Admiral Markets Australia Implements Negative Balance Policy

Negative balance protection is not a regulatory requirement for retail clients in Australia.

Admiral Markets Pty Ltd, the Australian subsidiary of Admiral Markets Group AS, announced on Friday that it has added a negative balance protection policy – despite it not being mandatory in Australian regulations.

In the European Union, thanks to regulation from the European Securities and Markets Authority (ESMA) contracts for difference (CFD) providers are required to limit the losses a retail client can sustain by imposing automated negative balance protection.

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Basically, it ensures that a trader doesn’t lose more money than the balance on their account. This is even in instances where the market moves quickly.

While this is now a requirement for retail brokers in Europe, it is not a requirement in Australia. Nonetheless, Admiral Markets has said that as of October 11, 2018, it will relieve clients of their repayment obligations should their balance fall below zero by returning the negative balance below zero.

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The Policy Will Be Applied At Admiral Markets’ Discretion

It should be noted that this will be done at the firm’s discretion – so it may not be applied in all applicable situations – and will only be available for balances ranging from zero to negative AU$100,000 ($71,086). According to the statement from the broker, the move aims to protect its clients from falling into debt due to unsuccessful trades.

Cristian Moreno, Admiral Markets Pty Ltd
Cristian Moreno

Commenting on the development, the CEO of Admiral Markets Pty Ltd., Cristian Moreno, said: “although negative balance protection is not an Australian regulatory requirement, we are proud to be leading the way with this initiative.”

“Our new negative balance policy will help give retail clients the peace of mind they need to trade confidently, and is just one of the ways we support our clients’ investment journey.”

Jens Chrzanowski, Admiral Markets Group AS
Jens Chrzanowski

The Co-CEO of Admiral Markets Group AS, Jens Chrzanowski, added: “as a global company, Admiral Markets feels that the success of our clients is paramount.”

“When our clients succeed, we succeed! Negative balance policies help ensure they have the best possible trading experience, and the entire Admiral Markets Group is proud to see the Australian subsidiary taking the initiative to voluntarily add this policy to their offering.”

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