Broker No Esma: Is it legal? Are They Reliable? | The List Of The Best

Since 2018, in every EU country there has been a body that regulates and supervises access to and operations in financial markets: ESMA, which stands for European Financial Instruments and Markets Authority. So, within the context of European regulation, today we are going to analyze the broker no esma what it is, if it is legal or rather a trading scam.

First of all, we are to clarify that brokers with European licenses operate in trading under the rules in force on brokerage and on the variation of financial leverage in Europe which, for small investors, may turn out to have to invest more money at the beginning, which is why they are looking for a no esma broker, that is, one who does not have a European license.

Relying on a broker

Relying on a financial broker to operate on the trading markets and make investments in the stock market may seem simple, but in reality it is not at all because there are many brokers around who pretend to be such and in the end they are illegal financial operators or scams.

European licensed broker

In Italy, the National Commission for Companies and the Stock Exchange, or CONSOB, is the body that controls and supervises the markets, therefore, a broker with a CONSOB license is an ESMA broker and therefore means reliability.

Non-European licensed broker

On the other hand, there are non-European brokers with valid licenses issued in a non-EU country, which provide clients with retail financial services.

In theory, no esma brokers cannot contact clients resident in Europe, the opposite can be done, a European client could request the services of a no esma broker to operate on trading, as long as he can declare everything fiscally.

You should be aware that in choosing a European broker you run into limited leverage and prohibition in trading with binary options.

But when you put yourself in the hands of a no esma broker, you have to be very careful to avoid nasty surprises.

Broker no esma what is it?

A non-European forex broker is a financial intermediary operating outside the EU borders.

If it is a licensed broker not belonging to the Eurozone, that is, with a valid license (even if not European), it can make investments in online trading on behalf of third parties (they offer retail financial services).

Therefore, it is easy to understand that a no esma forex broker does not have an office in the European Union and therefore is not subject to comply with ESMA regulations, as it is not European.

Why choose a no esma broker?

A no esma broker is like any other ordinary broker, unlike it does not have a financial broker license issued by a eurozone country which is under the association that monitors operations in European financial markets: European Securities and Markets Authority (ESMA) .

CFD leverage

Those who turn to a no esma broker do so mainly to take advantage of the advantage of having a higher (more convenient) leverage to trade CFDs, that is, a higher ratio. For example:

If with an esma broker to speculate in the markets with CFDs (contract for difference), the forex trading leverage is 1:30; instead with a no esma broker the cfd leverage can go up to 1: 500 (exceeding what an esma broker offers)
Therefore, a more profitable change in leverage is evident in online trading with a broker outside the EU.

Binary Options

In a nutshell, investors who choose the services of a broker outside ESMA want to ride the limitations imposed by the European Financial Instruments and Markets Authority such as:

The imposition of a maximum leverage limit in trading with CFDs, applicable only to retail clients, not to professional traders
It made binary options illegal (prohibited in Europe) for retail clients and private investors who want to trade
On the other hand, for professional traders there are no limitations. This means that the services of brokers outside Europe are requested by clients regarding retail trading.

Financial asset

The European body has imposed other prohibitions regarding the retail supply of certain financial derivative instruments for trading.

This means that if you trade with a non-European licensed broker, you can access a wide range of financial assets.

Broker no esma is it legal?

We remember first of all that a non-European broker is like a traditional broker with the only difference that the license obtained was not issued by a European country, and therefore does not follow the regulations of the European Financial Instruments and Markets Authority to realize brokers for financial transactions on behalf of third parties and private clients.

With this in mind, if a no esma broker is sure they have a legitimate and valid license legally issued by another non-EU country, that is, they turn out to be a legal broker, as they are under the jurisdiction of their country.

The only thing, as we mentioned earlier, is that by law a non-European broker cannot contact clients residing in the eurozone to offer its services.

Therefore they are seen as if they were illegal operators, which can be paradoxical since no esma brokers are not required to follow the rules of the European body in question.

Best brokers no esma

It should be borne in mind that a certain type of broker can be ESMA and NOT ESMA at the same time, as they can have a European and non-European license, and operate in both jurisdictions.

Among the best brokers no esma the following stand out:

  • FP Markets (First prudential markets), an Australian CFD and forex trading broker, based in Sydney
  • USGFX (United strategic group)
  • Pocket Option, an innovative trading platform for investing in binary options
  • eToro, a world famous broker that acts as a non-European broker and esma broker, operates in different markets, from the United States and Canada, passing to the European market (including Italy) and the Asian continent, has millions of eToro users and enjoys a good reputation
  • ActivTrades, ideal as a no esma CFD broker, with the advantage that it offers free trading training
  • TD Ameritrade and IC Markets, alternative options as a no esma forex broker

Finally, dear readers of Financial Empires, the retail client or investor who makes the choice to contact a broker does not commit any crime, it is enough only to make the respective tax returns of financial operations in online trading, but we advise you to have a good eye in knowing how to consciously choose this type of broker to make investments.

The Editorial Staff, Financial Empires



FINANCIAL EMPIRES is a web site magazine founded by Corrado Firera in 2021. The mag is focused on business, money and Investments topics. Our first purpose is to give you information and news. Please be sure to read our disclaimer policy.

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