ESMA
European Securities and Markets Authority - EU-wide regulator setting rules for all member states.
Definition
ESMA (European Securities and Markets Authority) is the EU's financial markets regulator that sets rules implemented by national regulators (FCA, CySEC, BaFin, etc.). In 2018, ESMA introduced strict leverage limits and banned binary options for retail traders across the EU.
How It Works
- Sets EU-wide rules implemented by national regulators
- Leverage caps: 30:1 forex, 20:1 indices, 2:1 crypto
- Mandatory negative balance protection
- Risk warnings required on all marketing
Trading Tips
1
ESMA rules apply to all EU/EEA regulated brokers
2
Professional clients can access higher leverage
3
Rules designed to protect retail traders from losses
Related Terms
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