ESMA restrictions

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How ESMA’s New Regulations Change the Trading Landscape

On the 1st of August, 2020 the rules dramatically changed for trading firms and their clients in Europe. The European Securities and Markets Authority (ESMA) enacted its product intervention powers to set the industry on a new path, with more robust protection for clients and more stringent rules for retail brokers.

Not only are retail traders now facing higher margins and correspondingly less leverage to use when placing trades. Retail brokers must now follow a new set of stricter rules that protect their client’s capital.

Why is ESMA changing the rules?

After ESMA was created on the 1 st of January 2020, it focused on regulating the Credit Rating Agencies following the 2008 Financial Crisis and ensuring that the existing legislation was adhered to in the rest of the industry. When the Swiss National Bank dropped its Euro peg of 1.20 in January 2020, many retails traders were caught positioned long in the market.

Within minutes prices fell from 1.20 to 0.75 before eventually settling at 1.00. By this time the damage was done, thousands of traders had been wiped out with the result that some high profile FX brokerages were forced to cease operating and file for insolvency.

This event proved that the industry was operating under a set of rules that offered scant protection to clients and exposed the financial system to increased risk during times of high volatility. ESMA could only react to this situation by investigating the industry and planning reforms to prevent similar issues arising in the future.

When MiFID II was enacted the accompanying piece of legislation, the Regulation on Markets in Financial Instruments and Amending Regulation (“MiFIR”), enabled ESMA to amend the regulations and change the how the industry operates.

What are the changes since the 1 st of August 2020?

  1. Binary Options: A prohibition on the marketing, distribution or sale of Binary options to retail investors and traders.
  2. Contracts for Difference (CFDs): a restriction on the marketing, distribution or sale of CFDs to retail investors. This restriction consists of: leverage limits on opening positions; a margin close out rule on a per account basis; a negative balance protection on a per account basis; preventing the use of incentives by a CFD provider; and a firm specific risk warning delivered in a standardised way.

This means that Binary Options are effectively banned while CFDs are dramatically changed under the new regulations.

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From the 1 st of August 2020 the five changes to CFDs include:

  1. Leverage limits on the opening of a position by a retail client, which vary according to the volatility of the underlying:
  • 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;
  1. A margin close out rule on a per account basis. This will standardise the percentage of margin (at 50% of minimum required margin) at which providers are required to close out one or more retail client’s open CFDs;
  2. Negative balance protection on a per account basis. This will provide an overall guaranteed limit on retail client losses;
  3. A restriction on the incentives offered to trade CFDs; and
  4. A standardised risk warning, including the percentage of losses on a CFD provider’s retail investor accounts.

These rules cover leveraged products including spread betting and are imposed on retail traders and clients. Professional traders are exempt from these rules.

What are the changes for Brokers?

Brokers offering products are faced with a number of changes concerning how they interact with clients, how they manage client accounts and how they operate. This includes a prohibition on the offering of bonuses, incentives, discounts and rebates to traders for opening more trades or trading with a bigger stake size.

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Brokers must protect client’s accounts more

Brokers now have to use more resources to manage their client’s accounts to prevent a negative balance and implement negative balance protection measures. They also have to ensure that individual trades are kept above the minimum margin requirements and that traders have sufficient funds to meet that level in their accounts.

Automated closure of trades occurs when the account balance is at 50% of the margin required for those trades to be opened.

Brokers must display standard warnings

Brokers are also required to display a standard warning to their clients that informs them of the risks associated with trading and what percentage of their clients lose money trading the financial markets. This message is also displayed on advertising and marketing material.

Different business models and marketing campaigns

These changes have an impact on the business model for brokers, with some affected worse than others. Many have launched new marketing campaigns to draw new clients in and are offering more educational material and trading tools to help their clients become more profitable and last longer trading the markets.

This implies that the broker wants their client to succeed and is trying to develop a stronger relationship with customers. This has put pressure on the no frill, low cost approach taken by some brokers, whose clients are under pressure from margin requirement rules.

Brokers are now facing a decline in the volume of trades as traders are now trading with less margin to open new positions. With some traders abandoning their careers in day trading and others opening accounts with unregulated brokers outside EU jurisdiction, the industry is being squeezed with the fear that many brokerages operating within the EU will go out of business.

