European Securities and Markets Authority lowers leverage
The wild-west days of trading in foreign exchange are slowly being curbed. At one point, 200:1 leverage was standard and it seemed anyone, anywhere could open a broker.
The SNB, followed by the binary options fiasco and a few other bad actors started a wave of regulation that continued this week with new European Securities and Markets Authority rules for the FX and CFD industry.
Here’s a rundown:
- Maximum forex trading leverage cut to 1:30
- Gold to 1:20
- Other commodities 1:10
- Stocks 1:5
- Brokers must provide negative balance protection
- Marketing must clearly display what percentage of clients lose money
Lower leverage isn’t entirely bad and negative balance protection is great but that last one is ridiculous. If that’s going to be the standards, then casinos should have to do the same thing.