CySEC says "NO" to leverage 1:50 and introduces ESMA regulations

Hope dies last. 27 September Cypriot financial supervision, CySEC, published a communiqué regarding the regulations that will apply on the Forex market. Still at the end of May this year it was planned to introduce ESMA ideas extended to another category of customerswhich would have a leverage of 1: 50. It is now known that this idea has lost its relevance and product intervention in force since 1 August 2018, will remain unchanged.

1 maximum leverage: 30

The initial idea of ​​CySEC was to introduce three customer divisions - gray, positive and positive +. The biggest changes concerned the latter, which was to open the gate to the lever 1:50 on major currency pairs (there is 1: 30), 1:30 for other pairs and stock indices (there is 1: 20), 1:20 for goods (it is 1: 10) and 1:10 dla CFD for shares (it is 1: 5).

The ideas of the Cypriot regulator, however, will not come into force, and CySEC itself has followed the recommendations of ESMA representatives, introducing permanently previously binding conditions in an unchanged form. This means that negative balance protection will be maintained, and bonuses and other incentives will still not be able to be used by Forex brokers.

CySEC comments:

"With reference to [the May consultation paper], which consulted with stakeholders on proposals for [Cypriot national product intervention measures], and for the avoidance of doubt, CySEC did not impose a risk-based approach to leverage limits."

The official CySEC message

The most favorable conditions in the EU are in ... Poland

Cyprus was one of the last countries that reported changes (or lack thereof) after the expiry of the ESMA 1 regulations on August 2019. Thus, it seems that in Poland currently trade conditions are the most liberal in the entire European Union. KNF, despite ESMA's unfavorable opinion, decided to introduce a new customer categorization and a simpler procedure for leverage greater than 1: 30.

Be sure to read: Experienced customer and 1 lever: 100. We're checking the procedure

This is definitely a favorable situation for Polish Forex brokers who will be more attractive to foreign competitors in the eyes of traders. Therefore, the decision taken by CySEC is even more surprising when there are more than 300 Forex / CFD brokers registered in Cyprus, while there are fewer in Poland than 10.