August 1st, 2018 will be a day that is remembered in the European FX Market. This was the day when the European Securities and Markets Authority introduced their product intervention measures. Immediately, retail clients couldn’t leverage past the 30:1 maximum leverage. However, these temporary measures are now going to be left to national regulating authorities as the ESMA steps down as the main regulator Europe wide.
Most regulating authorities won’t dispose of the ESMA’s product intervention measures, with many regulators planning to make these measures permanent. Every national watchdog will be able to make their own guidelines in the coming weeks, which means different rules and regulations could be implemented across the European market. This has left the market at slight disarray, with retail clients and traders not sure with where the market is going.
Polish Trades Increasing
Polish traders and brokers aren’t required to publish any statistics regarding the trading performance of their clients. However, estimates from industry analysts indicate that the new conditions in the European Union has allowed for a dramatic rise in trading volumes within Poland. The average level of profitability for retail investors has risen by an average of 40% in the Forex Market. This is shocking considering that most countries in the Union has suffered as a result of the new product intervention measures implemented by the ESMA.
Polish Investing Profitability
These results are encouraging for any retail investor or trader in Poland. It points towards a positive trend that the market is once again growing to its previous heights. However, there are far less traders and retail investors in Poland now as a result of the ESMA. They’ve all moved to Australia, South Africa & other hotspots for Forex trading. So for the few brokers remaining in Poland, they’ve seen an increasing of trading.
According to a survey held by the Chamber of Brokerage Houses in Poland, 50% of all traders and retail investors have left the country. Mark Wolos, a CBH Representative spoke about this survey by saying, “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.”
ESMA Ending Product Intervention Measures this Year
By the end of 2019, product intervention measures will no longer be implemented by the European Securities and Exchange Commission. This could result in an influx of traders, retail clients and investors returning to the European Market.