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.
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.
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.
Sources
- LiquidityFinder — CFD leverage limits by regulator
- DailyForex — Maximum leverage in the US
- CompareForexBrokers — What is leverage in forex