CFD brokers
across Europe are preparing for new headwinds after the Cyprus Securities and
Exchange Commission (CySEC) rolled out on Friday fresh restrictions on leverage for
non-major commodity and index CFDs.
The tighter
margin rules, which set a cap at 10:1 leverage for selected products, mesh
Cyprus with stricter EU norms and signal a renewed push for investor protection
in the retail trading space.
With CySEC’s
latest directive now in force, brokers are recalibrating their product
offerings and internal compliance systems to steer retail clients toward more
traditional, liquid instruments, including gold, oil and major indices, where
leverage rules remain unchanged. The regulator’s move eliminates high-leverage
options for less popular and lower-liquidity CFDs, narrowing retail traders’
access to exotic assets.
Which
instruments are we talking about? The list includes, among others,
wheat, corn, coffee, and a wide range of other agricultural products. It also
covers industrial metals such as copper, aluminum, and platinum, which,
according to Finance Magnates Intelligence, were among the most popular
with traders in this niche; however, they still account for only a small fraction of total CFD commodity volumes. From the index category, these include regional market indices
from Italy, France, Spain, as well as emerging markets. Overall, the industry
does not expect a dramatic shake-up.
“CySEC’s
new restrictions don’t really change the market in any fundamental way,” said
Alex Tsepaev, Chief Strategy Officer of B2PRIME Group. “In practice, what the
regulator has done is tighten the rules around non-major commodities. These
products can no longer be classified under the same conditions as major ones,
which means margin requirements for less popular instruments with lower liquidity
will now be much stricter.”
As he added,
brokers won’t be able to offer exotic products with high leverage , which
regulators see as a growing risk. “Clients who want higher leverage will simply
migrate to more traditional instruments.”
The
consolidation of trading activity around major markets could have unintended
consequences for niche CFDs, which now face lower liquidity and the possibility
of more speculative or questionable trading behavior. Nevertheless, leading
brokers appear unfazed, pointing to robust demand for established products and
the gradual shift away from questionable practices.
Gold and Nothing Else
According
to data from Finance Magnates Intelligence, CFDs on metals accounted for
more than 60% of global broker volumes in the first half of 2025. However,
several points need to be emphasized. The vast majority, nearly 80%, came from
gold contracts, another 18% from silver, while only a marginal share was
attributed to other metals, let alone the rest of the commodities.
Moreover,
the breakdown varies by region. Since most broker turnover is currently
generated in Asia, including India, Thailand, and other markets, the statistics
are somewhat skewed, as trading in gold and precious metals is particularly
popular there. In Europe, by contrast, traders also turn to commodities, though
with considerably less enthusiasm.
Filip Kaczmarzyk, Head of Trading and Board Member of XTB, also shares Tsepaev’s view that the recent regulatory move will not significantly impact the market. “From a trading perspective, the impact is minimal,” he commented for FinanceMagnates.com. “The rules for the most popular and heavily traded instruments remain unchanged. The new regulations primarily affect less frequently selected, less liquid instruments; therefore, I don’t expect traders to seek out offshore providers.”
“It’s important to note that these
rules have already been implemented at the EU level, and major market players
like XTB are already compliant, so their business operations will not be
affected. I also do not anticipate any consolidation among EU-based providers
or other structural changes in the market. We do not expect traders to migrate
to offshore brokers, as the affected instruments are not among those that
traders actively pursue.”
Industry Consolidation
Will Accelerate
Executives
say the changes are way less disruptive than past regulatory overhauls, such as
ESMA’s
landmark intervention in 2018.
Tom
Higgins, CEO of Gold-i, believes the shakeout will ultimately benefit the
market’s integrity: “CySEC is adjusting policies to match the regulatory
‘norm’, which will actually encourage strong players to open in Cyprus, so I
see this as a good thing for the market. Good firms will adapt and poor firms
will leave and find another weak regulator or simply become un-regulated.”
Smaller
brokers with limited compliance capacity may struggle to meet the new
requirements, a development likely to accelerate consolidation among EU CFD
providers.
“Very small
players with few compliance staff may, indeed, suffer and go under, or sell
their client base to one of the big-boys. As an industry that is over-broked, I
am not sure this is a bad thing anyway,” Higgins added.
Retail
traders, meanwhile, face a choice: adjust their deposits to offset lower
leverage or seek new products and offshore alternatives. “This has been proven
in all the other regulatory regimes that have reduced leverage,” The Gold-i’s
CEO concluded.
Financial Sector Pushes
Toward Compliance
CySEC’s
overhaul doesn’t just target leverage; recent legal frameworks covering
sanctions enforcement and capital requirements are also raising the bar for
compliance across the sector.
Tajinder
Virk, CEO and Co-Founder of Finvasia, welcomed the directive, viewing it as
part of a broader regulatory response to “persistent concerns around
mis-selling and excessive leverage in the CFD space. There is a need for the industry to evolve and move beyond high-risk products.”
“Perhaps consolidation is around the corner. And this will give room to brokers grounded in trust, transparency, and long-term value. At Finvasia, we view this as a necessary correction that will strengthen the foundation of retail investments and dealing behavior in capital markets,” he added.
Brokers and
liquidity providers FinanceMagnates.com spoke to say the changes point to a
tougher, more resilient European financial infrastructure, with brokers
required to sharpen transaction monitoring and reporting systems.
Lower
leverage for specified assets, although less popular, enhanced scrutiny, and
stricter enforcement mean brokerages must invest in better risk controls while
client funds are protected by tighter regulatory standards.
In the
words of Tsepaev, “Stricter rules will help eliminate questionable practices
and push firms to be more compliant. As a result, the market will grow
more resilient.”
