Edward Zachary D Johnson#97

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What is ESMA and its rules for traders?

The European Securities and Markets Authority (ESMA) is the financial regulator responsible for coordinating supervision across EU member states. In forex trading, ESMA introduced strict rules to protect retail investors, including a leverage cap of 1:30 for major currency pairs and lower limits for other assets. It also requires brokers to provide negative balance protection, ensuring clients cannot lose more than their deposits. ESMA prohibits aggressive bonus promotions and enforces clear risk disclosures. These rules aim to reduce losses from over-leverage and ensure fair market practices. While some traders dislike the lower leverage, ESMA regulation offers strong investor protection and transparency.