Are you looking for the best Forex Brokers that are under No ESMA regulations? This may be because you’d like to understand if there are brokers that can still let you use a higher leverage?
We can help you.
Starting from August 2018, the new ESMA (European Securities and Markets Authority) came into effect.
It was hardly something new for the retail investor, as Forex brokers made sure to communicate the changes well ahead.
However, it opened the question of where to find Forex brokers with no ESMA regulation?
Are there such brokers?
Before anything, traders need to know that the new ESMA rules are meant to protect the trader. Many believe that the SNB (Swiss National Bank) dropping the 1.20 peg on the EURCHF pair in early 2015 sparked the idea.
As it turned out, the unprecedented event almost destroyed the Forex retail business. Some brokers went bust, many retail traders lost much more than the balance in their trading account, and the only solution was for brokers to cover the negative balances.
Healing took time, and authorities stepped in. Under the new ESMA rules, for instance, brokers offer negative balance protection. In plain English, the trader can’t lose more than the trading account’s balance. Not bad!
Leverage is limited too. Up to 1:30 in most cases, and higher only if the retail trader falls into the category of “professional retail traders”. Judging by the conditions needed to fit into this category, professional retail traders are probably somewhere in the lower single digits of all active traders.
In any case, the limitations aren’t bad for the trader. Aimed at protecting the trading account, they help in the money management process.
However, the drawback is that traders subject to ESMA regulation can’t make the most of their deposited funds. While the risk is lower, so is the potential return.
In the end, it is up to everyone to decide if the new ESMA regulations impacts their trading results positively or negatively. Our job here is to show what brokers to consider when you need or want to avoid ESMA regulations.
Keep in mind though, that they are subject to ESMA.
The only difference is that they manage to open the users accounts in non-European locations, thus applying the regulation from the place the account is open.
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Is it possible to avoid ESMA rules?
Yes, as we have outlined briefly above, the answer here is that it may be possible to avoid ESMA rules in a couple of cases. These situations are as follows:
- If you are a professional trader then you can avoid ESMA regulations. You will have to satisfy some quite stringent requirements in relation to your portfolio value, trading volume, or industry experience, two out of three. But, if you do, then most brokers offer accounts to professional traders that are not bound under ESMA regulation. This likely means increased leverage up to 500:1 depending on the broker, and no need for negative balance protection.
- If you are a European retail trader residing outside the EU, then you may be able to apply to open your account in another jurisdiction which does not fall under the ESMA regulations and instead under that of the local regulatory body.
In both of these cases, however, we simply suggest you checking out our article where we show the best brokers with high leverage.
Top 10 of Best Forex Brokers No ESMA of 2021
We will talk about bonuses and the max leverage available for every broker in this top 10.
If you are residing in a country overseen by ESMA, the max leverage available will be always 30:1 and there won’t be any deposit bonuses offered.
Here’s our ranking.