Important new measures for all retail clients

The European Securities and Markets Authority (ESMA), has formally adopted new measures on the provision of contracts for differences(CFDs) to retail investors in order to offer a tighter protection to retail traders.

For further information, click here.

When will the changes that will affect retail traders come into effect?

The relevant measures will start to apply from 1st of August 2018 for CFDs.

Important new measures for all retail clients

What are the new rules?

The restrictions that will impact your trading include:

  • Leverage limits on the opening of a position by a retail client from 30:1 to 2:1, which vary according to the volatility of the underlying:
    • 30:1 for major currency pairs;
    • 20:1 for non-major currency pairs, gold and major indices;
    • 10:1 for commodities other than gold and non-major equity indices;
    • 5:1 for individual equities;
    • 2:1 for cryptocurrencies.
  • A margin closeout rule on a per account basis, at 50% of the minimum required margin.
  • Negative balance protection on a per account basis, providing a guaranteed limit that your balance will not drop below zero.
  • Restriction of incentives offered to clients.
  • Standardized risk warning.

What do I need to do?

As a Retail Client please note that these rules will not immediately impact your trading but you need to be aware and adapt your activities in the coming months, in particular to the change in leverage that will apply to your account; you may need to add funds to your account to keep your positions open or wind down your positions.

Traders Trust will adopt all of these new measures by the due date, as they are applicable to all margin trading providers within Europe. We’ll be sure to keep you updated as the due date approaches, and as always, we’re here to help you with this change.

If you wish to find out more about your categorization as a Retail Client and the protections you have please get in touch.

Note: The above restrictions will not apply to Professional Clients, however, please be aware that being classified as a Professional means you will forfeit some protections that presently cover Retail traders.