Read:

What are the changes for Clients/Traders?

Clients and traders are facing the changes of having to now trade on higher margin and leverage costs. The trade off is that clients now have more protection than ever before but are more restricted in the risk that they can take. In essence the dreams of “getting rich quick” have had the brakes applied.

However a group of traders are exempted from these restrictions and are trading the same as before. This is known as the Professional Trader category. Many existing retail traders are trying to qualify for this group and avoid the impact of the new ESMA restrictions.

The qualification criteria are as follows and prospective applicants must meet two of the three conditions:

  1. Size of Portfolio – The size of the trader’s portfolio of investments exceeds EUR 500,000. This portfolio can include Stocks owned, Cash savings, Mutual funds and Trading accounts. Property, Jewellery, Luxury cars, Company pensions or Non-tradable assets are not included when this assessment is made.
  2. Professional Experience – A trader must work or have worked in the financial industry for a minimum of one year in a position that requires knowledge of financial products. This is to satisfy the requirement for sufficient knowledge on the part of the trader to understand the risk profile of the products traded..
  3. Trade Size and Volume – The trader must have traded in size of at least ten times each quarter during the past four quarters in a relevant product. Significant size is defined as EUR 50,000 on FX, Commodities and Indices and EUR 10,000 on an individual Stock. Relevant products include Futures, Options, Binary Options, CFDs, FX or Warrants.

Brokers are prohibited from canvassing clients and offering professional status because the change in status removes some of the rights retail traders enjoy. These include:

  • Negative Balance Protection – losses may exceed deposits and if the balance in the account is negative the trader will be required to make a payment to restore the balance to a positive number.
  • Risk Warnings – it is assumed that the trader already understands the risks associated with trading the particular product.
  • Leverage Restrictions – the new leverage restrictions that now apply to retail traders do not apply to professional traders.
  • Product Restrictions – it is assumed that the trader understands the risk associated with trading complex financial products that are high risk.
  • Communication – it is assumed that the professional trader has carried out a diligent study of the risk associated with trading financial products and has acquired the knowledge and experience to operate freely in the markets without broker input.

Other traders that cannot qualify for professional status are taking the drastic option of setting up accounts with brokerages operating in countries that are outside of the EU and ESMA jurisdiction. This action carries huge risks as those brokers may not offer the rights extended to retail and/or professional traders operating in the EU.

There is also the additional currency exchange risk associated with opening an account in a foreign currency, with the account balance being subject to exchange rate fluctuations and transaction fees.

Recommending Reading Next: Beginner’s Guide to Forex Trading

ESMA CFD Leverage Restrictions

About the NEW ESMA Regulations

ESMA (European Securities and Markets Authority) has just recently introduced new leverage restrictions for retail clients trading CFD’s with brokerages that are regulated within the European Union – including the United Kingdom (FCA regulation). The official release can be viewed here. ESMA’s intervention is restricted to a 3 month period by MiFIR (Markets in Financial Instruments Directive), after which it will have to be renewed on an ongoing basis.

What are the new leverage limits that will be imposed on newly opened positions?
  • 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
  • 2:1 for Cryptocurrencies
Who do the new ESMA restrictions apply to?

The new restrictions apply to any retail client (whether an EU resident or not) who trades Forex or other CFD products with a brokerage that is regulated within the EU or UK. The restrictions do not apply to professional traders and a number of affected brokerages are actively informing clients on the requirements to be considered to be a professional trader, which would allow them to trade at the pre-restriction leverage levels. Becoming a professional trader does however have some drawbacks (or disadvantages), which are discussed below.

How does one qualify to become a “Professional” trader?

In order to qualify as a professional trader, one needs to qualify for at least 2/3 of the ESMA established criteria:

  • Have An Investment / Financial Instrument Portfolio with a size equal to or greater than €500,000.00
  • Have worked in the financial services industry in a professional capacity with the relevant leveraged products
  • Posses trading experience, whereby you have carried out significant trades at a frequency of more that 10 per quarter

A search of relevant broker’s websites will provide further details on how to apply to elect to become a Professional trader

Are there drawback’s associated with becoming a Professional trader instead of a Retail trader?

