Meanwhile, European regulators are progressing in their work on making ESMA regulations permanent.
FM
In the history of the contracts for differences (CFDs) retail market in Europe, August 1, 2018, will be remembered as an important date. On that fateful day, the ‘temporary’ product intervention of the European Securities and Markets Authority (ESMA) came into effect.
Since then, the maximum Leverage for retail clients cannot be higher than the maximum of 30:1. After focusing its efforts on retail clients profitability, the pan-European regulator is about to leave matters into the hands of national authorities.
Although no one expects the European regulator to suddenly abandon its product intervention powers, individual European Union member states are preparing permanent measures that are determined by the national regulators. While every country's watchdog can implement different rules or is simply planning to make the ESMA's measures permanent, the general rules that are governing the market at a European level are likely to remain intact in the coming years.
Finance Magnates decided to take a closer look at current trends among European regulators and the progress in their work on making ESMA regulations permanent in the newest Quarterly Industry Report. You can find the sneak peek of one of the key findings from the ESMA's measures effects below.
Profitability is Rising, as Traders Flee Offshore
European brokers are not required to report and publish accurate statistics on their clients' FX trading performance. However, aggregated statistics from the Polish market provide an estimation of the conditions on an EU-wide level. The data show that since the implementation of ESMA's product intervention measures, the average level of profitability of retail investors has increased noticeably.
In 2018, approximately 40 percent of Polish traders made a profit on the Forex market. With Q1 2019, this value reached a record level of 48 percent. In Q2 2018 (before the product intervention measures came into force) it was lower by ten percentage points.
Assuming that traders from other European countries are also performing in a similar way, the results mentioned above are certainly encouraging. That said, another trend in the industry is pointing to a different, more worrisome development stemming from ESMA's measures.
The product intervention allegedly forced an outflow among investors who are risk-hungry to offshore-based brokers outside the European Union. Australia, among others, turns out to be one of the most popular destinations.
The self-regulatory organization in Poland, the Chamber of Brokerage Houses, polled traders to see what impact the intervention had on their trading. According to the survey’s results, half of the respondents contemplated moving their trading accounts outside the EU.
According to Marek Wołos from the Chamber of Brokerage Houses, “ESMA rules have contributed to the migration of investors to countries outside the EU. The more active investor who is aware and experienced, accepting the increased risk in exchange for the opportunity to make high returns, moves. Such clients are unable to calibrate their strategies to the requirements imposed by the ESMA.”
National Regulators
According to several industry experts interviewed by Finance Magnates, the ESMA will cease to extend the product intervention measures this year, 12 months after it implemented those. This is causing an increasing number of national regulators to propose their own permanent changes. They are set to implement them within the next few months.
To get the full article and the bigger-picture perspective on the post ESMA reaction of FX/CFD industry, get our latest Quarterly Industry Report.
In the history of the contracts for differences (CFDs) retail market in Europe, August 1, 2018, will be remembered as an important date. On that fateful day, the ‘temporary’ product intervention of the European Securities and Markets Authority (ESMA) came into effect.
Since then, the maximum Leverage for retail clients cannot be higher than the maximum of 30:1. After focusing its efforts on retail clients profitability, the pan-European regulator is about to leave matters into the hands of national authorities.
Although no one expects the European regulator to suddenly abandon its product intervention powers, individual European Union member states are preparing permanent measures that are determined by the national regulators. While every country's watchdog can implement different rules or is simply planning to make the ESMA's measures permanent, the general rules that are governing the market at a European level are likely to remain intact in the coming years.
Finance Magnates decided to take a closer look at current trends among European regulators and the progress in their work on making ESMA regulations permanent in the newest Quarterly Industry Report. You can find the sneak peek of one of the key findings from the ESMA's measures effects below.
Profitability is Rising, as Traders Flee Offshore
European brokers are not required to report and publish accurate statistics on their clients' FX trading performance. However, aggregated statistics from the Polish market provide an estimation of the conditions on an EU-wide level. The data show that since the implementation of ESMA's product intervention measures, the average level of profitability of retail investors has increased noticeably.
In 2018, approximately 40 percent of Polish traders made a profit on the Forex market. With Q1 2019, this value reached a record level of 48 percent. In Q2 2018 (before the product intervention measures came into force) it was lower by ten percentage points.
Assuming that traders from other European countries are also performing in a similar way, the results mentioned above are certainly encouraging. That said, another trend in the industry is pointing to a different, more worrisome development stemming from ESMA's measures.
The product intervention allegedly forced an outflow among investors who are risk-hungry to offshore-based brokers outside the European Union. Australia, among others, turns out to be one of the most popular destinations.
