Regulators have long expressed concern that the availability of excessive leverage in the retail FX market represents a notable risk, both for individual traders – who might lose more money than they can afford – and for the system as a whole.
In recent weeks, the European Securities and Markets Authority (ESMA) has moved to tackle the issue, with a proposal to set a leverage cap for retail FX trading.
The proposed cap would limit leverage to 30-times for major currency pairs and 20 times for non-major pairs and gold, with even lower limits for some other commodities.
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