Aside from the obvious advantage of having much higher leverage, there are some disadvantages that come along with the Professional trader status. Professional traders will no longer be covered by some of the safeguards that protect retail traders, such as compensation schemes against loss, negative balance protection, segregation of client’s funds, etc. These will not be the same across all brokers and jurisdictions and should be checked when apply for Professional trader status.

Can EU and UK residents trade with non-regulated brokers without any restrictions?

Yes. EU and UK residents are not prohibited from trading with brokers who are not regulated within the EU or UK. So, for example, EU residents can open accounts with non ESMA regulated brokers and trade without the ESMA leverage restrictions. Note: as you might be aware, some brokerages are regulated in a number of countries for example ThinkMarkets is regulated both by the FCA (United Kingdom) and also by ASIC (Australia). In cases such as these, the brokerages will tend to require that EU clients be subjected to the ESMA regulations, while non-EU clients can fall under the ASIC regulation. However brokerages, such as ICMarkets who are only registered with ASIC, or other broker who have multiple regulators which do not fall under ESMA’s jurisdiction, will still be able to offer EU clients trading conditions free of the new ESMA regulations.

Were there any other restrictions that ESMA introduced, other than on leverage rates?

In addition to tiered caps on leverage rates for different CFD products, ESMA also:

  • Imposed mandatory Negative Balance Protection for retail clients. This is a good thing and assures that a client’s account balance can never go below zero (into a negative balance) as the result of a losing position
  • The promotion, sale or trading of Binary Options is completely banned to Retail trader’s
  • Additional transparency – brokers will be required to display the percentage of losing vs winning client’s
  • Closeout of one or more open positions once required margins go beyond 50%
  • A restriction on the promotion (including the offering of bonuses or other enticements) of incentives to trade CFD products

These new, fairly draconian, restrictions are aimed at protecting retail traders of CFD products within the EU but may turn out to have quite the opposite effect and will likely see EU and UK retail traders simply opening trading accounts in with brokers that are not regulated within the EU and may offer less protection – outside of ESMA’s sphere of influence. As Always, it is highly recommended that you carefully consider your options …

Which countries are affected by the new ESMA regulations?

All EEA (European Economic Area) countries – 28 of them in total, plus Iceland, Liechtenstein and Norway who have a special arrangement with the EU which allows them to be part of the single market but not official members – are subject to ESMA regulation.

ESMA – European Securities and Markets Authority

The European Securities and Markets Authority (ESMA) is an independent European Union financial regulatory body. From its headquarters in Paris, the body looks to enforce a range of new trading rules and regulations to enhance the functionality of securities markets. This page will break down everything you need to know about ESMA, including its history, meaning, criticisms as well as links to the MiFID II Directive.

What is ESMA?

Let’s take the most straightforward of ESMA definitions; it’s a supervisory authority that works to safeguard consumers while strengthening financial markets in the EU. It is actually one of three relatively new European Supervisory Authorities.

Its remit covers a whole host of areas within regulated markets. In fact, it helps with everything from promoting transparency and preventing market abuse to distributing transaction reporting guidelines. The regulatory agency also takes an interest in new issues, such as the blockchain cryptocurrency Bitcoin and the growth of binary options.

See below for a comprehensive break down of ESMA duties and regulations.

Purpose

The main objectives of ESMA regulations are:

  • Increase investor protection
  • Promote stable and efficient financial markets
  • Create an “EU-wide financial markets watchdog”

Those aims mean their opinions, decisions and judgements must reflect the interests of the following areas and stakeholders:

  • The economy
  • General public
  • Financial market participants
  • Regulators of securities markets
  • Both retail and institutional consumers

When ESMA was set up, one of its key missions was to regulate credit rating agencies. This is because, in 2020, credit rating agencies were frequently in the news for a lack of transparency and potential conflicts of interests.

It’s also worth noting to fulfil its aims it works closely with other European Supervisory Authorities in banking (EBA), as well as insurance and occupational pensions (EIOPA). Its approval and recommendations in all areas are of increasing importance.

ESMA Compliant Brokers

History

ESMA came to life following the recommendations of the 2009 de Larosière report. In the report, proposals were made for the creation of a decentralised European System of Financial Supervision (ESFS).

