If you signed up with a European broker in 2026, the offer you saw was shaped by a single regulatory decision from August 2018: ESMA Decision 2018/796. The decision was scheduled to expire after three months and has been renewed continuously since. It is the reason your major-pair leverage tops out at 1:30, your stop-out happens at 50% margin, and every marketing email ends with a sentence telling you what percentage of retail CFD accounts lose money at that broker.
The five constraints that still apply
- Leverage caps: 1:30 majors, 1:20 minors and gold, 1:10 commodities, 1:5 stock indices, 1:2 crypto.
- Margin-close-out at 50% of initial margin — no opt-out.
- Negative-balance protection at the account level. Brokers absorb the gap risk.
- No bonuses or other inducements tied to trading volume.
- A standardised risk warning, including a broker-specific retail-loss percentage refreshed quarterly.
What changed since 2018
Three things worth knowing. First, the retail-loss percentage that has to appear on every CFD ad has hovered around 70–80% for the entire window; brokers that publish lower numbers are usually netting out professional clients (who are exempt from the warning), not retail ones. Second, the categorisation rules for professional clients tightened — getting reclassified as elective-professional requires meeting two of three substantive criteria (trade frequency, portfolio size, work history), not three soft ones. Third, the UK's FCA mirrors the ESMA caps so a Brexit-era switch buys you nothing on leverage.
On crypto and offshore brokers
Crypto CFDs at 1:2 sound restrictive next to the 1:100+ that offshore brokers advertise. The trade-off is regulatory recourse. If a regulated EU broker mis-fills your order, you can complain to the broker's national regulator and, ultimately, the broker's national investor compensation scheme. With an offshore broker, that recourse path doesn't exist. Most experienced traders run the regulated account and accept the leverage, then use a separate, smaller offshore account for anything genuinely speculative.
How this shapes a signal-routing setup
If you're routing third-party signals to a regulated broker, two practical implications. First, position-sizing has to respect the leverage cap; if a signal says "buy 5 lots EURUSD" on a €5 000 account, the order will be rejected for insufficient margin and most copy-trading tools will simply log the rejection and move on. PipSync's risk engine treats a rejected order as a hard error and pauses the source so you find out. Second, the 50% margin-close-out means a basket of correlated trades — say a Telegram channel pushing four EUR pairs at once — can liquidate the whole basket at the broker's discretion. Server-side risk caps need to model the basket, not just per-trade risk.
If you want the canonical text, ESMA's product-intervention page on cfds at esma.europa.eu still hosts the original decision and every renewal opinion.