
  • Mar 28, 2018 9:29am Mar 28, 2018 9:29am
Quoting Drolph
Maybe we should collect the reply from each and every broker out there to get an overview, because Darwinex for example does not support this theory sadly: ""On the other hand, Forex are still CFDs, so the restrictions will apply."
Has Darwinex changed their leverage?
  • #36
  • Edited 12:25pm Mar 28, 2018 12:01pm | Edited 12:25pm
I dont trade retail, in the past I’ve been the other side of your bets. I’m completely 100% on the side of ESMA. After their intensive research they have (correctly) established that excess leverage is the cause of the 90% of European punters losing up to €30k, in the average 3 months they dabble in retail markets. That has to stop, it’s a ridiculous stat and situation. Any authority who continues to allow that to happen is derelict in their duty.

If retail punters are serious about trading they will immediately adapt and continue to profit. There is only one reason for the bleating; lack of capitalisation which (irony alert) is one of the main reasons reckless gamblers use excess leverage. Oh and please save me with the nonsense as to how gamblers can use excess leverage for their benefit and only want to leave enough cash in their account to trade, bank interest rates are pitiful, therefore my advice would be to place excess funds on a position trade, win-win.

Quoting Darastonius
Same at Pepperstone. Just asked them, they said they weren't asked to change anything about the leverage. Spreadbetter, I wonder what are you actually gaining if this would get implemented, since you are rooting for this viciously. I mean what would change for you personally by this, considering that you should put more money into your broker's account as well. Is that a positive thing for you, or there is something else?
"The meek shall inherit the earth.." Yeah right, good luck with that shit..
  • #37
  • Mar 28, 2018 12:23pm Mar 28, 2018 12:23pm
Quoting grandaevus
{quote} Has Darwinex changed their leverage?
Not yet, but they are going to implement the restrictions once necessary (that's what they said).
  • #38
  • Mar 28, 2018 2:26pm Mar 28, 2018 2:26pm
Quoting Spreadbetter
You've adapted to USA rules, you’re ahead of the curve, you’ve developed a professional attitude and outlook. That’s all any retail punter in Europe has to do. {quote}
If and when the rules trickle down to us in Australia, I won't be concerned or consider something stupid like putting money with an unregulated broker (putting all my funds at risk), just so I can overleverage myself, that's for sure.
Come with me if you want to live....
  • #39
  • Edited 3:32pm Mar 28, 2018 3:13pm | Edited 3:32pm
Solution:
Dukascopy
FXPig
FinPro

Forget UK/EU Brokers...

Spot FX will be treated as a CFD. It will take approx. 3-months to be implemented. So Don't expect UK brokers
to have new info on their websites.

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  • #40
  • Mar 28, 2018 10:32pm Mar 28, 2018 10:32pm
Quoting Spreadbetter
Cool story bro.. {quote}
Bro, I’m not gonna even bother convince you.

Just will mention that for March only I’ve made from FX trading more than the net monthly salary of a software department director of a 300+ people company here in Bulgaria.

So I leave you to warm that chair 9 to 5 in whatever “important” London bank or investment organisation you work - all day long. Enjoy!
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