Leverage limits by regulator: why the same broker offers 30:1 here and 500:1 there
The caps in the EU, UK, Australia and the US — and what it means when a broker offers you far more than any of them allow.
The same broker will often show you one leverage figure and your neighbour in another country a completely different one. That is not a negotiating tactic; it is the regulator of whichever entity holds your account, and it is the single most useful thing to understand before comparing offers.
The caps for retail clients
| Regulator | Region | Major pairs | Non-major pairs |
|---|---|---|---|
| ESMA | European Union | 30:1 | 20:1 |
| FCA | United Kingdom | 30:1 | 20:1 |
| ASIC | Australia | 30:1 | 20:1 |
| NFA / CFTC | United States | 50:1 | 20:1 |
| CySEC | Cyprus (EU) | 30:1 | 20:1 |
Australia moved the furthest: ASIC cut retail leverage from as much as 500:1 down to 30:1 in March 2021 and has extended that order through May 2027. The UK kept caps close to ESMA’s after Brexit rather than diverging.
The full scale, not just currencies
The headline number applies to major currency pairs. Everything else sits lower, and the steps follow volatility rather than any judgement about how experienced you are. Under the ESMA measures adopted in March 2018, which the FCA and ASIC then mirrored:
| Instrument | Maximum leverage | Margin required |
|---|---|---|
| Major currency pairs | 30:1 | 3.33% |
| Non-major pairs, gold, major indices | 20:1 | 5% |
| Commodities other than gold, non-major indices | 10:1 | 10% |
| Individual shares | 5:1 | 20% |
| Cryptocurrencies | 2:1 | 50% |
A trader who checks only the forex figure and then opens a position on an individual share discovers the difference at the point of sizing the trade, which is a poor moment to find out.
Two rules that matter more than the cap
The leverage number gets the attention, but the same measures introduced two mechanics that do more to determine what happens to an account under stress.
Margin close-out at 50%. When account equity falls to half of the required initial margin, the broker must start closing positions. This is not discretionary and it is calculated per account rather than per position, so a winning trade can be closed alongside a losing one. Under offshore rules the trigger is set by the broker and is often lower, which sounds generous until it means positions run further into loss before anything stops them.
A ban on incentives. Bonuses, deposit matches and trading credits are prohibited for retail clients in the EU, the UK and Australia. When an offer of a 100% deposit bonus appears, it is coming from an entity outside those rules, and that fact alone tells you which company you would be contracting with.
Professional clients are treated separately. In the EU, UK and Australia a client who meets the criteria for professional classification can be offered far more, but that classification also strips away protections, including compensation-scheme access in some cases. It is not a formality to tick past.
Under MiFID II the elective professional test requires two of three conditions: a financial instrument portfolio above €500,000, an average of ten significant transactions per quarter over the previous four quarters, or at least a year working in the financial sector in a role requiring knowledge of these products. Brokers market the upgrade because it lifts the cap. What it also lifts is negative balance protection, the 50% close-out rule and, in some jurisdictions, eligibility for the compensation scheme.
Read the waiver the broker asks you to sign rather than the page advertising the higher leverage. They are rarely the same document.
Outside Europe the picture is not uniform
Most comparisons stop at the EU, UK, US and Australia, which leaves out the markets where a lot of readers actually open accounts.
| Regulator | Market | Major pairs | Notes |
|---|---|---|---|
| MAS | Singapore | 20:1 | stricter than the EU, which surprises people |
| CIRO | Canada | 50:1 | 20:1 minors, 5:1 single shares |
| DFSA | Dubai (DIFC) | 30:1 | 20:1 minors |
| SCA | UAE mainland | 50:1 | 20:1 minors, 10:1 commodities, 3:1 shares |
The UAE is the case worth stopping on. Two regulators operate in one country with different caps: a firm licensed by the DFSA inside the Dubai International Financial Centre works to 30:1, while a firm licensed by the SCA on the mainland can offer 50:1. Same city, same client, different number, depending entirely on which entity opens the account.
Canada attaches something the leverage figure does not show. Clients of CIRO members have access to the Canadian Investor Protection Fund, which covers eligible assets up to $1 million if the firm fails. That is a different kind of protection from a leverage cap, and it does not exist in most offshore jurisdictions at any level.
So how do brokers advertise 500:1 or 1000:1?
By serving you from an entity in a jurisdiction that does not impose those caps. A group may hold an FCA licence in London, an ASIC licence in Sydney, and a licence from an offshore regulator elsewhere, and the offshore entity is the one that can offer the high number.
This is legal and common. What matters is that the entity you actually contract with determines your protections, not the licence displayed most prominently on the homepage. A broker “regulated by the FCA” may hold your money in a different company entirely, under a regulator with no compensation scheme and limited enforcement.
When we check a broker, this is the first thing we look at: which entity takes the client, and which register that entity appears in. It is written into our methodology for that reason.
What high leverage actually changes
Leverage does not change how much you can lose in a bad move — it changes how little you need to deposit to be exposed to that move, and therefore how quickly a small adverse move wipes out the deposit.
At 30:1, a 3.3% move against you consumes the entire margin. At 500:1, 0.2% does it. Ordinary daily ranges in major pairs make the second figure an almost arithmetic guarantee of a margin call.
The regulators that imposed caps did so after publishing data on how retail accounts performed. Firms under ESMA rules must display the share of retail accounts losing money; the figures they publish typically sit between 70% and 80%.
Negative balance protection
Under ESMA, FCA and ASIC rules retail clients cannot lose more than their account balance: if a gap takes the position beyond zero, the broker absorbs it. Offshore entities frequently do not offer this, which means a weekend gap can leave you owing money rather than simply losing what you put in.
If you are comparing a regulated entity against an offshore one purely on the leverage number, this is the clause that should be in the comparison too.
What to check before you compare offers
The leverage figure on a homepage is the least informative number in the whole transaction. Four things sit behind it, and all four are checkable before you deposit.
Which entity will hold the account. The answer is in the client agreement, not on the landing page, and it decides everything else on this list. A group can hold FCA, ASIC and offshore licences at once; only one of them applies to you.
Whether negative balance protection applies to that entity. Not to the group, to the entity. This is the difference between losing your deposit and owing money after a weekend gap.
Where the close-out sits. Half of the required margin under EU, UK and Australian rules. Anything lower means positions run further before the broker intervenes.
What happens to the classification. If the broker offers to upgrade you to professional status, assume the protections above are what you are trading away, and confirm which ones in writing.
We record all four in every review, entity by entity rather than brand by brand, and where a broker will not say which company takes the client, that answer goes on the page as it stands. See the methodology.
Sources
- LiquidityFinder — CFD leverage limits by regulator
- DailyForex — Maximum leverage in the US
- ESMA — Product intervention measures on CFDs and binary options
- FCA — Statement on ESMA product intervention measures
- CompareForexBrokers — What is leverage in forex