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European ESMA regulations
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European ESMA regulations

  #1 (permalink)
Trading Experience: Intermediate
Platform: NinjaTrader
Broker/Data: IG
Favorite Futures: FDAX
Posts: 6 since Feb 2016
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European ESMA regulations


I trade European indices with a spread betting account and live in the U.K.

In July the European regulator is introducing draconian measures to try to kill off retail traders (under the pretence of protecting them).

Spread leverage will increase from 50:1 to 500:1 for indices like the Dax and FTSE. This means increasing account size by a multiple of 10 potentially for many retail traders. Ok, so most will be able to add funds to reach the levels required, but the problem comes when adding positions to an open trade, as once again this will require a similar increase in account size, depending what percentage of your account you choose to trade. So to trade the way I do today, I will need to increase my account size by a factor of 20.

I resent strongly a bunch of numpty European beaurocrats interfering with my day trading in this way, as I am sure most of you UK spread betters also do.

So my question is this. Has anyone on this forum found a legal way around this in the form of an offshore spread betting account, or other imaginative solution please?

I have tried registering as a professional trader to overcome this problem, but my application was rejected for insufficient experience working within the industry.

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  #3 (permalink)
Tallinn Estonia
Trading Experience: Master
Platform: MT5,MT4
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Posts: 40 since Dec 2018
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ESMA will kill CFD

For example Japan is going to get the third cutting of the leverage to 1:10 since 2008 , when the cap was set at 1:50, followed by another halving to 1:25 several years later. Currently the 1:25 leverage is among the lowest, along with that in Turkey, which recently was set at 1:10.
Now Europe (incl. UK and Norway) with the first cut to 1:30 is following ! to fight CFD/Forex ! ?

You could argue no problem let us change to Futures ! Unfortunately not good for Forex/HFT trading!

So you can go light Offshore (possible Switzerland, South Africa, Australia ...) but I think not for very long.

or you go heavy offshore (possible Mauritius, Belize ...) offering still 1:500 or even more!

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  #4 (permalink)
Amsterdam + Netherland
Trading Experience: Intermediate
Platform: Tradestation Global, PRT
Broker/Data: IB and atm Tradestation Global as introducing broker. May change to PRT.
Favorite Futures: Emini ES, (I used to have some ETFs here, but now I cant buy them, only buy options. To protect me..
Adolpho911's Avatar
Posts: 5 since Jan 2020
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This is also an old post. But Australia has very good protection for your money (no banana republic rules, which are lawless.

There are several options regarding CFDs (not spread betting as this is only a UK thing I think regarding taxes). However they have old leverage rules. I am pretty sure that Tradedirect365 is the cheapest fixed spread broker out there. No commissions, just low fixed spread, no matter what market condition. They beat everyone. ATM (maybe don't say on the website) they have 0.4 points spread on FTSE (and maybe also on cable, as 0.4 pip). Anyway, during RTH, they have 1 point spread on dax/dow and I think Nasdaq all around the clock. Eurusd is 0.6 or 0.8 pip.

ALSO! You can make a single currency account, which includes, of course, all major currencies, but also (for me) Norwegian krone. So no exchange. My trade when trading dax is in NOK. In SP, it is NOK, in any currency pair, no matter if you sell or buy, the currency you trade is in NOK (or of course your choice of currency. However opening a futures account, I see this is a very good feature, not having money in several currencies regarding what you trade different products.. (or pay some exchange fee for every trade. A very very good system that a lot of brokers should use aswell!!!

If you like mt4, you will be well off, however, their web platform (cloudtrade is not that fancy. No "bells and whistles", quite opposite). Also, some of the support, don't know much trade-related things (like trying to understand execution order and customer service guy needed to be explained what Fifo was...

But, I think I can do a bet that you won't find a CFD broker that is cheaper to use AND have pre-MifidII leverage!

(I do not have any interest or if notice, no link which I probably could get some referral bonus with. However, if you check it out and you aswell get a bonus being referred by someone, I will do it, no problem. Just send e a message,)


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