The European Securities and Markets Authority (ESMA) no longer considers retail proprietary trading an immediate regulatory priority, according to George Theocharides, chairman of the Cyprus Securities and Exchange Commission (CySEC) and ESMA’s risk standing committee. Despite rapid global growth in the sector, ESMA is not engaged in substantive discussions on regulation at this time, marking a shift from increased scrutiny seen in recent years.

Theocharides noted the sector’s limited size as a reason for deprioritization, even as interest in retail prop trading rises sharply across major markets including the UK, US, and Germany. The business model, often operating in legal ambiguity due to firms positioning as educational rather than regulated financial entities, continues to expand commercially, with some firms acquiring brokerage licenses.

The landscape has recently been disrupted by platform changes and market exits, with around 14% of prop firms ceasing operations between 2024 and 2025. While regulatory developments progress more quickly in the US, Europe’s ESMA remains observant rather than actively pursuing immediate regulation—though growing market size or a major incident could prompt a policy response in the future.