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Major brokers support ESMA's restrictions on leverage, binary options, but also voice concern

#1
Some of the largest regulated forex brokerages in the world – FXCM, IG Group, Gain Capital, CMC Markets, Plus500 - have expressed their general support for the intentions of the European Securities and Markets Authority (ESMA) to impose new restrictions on the industry in order to better protect retail clients, but also voiced their concerns.

Last Friday ESMA issued an interim update, in which it outlines its intentions to cap the leverage on forex and CFDs to anything between 1:5 and 1:30, depending on the volatility of the underlying product. Additionally, ESMA is planning a blanket ban on the distribution and marketing of binary options products across the EU. There will also be new rules about margin, negative balance protection, trading bonuses and risk warnings.


Re: Major brokers support ESMA's restrictions on leverage, binary options, but also voice concern

#2
ESMA's motivation in putting forward the proposal of the leverage cap is understandable at some point . But i am prone to think that the losing traders, actually lose not because of high leverage but due to lack of knowledge and greed. The leverage is only an instrument we have at our disposal .And even if the changes in the leverage are implemented ,the inexperienced traders would still lose , but slowly .Therefore i think that the margin proposals of ESMA are unnecessary,there are sufficient safeguards like margin calls, stop out ,stop loss positions. Additionally there are Brokers which provide great webinars, researches and articles which could help traders to practice ,grow their knowledge ,skills and expertise which would be way more helpful. Therefore the present regulations and margin requirements are enough in my opinion...

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