With the objective of harmonising EU-wide regulation and providing better protection to retail clients trading leveraged products, the European Securities and Markets Authority (ESMA) has decided to adopt new measures regarding Contract for difference (CFD) and Forex (FX).
From 30 July 2018 there will be a number of changes to the way leveraged products like CFDs are offered to retail clients. These changes include:
- Limits on the amount of leverage offered to retail traders;
- Restricted access to certain products;
- Negative balance protection.
These changes do not affect professional clients!
|Initial and maintenance margin||NO||YES|
|Stocks as collateral||All stocks||Only stocks
in major stock indices
|Compensation from Investor Compensation Fund||NO||YES|
|If you are holding both a long and short position in the same instrument that will not net at end-of-day, the margin will now be calculated on the largest leg.||NO||YES|
|Negative balance protection||NO||YES|
Margin requirements for professional and retail clients:
|Professional clients||Retail clients|
|Major currency pairs||1.50%||3.33%|
|Minor currency pairs and gold||2.00%||5.00%|
|Commodities different than gold||minimum 2.00%||minimum 10.00%|
|Shares||minimum 10.00%||minimum 20.00%|
Additional information about margin requirements for different products can be found in the platform ELANA Global Trader in Account/Account/Other/New Trading Conditions.
The new ESMA regulations will apply only for retail clients. Clients categorised as profesional will continue the be subject to unchanged trading conditions. Professional clients must satisfy at least two out of three of the following criteria:
- You must have carried out transactions, in significant size, in a relevant product with an average frequency of at least 10 per quarter during the previous four quarters. Significant size refers to 100 000 EUR for Forex; 50 000 EUR for trading indices; 10 000 EUR for trading CFD’s on stocks.
- The size of your investment portfolio, defined as including cash deposits and financial instruments, exceeds 500 000 EUR.
- You work or have worked in the financial sector for at least one year in a professional position that requires knowledge of relevant products.
IMPORTANT! Professional clients are NOT subject to compensation from the Investor Compensation Fund. Each application for categorisation as a professional client will be reviewed separately!
If you wish to apply for a professional profile, please do not hesitate to contact us via phone +3592/81 000 95 or via e-mail at firstname.lastname@example.org.