CFD brokers
across Europe are preparing for new headwinds after the Cyprus Securities and
Exchange Commission (CySEC) rolled out on Friday fresh restrictions on leverage for
non-major commodity and index CFDs.
The tighter
margin rules, which set a cap at 10:1 leverage for selected products, mesh
Cyprus with stricter EU norms and signal a renewed push for investor protection
in the retail trading space.
With CySEC’s
latest directive now in force, brokers are recalibrating their product
offerings and internal compliance systems to steer retail clients toward more
traditional, liquid instruments, including gold, oil and major indices, where
leverage rules remain unchanged. The regulator’s move eliminates high-leverage
options for less popular and lower-liquidity CFDs, narrowing retail traders’
access to exotic assets.
Which
instruments are we talking about? The list includes, among others,
wheat, corn, coffee, and a wide range of other agricultural products. It also
covers industrial metals such as copper, aluminum, and platinum, which,
according to Finance Magnates Intelligence, were among the most popular
with traders in this niche; however, they still account for only a small fraction of total CFD commodity volumes. From the index category, these include regional market indices
from Italy, France, Spain, as well as emerging markets. Overall, the industry
does not expect a dramatic shake-up.
“CySEC’s
new restrictions don’t really change the market in any fundamental way,” said
Alex Tsepaev, Chief Strategy Officer of B2PRIME Group. “In practice, what the
regulator has done is tighten the rules around non-major commodities. These
products can no longer be classified under the same conditions as major ones,
which means margin requirements for less popular instruments with lower liquidity
will now be much stricter.”
As he added,
brokers won’t be able to offer exotic products with high leverage , which
regulators see as a growing risk. “Clients who want higher leverage will simply
migrate to more traditional instruments.”
The
consolidation of trading activity around major markets could have unintended
consequences for niche CFDs, which now face lower liquidity and the possibility
of more speculative or questionable trading behavior. Nevertheless, leading
brokers appear unfazed, pointing to robust demand for established products and
the gradual shift away from questionable practices.
Gold and Nothing Else
According
to data from Finance Magnates Intelligence, CFDs on metals accounted for
more than 60% of global broker volumes in the first half of 2025. However,
several points need to be emphasized. The vast majority, nearly 80%, came from
gold contracts, another 18% from silver, while only a marginal share was
attributed to other metals, let alone the rest of the commodities.
Moreover,
the breakdown varies by region. Since most broker turnover is currently
generated in Asia, including India, Thailand, and other markets, the statistics
are somewhat skewed, as trading in gold and precious metals is particularly
popular there. In Europe, by contrast, traders also turn to commodities, though
with considerably less enthusiasm.
Filip Kaczmarzyk, Head of Trading and Board Member of XTB, also shares Tsepaev’s view that the recent regulatory move will not significantly impact the market. “From a trading perspective, the impact is minimal,” he commented for FinanceMagnates.com. “The rules for the most popular and heavily traded instruments remain unchanged. The new regulations primarily affect less frequently selected, less liquid instruments; therefore, I don’t expect traders to seek out offshore providers.”
“It’s important to note that these
rules have already been implemented at the EU level, and major market players
like XTB are already compliant, so their business operations will not be
affected. I also do not anticipate any consolidation among EU-based providers
or other structural changes in the market. We do not expect traders to migrate
to offshore brokers, as the affected instruments are not among those that
traders actively pursue.”
Industry Consolidation
Will Accelerate
Executives
say the changes are way less disruptive than past regulatory overhauls, such as
ESMA’s
landmark intervention in 2018.
Tom
Higgins, CEO of Gold-i, believes the shakeout will ultimately benefit the
market’s integrity: “CySEC is adjusting policies to match the regulatory
‘norm’, which will actually encourage strong players to open in Cyprus, so I
see this as a good thing for the market. Good firms will adapt and poor firms
will leave and find another weak regulator or simply become un-regulated.”
Smaller
brokers with limited compliance capacity may struggle to meet the new
requirements, a development likely to accelerate consolidation among EU CFD
providers.
“Very small
players with few compliance staff may, indeed, suffer and go under, or sell
their client base to one of the big-boys. As an industry that is over-broked, I
am not sure this is a bad thing anyway,” Higgins added.
Retail
traders, meanwhile, face a choice: adjust their deposits to offset lower
leverage or seek new products and offshore alternatives. “This has been proven
in all the other regulatory regimes that have reduced leverage,” The Gold-i’s
CEO concluded.
Financial Sector Pushes
Toward Compliance
CySEC’s
overhaul doesn’t just target leverage; recent legal frameworks covering
sanctions enforcement and capital requirements are also raising the bar for
compliance across the sector.
Tajinder
Virk, CEO and Co-Founder of Finvasia, welcomed the directive, viewing it as
part of a broader regulatory response to “persistent concerns around
mis-selling and excessive leverage in the CFD space. There is a need for the industry to evolve and move beyond high-risk products.”
“Perhaps consolidation is around the corner. And this will give room to brokers grounded in trust, transparency, and long-term value. At Finvasia, we view this as a necessary correction that will strengthen the foundation of retail investments and dealing behavior in capital markets,” he added.
Brokers and
liquidity providers FinanceMagnates.com spoke to say the changes point to a
tougher, more resilient European financial infrastructure, with brokers
required to sharpen transaction monitoring and reporting systems.
Lower
leverage for specified assets, although less popular, enhanced scrutiny, and
stricter enforcement mean brokerages must invest in better risk controls while
client funds are protected by tighter regulatory standards.
In the
words of Tsepaev, “Stricter rules will help eliminate questionable practices
and push firms to be more compliant. As a result, the market will grow
more resilient.”
