New Leverage Restrictions?

[Soulman]

I can't get a clear understanding of the new leverage rules from European brokers, as I can't find clear definitions.

I read that Cysec regulated brokers default will be 1:50, however you have to prove suitability for higher leverage, FCA brokers seem to me to be offering max 1:50 and that's it, German brokers I have not paid too much attention to till now so not clear.

Can anyone help to clarify the situation before I choose a new broker?

 

[Pharaoh]

Good question, and it can also be used as a warning for "multi-regulated" brokers.

For example, I can name any number of brokers (won't name them here - Spam Cat often gets hungry when he sees broker names here) which hold regulations in several countries. So, if you sign up with what you think is a Cysec or FCA regulated broker and the broker offers leverage above the legal limit for the UK or Cyprus, guess what? It means that your broker is ignoring the rules and/or has your account at one of their far less regulated offshore branches.

The good news is Spam Cat has never objected to recommending countries. So, does anyone know which European countries offer what leverage?

 

[MYFXPT]

Good question, and it can also be used as a warning for "multi-regulated" brokers.

For example, I can name any number of brokers (won't name them here - Spam Cat often gets hungry when he sees broker names here) which hold regulations in several countries. So, if you sign up with what you think is a Cysec or FCA regulated broker and the broker offers leverage above the legal limit for the UK or Cyprus, guess what? It means that your broker is ignoring the rules and/or has your account at one of their far less regulated offshore branches.

The good news is Spam Cat has never objected to recommending countries. So, does anyone know which European countries offer what leverage?

That's a really good point. Only yesterday I sent an email to a multi-regulated broker asking: If I open an account with you, under which regulatory jurisdiction will the account operate? This can be confusing at best, misleading at worst!

 

[Pharaoh]

Sadly, it can go way past misleading and straight into fraudulent territory.

 

[Makenzie Malachi]

Basically this leverage restriction is for multi regulated trading broker. Multi regulated broker offers different volume of leverage to their broker which violates the rule of UK trading. Because in which rules will go there regulation is not defined yet. So, better trading with single regulated trading broker to stay safe. As leverage is very risky trader should select a good broker checking their money management and risk management. Otherwise it may cause of huge loss.

 

[iMusingKiMi]

Actually I think even 1:50 leverage are consider big enough, otherwise it is already consider betting.

 

[IrvinFixiMarkets]

From January 2018 new regulation rules will imply with FCA. I am not sure about leverage restriction, but for current moment anything above 1:400 is not quite legit. Even this level is for small amounts of money and normally it doesn't go beyond 1:200 level. If broker offers you higher leverage you need to look into his regulation, because many companies don't have it.

Always check company's license and not on their website, check with the respective regulatory body

 

[Addam]

A credit shoulder is a matter of one's personal preferences, some prefer 1:100, others 1:500, it all depends on the person. I hear about new limitations for the first time.

 

[Clay Davidson]

Restrictions are good.
Only this keeps this business afloat.
And it keeps traders from making stupid decisions.

 

[MoBest]

Restrictions are good.
Only this keeps this business afloat.
And it keeps traders from making stupid decisions.

I can't agree with you at all.