ESMA

ESMA is the European Securities and Markets Authority. It set the maximum leverage and retail client protections for CFDs in the EU.

Since 2018, ESMA rules, adopted by each national regulator, govern CFDs for retail clients in the EU, and the FCA kept the same framework in the UK. Maximum leverage: 30:1 on major currency pairs, 20:1 on other pairs, gold and major indices, 10:1 on other commodities and minor indices, 5:1 on shares and 2:1 on cryptocurrencies.

On top of that come automatic closure of positions when your margin falls to 50% of the required minimum, negative balance protection, a ban on trading bonuses and a standard risk warning.

These limits don't apply to clients classed as professional, who give up part of these protections.

The full lessonESMA and FCA rules: leverage limits, negative balance protection and pro statusESMA and FCA leverage limits by asset, 50% close-out, negative balance protection, professional client status and offshore brokers: what really protects you.