Prop trading in Europe. MiFID regulations and what awaits traders?

ESMA takes on prop trading

The European Securities and Markets Authority (ESMA) has announced plans to harmonize regulations for prop trading firms across the EU.

What will change?

1. Mandatory registration - prop firms will need to obtain licenses in EU countries
2. Consumer protection - required risk disclosure, transparent rules
3. KYC/AML - standards matching regulated brokers
4. Fund segregation - protection of trader deposits

Market impact

Smaller firms without resources to obtain licenses may disappear. Major players (FTMO, BrightFunded) are already preparing for regulation.

What it means for European traders

Traders can expect:

• Greater security
• Potentially higher costs (firms pass on licensing costs)
• Fewer firm choices (market consolidation)

The key is choosing firms that already operate transparently and have a payout track record. At PropGate, we work exclusively with such firms.