Afterwards, they must sign a waiver, declaring that they understand and are aware of the measures of protection they are losing with their status change. Traders who wish to be classified as EPCs must first state their request in writing and provide documentation to support their claims.
So which traders can be classified as EPCs? ESMA’s classification demands involve three subjects: Trading Experience, Trading Knowledge and Portfolio Size.Īccording to ESMA, professional traders must satisfy at least two of the following three criteria: Following lengthy considerations, the regulator has settled on a number of key benchmarks that will safely define a trader as an Elective Professional Client, or EPC. In November of 2018, ESMA asked European brokers to supply data on the number of retail and professional clients with whom they traded CFDs. The question of who can be classified as a professional is one of the key issues that ESMA, and EU brokerages, have been wrestling with. This is an important piece of information for brokers, since many of their existing customers are considered professionals and they can continue to offer them the same trading conditions. The latter would still be able to trade CFDs with much higher leverages. These CFD restrictions only apply to “retail traders”, not to “professional traders”. It does not store any personal data.Since August 2018, regulated brokerages in Europe are no longer able to offer their clients high-risk leverage on CFDs, with restrictions ranging from 30:1 maximum for major Forex pairs, to no more than 2:1 for cryptocurrencies.īut ESMA did leave one exception in its regulatory structure. The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. The cookie is used to store the user consent for the cookies in the category "Performance". This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other. The cookies is used to store the user consent for the cookies in the category "Necessary". The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional". The cookie is used to store the user consent for the cookies in the category "Analytics".
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