ESMA set to work on January 1st, 2001, following the announcement it would replace the Committee of European Securities Regulators (CESR), a network of EU authorities that advised the commission.

Structure

ESMA is an independent body with head offices in Paris. However, it does have accountability to the European Parliament where it answers to the Economic and Monetary Affairs Committee (ECON). In addition, the body has full accountability to both Council of the European Union and European Commission. ESMA has to report on its activities regularly at meetings and in a final Annual Report, including inducements on:

  • Algorithmic trading updates
  • MiFID II Product governance
  • Warnings on virtual currencies
  • Registering different asset classes
  • Target markets and trading venues
  • Trade reporting and reference databases
  • Forex leverage restrictions and margin rules
  • Regulations on spread betting, CFDs and ETFs

As the website details, the Board of Supervisors must make all policy decisions and approve ESMA’s regulations. The board consists of:

  • European Commission observers
  • The heads of 28 national authorities
  • Delegations from Iceland, Liechtenstein and Norway
  • One representative from each of the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA) & the European Systemic Risk Board (ESRB)

A management board made up of ESMA’s chair, as well as nominees from national supervisory authorities and Commission representatives see to it the regulatory agency meets its responsibilities.

Powers & Responsibilities

ESMA’s duties and powers extend far beyond finance education and investment advice. In fact, the regulatory agency seeks to meet its objectives via four activities:

1. Measuring Risk

ESMA measures risk to investors, consumers and market stability. It aims to spot potential threats and vulnerabilities from reportable instruments. This then enables preventative action to be taken to avoid problems that threaten investors or market stability.

To do this, it uses MiFID II guidelines, databases and can call for evidence. It also uses risk assessments from other European Supervisory Authorities (ESAs) and National Competent Authorities (NCAs). Both of which adds to the efforts of the European Systemic Risk Board (ESRB).

ESMA also helps implement stress testing. The results of a second stress test were published in 2020 in an attempt to assess the stability of the EU Central Counterparties (CCP) industry. They also help to hone in on potential vulnerabilities.

This all allows them to offer guidance on transaction reporting, remuneration, compliance functions, complex debt instruments, market abuse regulation and more.

2. Rulebook

ESMA also hopes to create a comprehensive rulebook for EU financial markets. This aims to create equal opportunities for investors and issuers across the EU. To build this book of regulations, ESMA develops Technical Standards by advising EU bodies on legislation. This was one of the key ESMA roles during the development phase.

3. Supervisory Convergence

ESMA works to ensure consistent implementation of the same regulations across all 28 Member States. For example, this means issuing notifications of leverage caps, validation rules and ensuring all abide by liquidity thresholds.

If it works, this can help share best practices and decrease inefficiency. And all while promoting a level playing field for market participants.

To help it achieve this aim, ESMA:

  • Enforces data reporting requirements
  • Holds Q&As on issues and regulations
  • Builds common work programmes
  • Drafts opinions & guidelines
  • Pursues peer reviews

ESMA also plays a role in supervisory colleges for CCPs. This adds to supervisory convergence.

4. Supervising Financial Institutions

ESMA has supervisory powers over Credit Rating Agencies (CRAs) and Trade Repositories (TRs). Both of which play integral parts in the EU’s market infrastructure.

All four activities overlap and work towards the overarching aims of protecting consumers while promoting stable markets.

In 2020 ESMA was also asked by the EC to offer technical advice on the equivalence between some non-EU countries regulations and the EU framework. For example, were there any conflicting reporting requirements from investment firms?

ESMA Restrictions

It’s worth noting ESMA does not have the power to take action against market actors, except CRAs and TRs. So if you have problems with negative balance protection or complex products, you will need to direct your complaints elsewhere. You may be best off approaching the relevant national authority.

Note there is also a Whistleblowing corner when you can report violations, such as securitisation issues.

Criticisms of ESMA

Proposals to expand ESMA’s jurisdiction have been met with far-reaching criticism. Following Brexit, some want to use ESMA to help position France as the finance capital of Europe. In fact, France has already made some progress in this area after winning the bid to host the London-based European Banking Authority after the UK leaves in 2020.

The regulatory agency itself has also seen substantial expansion since its launch in 2020. This is in part due to the significant revision of market regulations, best known as MiFID II. Many argue further expansion proposals would see ESMA become the equivalent of the US SEC and the UK’s FCA.

