New ESMA regulation

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Csongor Pall
207
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
207
Csongor Pall  
https://www.replytoesma.trading/
ReplytoESMA
ReplytoESMA
  • www.replytoesma.trading
In total, 14,605 replies were submitted via this website during the consultation period – with 98.1% against ESMA’s proposals. ESMA has listened to traders on margin close-out rules and adapted its policy accordingly. A 50% close-out rule will now apply on an account basis, rather than on a position-by-position basis. We’d like to thank all...
Csongor Pall
207
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
207
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
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