Analysis: ESMA and the Professionalisation of the Retail Industry
A lengthy article published 4 days ago in Finance Magnates suggests that brokers in Europe are reacting to ESMA in two ways:
The minor trend: Brokers bailing out of Europe, and moving offshore
The major trend: Brokers re-focusing their businesses on traders classified as "professional", and de-emphasizing ordinary retail traders
Regarding that major trend, here is an excerpt from the article --
"The behaviour of brokers so far indicates that ESMA’s regulation has pushed them into focusing on wealthier, professional clients. This is illustrated by their focus on developing professional products over the past six months and their encouraging of specific, revenue-generating clients to reclassify as professional.
"Many in the industry have predicted that ESMA’s regulation will push out the smaller, less professional brokers but the same could be true for brokers’ clients. If those brokers no longer devote any energy to maintaining or onboarding clients that don’t qualify as professional traders, the number of truly ‘retail’ clients may shrink dramatically.
"That would mean we are left with only large brokers and professional traders. Is that still the retail industry? Perhaps, but certainly not as we once knew it."
Here is a LINK to the Finance Magnates article.