What are ESMA’s new requirements?

ESMA’s new requirements consist of reducing the available leverage limitations for Retail clients of financial organisations. The new limitations depend on the volatility of an underlying asset, and are the following:

Major Currency pairs - up to 1:30.
Non-major Currency pairs, Gold, major Indices - up to 1:20.
Commodities, other than Gold, non-major Indices - up to 1:10.
Other individual assets - up to 1:5.

According to ESMA's new requirements, apart from the changes relating to leverage limitations, financial organisations are obliged to provide Margin Call and Stop Out features on a per account basis, as well as Negative balance protection on a per account basis. They are also obliged to implement the standardised risk warning.