FCA wants to introduce ESMA guidelines permanently

From July last year, restrictions on the Forex / CFD market introduced by the European Securities and Markets Authority (ESMA) began to apply in the European Union. One of the key changes was the reduction of financial leverage. Meanwhile, the British regulator plans to keep the regulations introduced by ESMA permanently after leaving the EU.

Guidelines in the European Union

Product intervention covered both the currency market and binary options (details: ESMA lowers the lever to 1: 30). The assumption was that the changes were to be temporary and apply for months by 3, however, the practice shows that they can stay with us permanently. There were no objections from the industry and the traders themselves. Negative effects of changes are beginning to be felt by European brokers in the form of a drop in volume (read: Decrease in the number of retail customers in the EU). ESMA seems to be unaffected.

Brexit and ESMA

The scenario of Great Britain leaving the European Union is getting closer to the previously assumed date. The British are scheduled to leave the Commonwealth on March 29 this year. However, this is only a "preliminary assumption", because doubts are growing instead of less and less. This builds growing anxiety about a possible agreement, or the lack of it, and the implementation of the so-called hard Brexit.

The Financial Conduct Authority (FCA), responsible for the supervision of the British financial market, decided that the guidance on CFD instruments introduced by ESMA was also temporarily implemented in the UK law. This means that if Britain leaves the EU, it will not allow local brokers to return to the pre-change offers.

In the FCA statement, we read:

"We are still preparing for a number of scenarios for the UK's withdrawal from the EU. This includes the scenario in which the United Kingdom leaves the EU on 29 March 2019, without the British Government and the EU agreeing on the withdrawal and implementation period. "

The British regulator also indicated that it plans to introduce ESMA guidelines permanently.