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ESMA MEASURES FOR RETAIL AND PROFESSIONAL CLIENTS

Following the decision of the European Securities and Markets Authority (ESMA) on the provision of Contracts for Differences, new trading terms will be applied to retail clients on November 1st 2018, for a temporary period of 3 months.

Understanding the new terms for Retail Clients

It may be hard to get your head around the new measures, wondering about how they will be affecting you. Please take a look at the possible benefits and costs that this ruling may have on your trading.

New Trading Rules
Leverage up to 1:30
Benefit

Increased protection of your funds. High leverage can amplify not only profits, but also losses. By implementing tighter leverage rules, your risk of loss is reduced.

Cost

Your margin requirements will be higher than those of Professional Clients and hence you must make sure that you have adequate funds in your account.

Margin close out level increases to 50%.
Benefit

A larger amount of your balance is protected from loss.

Cost

You must monitor your margin level closely and maintain it higher than 50% to avoid being negatively affected.

TRADE AS A RETAIL CLIENT

Trading CFDs involves signigicant risk of loss

Maximum Leverage per Asset Class that will apply from the 1st of November 2018 onwards for Retail Clients.

The measures are temporary and will be re-evaluated by ESMA after a 3-month period.

Instruments
Max.Leverage
Forex Majors
1:30
Forex Minors
1:20
Gold
1:20
Spot Major Indices
1:20
Spot Minor Indices
1:10
Other Spot Metals
1:10
Commodities
1:10
Cryptocurrencies
1:2
Shares
1:5
Terms for Professional Clients

Professional Clients gain exemption from all restrictions imposed by ESMA and can continue trading with Dynamic Leverage while keeping the same margin close out level as before.

Who is eligible to be classified as a Professional Client?

To be categorised as a Professional Client, you must fulfil 2 out of the 3 following criteria:

1.
You have carried out at least 10 significantly sized transactions per quarter over the last four quarters.
2.
Your financial portfolio, including cash deposits and financial instruments, exceeds EUR 500,000.
3.
You have professional experience working in the financial sector for at least one year in a position which requires knowledge of the transactions or services envisaged.

If you are trading as a Retail Client and wish to apply to be classified under the Professional Client category, please contact us.