Question: What's different between Retail and Professional Clients for ESMA's regulation?
Here are the main differences between ‘Retail Clients’ and ‘Professional Clients’.
| Retail Clients | Professional Clients | |
|---|---|---|
| Maximum leverage | Between 2:1 and 30:1 depending on the instrument |
Up to 500:1 depending on the instrument |
| Margin Close Out Rule | 50% of required margin | 20% of required margin |
| Negative Balance Protection | 〇 | 〇 |
| Continued eligibility to the Investor Compensation Fund |
〇 | × |
| Continued access to the Financial Ombudsman Service (as a ‘consumer’) |
〇 | 〇 |
| Continued segregation of your client funds | 〇 | 〇 |
| Broker will assume you have relevant knowledge & experience to understand the risks in trading |
× | 〇 |
| Broker may use advanced language (financial terms) when talking to you |
× | 〇 |
