Germany’s financial regulator BaFin plans to apply permanently ESMA’s CFD trading restrictions on a national level. The decision is intended as a protective measure for retail investors which will take effect in 2019.

In its official notice the German financial watchdog clarified that it aims to “permanently match the level of protection in Germany to the temporary product intervention measure issued by ESMA.” This is partly done to prevent attempts to evade these measures by providers from other EU countries. Another reason is that the ESMA can only apply such product intervention measures on a temporary basis.

mlawson71 wrote: Mon Dec 24, 2018 8:22 pm Germany’s financial regulator BaFin plans to apply permanently ESMA’s CFD trading restrictions on a national level. The decision is intended as a protective measure for retail investors which will take effect in 2019.

In its official notice the German financial watchdog clarified that it aims to “permanently match the level of protection in Germany to the temporary product intervention measure issued by ESMA.” This is partly done to prevent attempts to evade these measures by providers from other EU countries. Another reason is that the ESMA can only apply such product intervention measures on a temporary basis.

oh what does it mean for fx traders in german country?

BaFIN will be applying ESMA's new mandated rules, namely:

1. A leverage cap, depending on the underlying asset:

· 30:1 for major currency pairs;

· 20:1 for non-major currency pairs, gold and major indices;

· 10:1 for commodities other than gold and non-major equity indices;

· 5:1 for individual equities and other reference values;

· 2:1 for cryptocurrencies;

2. A margin close out rule on a per account basis. According to it, CFD providers are required to close out one or more retail client’s open CFDs at 50% of the minimum required margin;
3. Negative balance protection on a per account basis. This means that investors cannot lose more than they have deposited;
4. A restriction on the incentives offered to trade CFDs;
5. A standardized risk warning, including the percentage of losses on a CFD provider’s retail investor accounts.

mlawson71 wrote: Fri Dec 28, 2018 1:55 am
1. A leverage cap, depending on the underlying asset:

· 30:1 for major currency pairs;

· 20:1 for non-major currency pairs, gold and major indices;

· 10:1 for commodities other than gold and non-major equity indices;

· 5:1 for individual equities and other reference values;

· 2:1 for cryptocurrencies;

2. A margin close out rule on a per account basis. According to it, CFD providers are required to close out one or more retail client’s open CFDs at 50% of the minimum required margin;
3. Negative balance protection on a per account basis. This means that investors cannot lose more than they have deposited;
4. A restriction on the incentives offered to trade CFDs;
5. A standardized risk warning, including the percentage of losses on a CFD provider’s retail investor accounts.

They have gone for the jugular! :o

It's been going on since August, I think. BaFIN is just implementing them now, though regulators in other countries did so much earlier.