The proposals would see ESMA as the EU benchmark for regulations. The body would also receive greater powers to tackle market abuse and limit the use of products thought to be too risky.

Events, press office releases and statements make it clear that many strongly oppose anymore ESMA expansion. This is because it is thought the move would cut into the rule-making powers of national authorities. In addition, it would lead to excessive and expensive bureaucracy.

Resources

Despite some criticism, ESMA is very proficient in one area, and that’s access to data and information. Simply head over to the official website to find AIFMD key concepts guidelines, for example. You can also find leverage proposals, product intervention notifications and recent CFD announcements.

On top of that, you will find waivers, volume cap reports, disclosure requirements, plus volatility bands and the benchmark administrator register.

Recent Performance

ESMA has been highly active in its relatively short life. One of the main things it has done is seek opinions from delegations on market transparency, as well as a whole range of other issues. For example, it consults on CFD and binary options measures. It has also held a huge number of Q&As on:

  • CFDs
  • Insider lists
  • Short selling
  • Position limits
  • Variation margins
  • Costs and charges
  • Best execution policies
  • Commodity derivatives
  • Transparency & liquidity
  • Instrument classification
  • Remuneration guidelines

In 2020, ESMA’s activities led to enforcement action being taken against 43 of 206 listed issuers. They found issues with:

  • Inadequate risk disclosures
  • Incorrect library of cash flow statements and relevant information

2020 then saw a 10% increase in the action taken. Most infringements were found in relation to:

  • Inadequate accounting for financial instruments
  • Incorrect presentation of financial statements
  • Deterioration of non-financial assets

As ESMA’s knowledge and competence continue to grow, they may receive greater powers to enforce regulations. But for now, a lot of work is done on consulting about trading obligations and reporting in the list of EU regulated markets.

Final Thoughts on ESMA

The ESMA system is a network that unites European and national regulators, as well as supervisory authorities. There is no doubt their regulations aim to protect investors and encourage stable markets. However, much of Europe still currently resists the idea of a single EU rulebook and financial name, wanting to retain some national authority and power. So it is currently difficult to predict what the future of ESMA will look like or how extensive their regulatory powers may grow.

ESMA Regulations: Everything You Need To Know

The European Securities and Markets Authority (ESMA) recently announced a series of regulations and restrictions for CFD and Binary Options providers. These ESMA regulations have created waves within the industry,… read more →

View all articles by James Sinclair

Tuesday June 26, 2020

The European Securities and Markets Authority (ESMA) recently announced a series of regulations and restrictions for CFD and Binary Options providers. These ESMA regulations have created waves within the industry, some have welcomed the new regulations with open arms, others have been foreboding. TFG investigates the impact of these regulations on currency providers.

The European Securities and Markets Authority – What Happened

Forex.com in fact called the measure an attempt by government bureaucrats to nanny the forex industry – under the guise of protecting the “little people” that don’t know what is good for them. They also likened the move to the strangulation of the Forex industry by the CFTC in the US.

Before we buy into the doom and gloom, first let’s take a look at what ESMA is, what regulations ESMA is recommending, what types of financials products and industries it affects and what all of this will mean to retail traders.

What is ESMA?

ESMA is the European Securities and Markets Authority , which according to their website is an independent authority with jurisdiction within the EU with the mission to ensure the stability of the EU’s financial system. This includes protecting investors – which is relative to our conversation. It was founded in 2020 as a response to the de Larosiere report that called for a decentralized network of European Financial Supervision. ESMA replaced the Committee of European Securities Regulators (CESR) – a network of European Union authorities that ensured consistent supervision across the EU and held an advisory role for the European Commission.

This function – of investor protection – elaborates into assessing risk to investors and markets.

ESMA although an independent authority is still accountable to the European Parliament and reports to the Economic and Monetary Affairs Committee (ECON) – upon request of a formal meaning. It is also accountable to the EU’s Council and EU’s Commission. Their activities are not only reported to these bodies but also in an annual report.

ESMA has four primary functions:

  • Assessing risk to financial stability, markets and of course investors.
  • Compiling and creating an all-encompassing rulebook for European Union financial markets.
  • Coalition of economic supervision.
  • Direct supervision of specific entities within the financial industry.

