ESMA

ESMA2018-08-20T12:22:27+00:00

ESMA Regulations
The European Security and Markets Authority (ESMA) announced new regulation standards for leveraged trading, which will come into effect on Wednesday 1st August 2018. Please find all details about the regulations and how your trading activities will be affected on this page.

About ESMA
In the beginning of this year ESMA proposed major changes to leveraged trading, which has been intensely discussed within the industry. FCA regulated brokers as well as their clients have been involved in the debate. In early May this year, ESMA announced the details about its new policy, which will come into effect on 1st August 2018. The key changes will be:
– Restricted leverage on spread betting, CFD and forex products,
– Raised stop-out levels to 50%,
– Negative balance protection.
– Restricted Leverage – ESMA Product Groups

Please find ESMA’s proposed leverage changes for each product group in the table below:

Product GroupMaximum Leverage From
1 August 2018
Additional Margin Required For Retail Clients
Major FX pairs30:114x
Major Indices, Minor FX pairs, GOLD (XAUUSD)20:15x
Commodities (excl. Gold) Minor Indices10:110x
Cryptocurrencies2:1-
Bund5:140x
Equities5:14x

Negative Balance Protection

The new ESMA ruling will ensure that retail traders will not lose more than the money available on their account. If your retail trading account becomes negative, the provider (AKFX Financial Services) will now be required to bring the balance back up to zero. This rule will be applied on 1st August 2018 across all retail AKFX trading accounts.

CrescoFX’s Products Listed According to ESMA’s Product Categorization

Below you will find a non-exhaustive overview of Cresco’s product offering and their new leverage requirements. They are listed based on ESMA’s product groups.

CategoryForeign Exchange  Indices BondsCommodities CryptoEquities
Leverage30:120:120:110:15:120:110:12:15:1
Sub-CategoryMajor FXMinor FXMajor IndicesMinor IndicesBondsCommoditiesCommoditiesCryptoEquities
ProductsCADJPYAUDCADCAC40AEX25BundGOLDBRENT FuturesBTCEURUK Equities
CHFJPYAUDCHFJPN225DXYSPOTXAUUSDBRENTSPOTEUTHEURUS Equities
EURCADAUDHKDAUS200
ESP35COCOABTCUSDDE Equities
EURCHFAUDJPYESX50HK50COFFEE
ETHUSDFR Equities
EURGBPAUDNOKDAX30 (Spot and Future)HK-SharesCORN FuturesDSHUSDCH Equities
EURJPYAUDNZDNAS100 (Spot and Future)SMI20COTTONLTCUSDNL Equities
EURUSDAUDSGDSP500 (Spot and Future)HGC (Copper) FuturesXRPUSDPL Equities
GBPCADAUDUSDUK100 (Spot and Future)NG (Natural Gas) FuturesES Equities
GBPCHFCADHKDWS30 (Spot and Future)SILVER (Spot & Futures)
GBPJPYCHFTRYSOYBEAN Futures
GBPUSDEURAUDSUGAR
USDCADEURCNHWTI Futures
USDCHFEURCZKWTISPOT
USDJPYEURHKDXAGUSD
EURNOK
EURNZD
EURPLN
EURSEK
EURSGD
EURTRY
GBPAUD
GBPCZK
GBPEUR
GBPHKD
GBPHUF
GBPNZD
GBPSEK
GBPSGD
GBPTRY
HKDSGD
NZDCAD
NZDCHF
NZDHKD
NZDJPY
NZDSGD
NZDUSD
USDCNH
USDCZK
USDHUF
USDNOK
USDPLN
USDSEK
USDSGD
USDTRY

How Will These Changes Affect Your Trading Activities?

Below we would like to provide you some trading examples, which will help you to understand the new ESMA rules better.
The required margin will increase across all products and you will need to add additional funds to your trading account or manage your open positions to avoid being closed out at market.

Working Examples For Clients Trading on FX/CFD Trading Accounts

FX/CFD Account

Product GroupMaximum Margin from 1 August 2018Maximum Leverage from 1 August 2018Additional Margin Required for Retail ClientsProductVolumeCurrent LeverageNew LeverageCurrent Market Price*Curent MarginNew Margin
Major FX Pairs3.33%30:114x EURUSD1 Lot400:130:11.17466EUR 250.00EUR 3334.00
Major Indices5%20:15x DAX305 Lot100:120:112785.8EUR 639.29EUR 3196.45
Minor FX pairsEURNZD1 Lot200:120:11.67345EUR 500.00EUR 5000.00
GOLD (XAUUSD)GOLD 0.1 Lot100:120:11298.2USD 12.98USD 64.92
Commodities (exd. Gold)10% 10:110xWTISPOT3 Lot100:110:165.88USD 197.64USD 1976.40
Minor indicesESP35 10 Lot100:110:1 9760.5EUR 976.05EUR 9760.50
Cryptocurrencies50%2:1-BTCUSD0.1 Lot2:12:16416.4USD 320.82USD 320.82
Equities20%5:14xBPUK20 Lot20:15:1589.11GBP 589.11GBP 2356.44

*Please note that this was the market price at the time the example has been generated.

CrescoFX Professional Clients

The new ESMA margin changes will not affect CrescoFX’s Professional Clients.

In order to find out more about the requirements to become an Elective Professional Client with CrescoFX, please contact us on admin@www.crescofx.com