The self-regulatory organization in Poland, the Chamber of Brokerage Houses, polled traders to see what impact the intervention had on their trading. According to the survey’s results, half of the respondents contemplated moving their trading accounts outside the EU.
According to Marek Wołos from the Chamber of Brokerage Houses, “ESMA rules have contributed to the migration of investors to countries outside the EU. The more active investor who is aware and experienced, accepting the increased risk in exchange for the opportunity to make high returns, moves. Such clients are unable to calibrate their strategies to the requirements imposed by the ESMA.”
National Regulators
According to several industry experts interviewed by Finance Magnates, the ESMA will cease to extend the product intervention measures this year, 12 months after it implemented those. This is causing an increasing number of national regulators to propose their own permanent changes. They are set to implement them within the next few months.
To get the full article and the bigger-picture perspective on the post ESMA reaction of FX/CFD industry, get our latest Quarterly Industry Report.
A graduate of the Warsaw School of Economics, Sylwester received an MA specializing in finance and banking. As Finance Magnates' research associate and STA certified analyst, he leaves no stone unturned. Sylwester is the previous minority partner of an NFA registered US forex broker, and since 2003, has participated in many forex projects.
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How FYNXT is Transforming Brokerages with Modular Tech | Executive Interview with Stephen Miles
How FYNXT is Transforming Brokerages with Modular Tech | Executive Interview with Stephen Miles
Join us for an exclusive interview with Stephen Miles, Chief Revenue Officer at FYNXT, recorded live at FMLS:25. In this conversation, Stephen breaks down how modular brokerage technology is driving growth, retention, and efficiency across the brokerage industry.
Learn how FYNXT's unified yet modular platform is giving brokers a competitive edge—powering faster onboarding, increased trading volumes, and dramatically improved IB performance.
🔑 What You'll Learn in This Video:
- The biggest challenges brokerages face going into 2026
- Why FYNXT’s modular platform is outperforming in-house builds
- How automation is transforming IB channels
- The real ROI: 11x LTV increases and reduced acquisition costs
👉 Don’t forget to like, comment, and subscribe.
#FYNXT #StephenMiles #FMLS2025 #BrokerageTechnology #ModularTech #FintechInterview #DigitalTransformation #FinancialMarkets #CROInterview #FintechInnovation #TradingTechnology #IndependentBrokers #FinanceLeaders
Join us for an exclusive interview with Stephen Miles, Chief Revenue Officer at FYNXT, recorded live at FMLS:25. In this conversation, Stephen breaks down how modular brokerage technology is driving growth, retention, and efficiency across the brokerage industry.
Learn how FYNXT's unified yet modular platform is giving brokers a competitive edge—powering faster onboarding, increased trading volumes, and dramatically improved IB performance.
🔑 What You'll Learn in This Video:
- The biggest challenges brokerages face going into 2026
- Why FYNXT’s modular platform is outperforming in-house builds
- How automation is transforming IB channels
- The real ROI: 11x LTV increases and reduced acquisition costs
👉 Don’t forget to like, comment, and subscribe.
#FYNXT #StephenMiles #FMLS2025 #BrokerageTechnology #ModularTech #FintechInterview #DigitalTransformation #FinancialMarkets #CROInterview #FintechInnovation #TradingTechnology #IndependentBrokers #FinanceLeaders
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Charlotte reflects on the Summit so far and talks about the culture inside fintech banks today. We look at the pressures that come with scaling, and how firms can hold onto the nimble approach that made them stand out early on.
We also cover the state of payments ahead of her appearance on the payments roundtable: the blockages financial firms face, the areas that still need fixing, and what a realistic solution looks like in 2026.
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We speak about market structure, the institutional view on liquidity, and the sharp rise of prop trading, a sector Drew has been commenting on in recent months. Drew explains why he once dismissed prop trading, why his view changed, and what he now thinks the model means for brokers, clients and risk managers.
We explore subscription-fee dependency, the high reneging rate, and the long-term challenge: how brokers can build a more stable and honest version of the model. Drew also talks about the traffic advantage standalone prop firms have built and why brokers may still win in the long run if they take the right approach.
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Ramanda also shares insights on regulator sandboxes, shifting expectations around accountability, and the current reality of MiCA licensing and passporting in Europe.
A concise look at where compliance, onboarding, and AI-driven processes are heading next.
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He closes with a clear message: fraud is scaling, and so must the tools that stop it.
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We start with Aydin’s view of the Summit and the challenges brokers face as fraud tactics grow more complex. He explains how firms can stay ahead through real-time signals, data patterns, and early-stage detection.
We also talk about AI training and why compliance teams often struggle to keep models accurate, fair, and aligned with regulatory expectations. Aydin breaks down what “good” AI training looks like inside a financial environment, including the importance of clean data, domain expertise, and human oversight.
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