ESMA is the European Securities and Markets Authority, a European Union financial regulatory agency. It is located in Paris, France. ESMA’s mission is to enhance investor protection and promote stable and orderly financial markets in the European Union.
Regulation
ESMA is responsible for regulating the financial markets in the European Union, including the stock exchanges, banks, and investment firms. ESMA also works to prevent market abuse and promote market integrity. This helps to protect investors and ensure that they have access to accurate and up-to-date information.
ESMA & KIDs
In relation to key information documents, ESMA is responsible for ensuring that these documents are accurate and up-to-date. The organization also works to ensure that investors are provided with key information documents that are easy to understand.
CFDs
Due to the complexity of certain products, ESMA requires brokers to be transparent about how many traders lose money on for example contracts for difference (CFDs). The full disclaimer can be found below unaltered to any specific broker:
ESMA’s disclaimer on CFDs states that “CFDs are complex financial products that are traded on margin. Trading CFDs carries a high level of risk since leverage can work both to your advantage and disadvantage. As a result, CFDs may not be suitable for all investors. You should make sure that you understand all of the risks involved before trading CFDs. CFD trading may not be suitable for you if you are not a professional client. Please seek independent advice if necessary.”