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FXCM UK Updates Negative Balance Policy to Include Only First $50,000

by Victor Golovtchenko
  • FXCM has just updated its master trading agreement to reflect the challenges associated with a negative balance protection policy for retail forex traders, now including "insurance" only on the first $50,000.
FXCM UK Updates Negative Balance Policy to Include Only First $50,000
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An announcement by FXCM UK reveals that after the Swiss National Bank’s move to scrap the floor under the EUR/CHF exchange rate, the company is revising its policy of Negative Balance protection. The master trader agreement to which all clients of the broker agree upon before opening their account will enjoy protection of up to $50,000.

Clients of FXCM UK can expect to receive further details regarding when the changes are expected to take effect. In a post SNB world, FXCM UK is the first broker to revise its negative balance protection policy. While many companies haven’t been offering this form of insurance for retail traders, FXCM has been widely advertising the feature before the SNB Black Swan .

Following is the updated version of the FXCM Provision in the Master Trading Agreement:

Clients subject to the Negative Balance Policy who incur negative balances in excess of US $50,000 (determined by aggregating all of the client's negative balances across all accounts held by FXCM and any of its affiliate(s), incurred over a 24 hour period of time) will be responsible for and owe FXCM the value of the total negative balance above US $50,000, regardless of market conditions. Subject to certain exceptions, FXCM will waive the first US $50,000 of a client's total negative balance (determined by aggregating all of the client's negative balances across all accounts held by the FXCM group, incurred over a 24 hour period of time). This policy will apply to negative balances incurred during all market conditions, including exceptional market movements. Specific Exceptions: Each client's master trading agreement will detail all of the specific exceptions to the Negative Balance Policy. Some of the key exceptions to this policy include the following: negative balances incurred by legal entities, omnibus relationships, white label relationships, Eligible Contract Participants, Eligible Counterparties and/or Professional Clients (as defined in the client's master trading agreement) and/or negative balances incurred on share CFD positions or products traded on an exchange.
rp_fxcm-logo-150x1501.jpg

An announcement by FXCM UK reveals that after the Swiss National Bank’s move to scrap the floor under the EUR/CHF exchange rate, the company is revising its policy of Negative Balance protection. The master trader agreement to which all clients of the broker agree upon before opening their account will enjoy protection of up to $50,000.

Clients of FXCM UK can expect to receive further details regarding when the changes are expected to take effect. In a post SNB world, FXCM UK is the first broker to revise its negative balance protection policy. While many companies haven’t been offering this form of insurance for retail traders, FXCM has been widely advertising the feature before the SNB Black Swan .

Following is the updated version of the FXCM Provision in the Master Trading Agreement:

Clients subject to the Negative Balance Policy who incur negative balances in excess of US $50,000 (determined by aggregating all of the client's negative balances across all accounts held by FXCM and any of its affiliate(s), incurred over a 24 hour period of time) will be responsible for and owe FXCM the value of the total negative balance above US $50,000, regardless of market conditions. Subject to certain exceptions, FXCM will waive the first US $50,000 of a client's total negative balance (determined by aggregating all of the client's negative balances across all accounts held by the FXCM group, incurred over a 24 hour period of time). This policy will apply to negative balances incurred during all market conditions, including exceptional market movements. Specific Exceptions: Each client's master trading agreement will detail all of the specific exceptions to the Negative Balance Policy. Some of the key exceptions to this policy include the following: negative balances incurred by legal entities, omnibus relationships, white label relationships, Eligible Contract Participants, Eligible Counterparties and/or Professional Clients (as defined in the client's master trading agreement) and/or negative balances incurred on share CFD positions or products traded on an exchange.
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