It also holds a direct supervisory role of Trade Repositories and Ratings Agencies. Both of these agencies are crucial to the European Union’s market infrastructure.

What are the ESMA Regulations?

The latest ESMA regulations largely focus on Binary Options and CFD trading (both regulated and unregulated) within the EU. First let’s take a look at what binary options and CFDs are.

ESMA Binary Options Regulations

Also known as an assets-or-nothing option. It offers a fixed compensation when the option is “in the money” upon expiry or nothing at all if it expires “out of the money”. Another distinction is that this type of option is automatically exercised, meaning the investor doesn’t have a buy or sell choice on the underlying asset when the contract expires. This type of trading became extremely popular due to its simplicity – a basic “Yes” or “No” choice was made to commit the trade.

What are CFDs?

Known as contracts for difference – it is in basics, a contract between broker and client – which exchanges the difference between the price at the beginning of the contract and the price at its end – and it is fulfilled in physical funds. The biggest appeal of these instruments are the ability to use leverage – which coincidentally is what ESMA is trying to reduce significantly with the new regulations. Leverage increases a position’s exposure to the markets. What does this mean? Essentially a 1:10 leverage (it can also be seen as 10:1) trade means that 50 USD can buy 500 USD worth of an instrument. The problem is that a smaller fluctuation of the market can cause losses – leverage is a ratio and it works both ways. Ultimately, it’s a tool for sophisticated traders that can undeniably lead to losses when used irresponsibly. Any tool that’s abused can lead to damages. This is actually the largest point of contention for the new regulations by traders. They believe that the unwarranted restriction of the CFD industry under the premise of protecting traders from themselves is unfair and undermines these same traders’ intellect.

The Repercussions of the ESMA CFD Regulations

The ESMA CFD regulations will definitely have an impact on retail traders – as they are usually the ones that trade with higher level of leverage. Institutional clients typically avoid using high leverage (they generally use lower leverage to avoid volatility). The distinction is significant too because some brokers were offering upwards of a 100:1 leverage on certain instruments – that is capped at 30:1 for FX. That means 5 USD with a 200:1 leverage applied would have a value of 1000 USD – whereas after the regulations activate these will be worth 150 USD.

This is where the benefit to the trader comes in, even though the draconian restriction of leverage seem less than optimal at the moment. Predatory brokers that profit from their clients’ losses, will have a much more difficult time doing so after the regulations. This should clear the industry of less than transparent and exploitive brokers. Which is ultimately what the regulations sought to achieve. So in that sense hypothetical mission accomplished ESMA.

What type of broker will be hit the hardest?

Many people are pointing towards Market Maker brokers being the biggest losers of the new regulations, because a predominate misconception exists that market makers gain from their clients’ loses. Market makers in fact make money from spreads – the difference between that “ask” and “bid” price or the market price and the price offered to the trader or client by the broker. This is why you will see certain variable spread Market Markers increase their spreads during volatility as they take on more risk and convey that to their clients. Ultimately no matter what the type of broker it be a Market Marker or STP, the primary repercussion will be a loss of retail level traders, that use high leverage or trade with less capital. STP brokers, Straight Through Processing Brokers – also known within the industry as Non Dealing Desk Brokers, generally display their own quotes like Market Maker brokers and are in fact Market Makers but selectively. STP brokers will route successful orders to market but act as a Market Maker when a position/trade is in loss. This mitigates the company’s risk as it is not obligated to shoulder their clients’ winnings, but still profiting from their clients’ losses. Although this sounds nefarious, it only becomes so when the broker intervenes to increase the chances of a loss – which could cost a broker their reputation or even worse their license.

This move in the long run might actually benefit all brokers – as a lot of the industry’s bad reputation comes not only from some predatory practices but largely stems from retail traders trading irresponsibly, either without being knowledgeable enough to trade, or using excessive amounts of leverage to “cash in” big – but usually end up decimating their accounts and funds.

As it stands although the ESMA regulations have their opponents, it seems that well established veterans of the CFD and Forex industry are welcoming them with open arms. Some have even started to offer alternative and innovative ways to trade , in an attempt to preserve the previous trading experience, but still be compliant with the new regulations.

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