New ESMA regulation

[Csongor Pall]

In March, the European Securities and Markets Authority (ESMA) announced having agreed on a range of measures intended to harmonise EU-wide regulation and to provide better protection to retail clients trading leveraged products, like CFDs. The new measures will take effect from 30 July 2018.

Anybody knows how the ESMA regulation will be implemented at Roboforex? 

Cheers

[Csongor Pall]

https://www.replytoesma.trading/

[Csongor Pall]

https://www.esma.europa.eu/sites/default/files/library/esma35-43-904_call_for_evidence_-_potential_product_intervention_measures_on_cfds_and_bos_to_retail_clients.pdf

[Csongor Pall]

More about this proposal

ESMA is considering a number of proposals aimed at retail clients, to try to increase conduct standards across the industry.

While many of the proposals are sensible, this site focuses on the two that are likely to have a significantly negative effect on traders.

ESMA is suggesting the following leverage limits:

• 30:1 leverage on major currency pairs = 3.33% margin
• 20:1 leverage on major indices = 5% margin
• 10:1 leverage on commodities (excluding gold) = 10% margin
• 5:1 leverage on equities = 20% margin

How could this proposal affect traders?

This proposal would severely increase the margin required to trade. See examples below:

Spread betting

MARKET - £10/POINT

CURRENT MARGIN ESMA PROPOSED MARGIN

EUR/USD £611  £4,073

DAX  £660   £6,600

Oil - Brent Crude  £1,035  £6,900

Apple  £8,950  £32,800

CFD

MARKET SIZE

CURRENT MARGIN ESMA PROPOSED MARGIN

EUR/USD1 standard lot$611   $4,073

DAX1 standard lot€1,650   €16,500

Oil - Brent Crude1 standard lot$1,035   $6,900

Apple1,000 shares$8,950  $35,800