Different clients could use between 20:1 and 50:1 on major forex pairs and between 10:1 and 30:1 on major indices
With the approach of the final deadline for EU-wide product intervention measures on July 30, 2019, national regulators are on track to implement their own product restrictions. The CySEC has so far refrained from announcing its views on the market until today, as the Cypriot regulator just issued an official stance on the matter.
In contrast to most national regulators, which have copied the ESMA’s product intervention measures and turned them into national rules, the CySEC is setting out into a new direction. The regulator is proposing a risk-based approach to leverage. Different clients with different experience levels will be tiered into different segments and able to use different leverage.
Meanwhile, binary options are confirmed by the CySEC to be completely banned from offer to retail clients under the proposed national measures.
Risk-Based Leverage Approach
The new approach on leverage under the CySEC’s proposal will be closely tied to the level of knowledge and risk-appetite of different retail clients. Each retail clients must be categorized by the brokers within a specific target market – either ‘positive’ or ‘negative.’
Retail clients who fall in the ‘grey’ area of the target market (those who fit neither within the positive target market nor the negative target market) could be vulnerable to being offered leverage that exceeds their knowledge, financial position, and risk appetite. Hence, the CySEC is proposing to introduce stricter leverage limits for those retail clients.
At the same time, for retail clients falling within the upper tier of the positive target market, the CySEC will be allowing slightly higher leverage limits. The levels for the customers classified in the standard tier of positive will be the same as ESMA's measures.
In order to classify for the upper ties, clients need to have either a gross annual income surpassing €40,000 or net liquid assets of at least €200,000.
Proposed leverage limits are based on the volatility of the underlying asset(s), and the knowledge, wealth, risk appetite, objectives, and needs of the respective retail client.
“Segmentation of the retail clients into three separate categories (plus retail clients falling within the negative target markets, who will not be allowed to be onboarded) will require careful CIF due diligence, onboarding, and client categorization processes,” the CySEC stated.
The regulator also proposes a prohibition of marketing, distribution, and sale of leveraged CFDs on crypto assets to retail clients. Only retail customers in the upper tier of the positive target market are proposed to be excluded from this measure designed to prevent exposure to the excessive risk caused by the extreme volatility of the Cryptocurrencies.
What Remains The Same
Aside from leverage, all clients will be protected from Negative Balance and will have their positions closed out automatically when their funds reach 50 percent of the margin required to maintain their positions.
All brokers will continue to be prohibited from providing any incentives that encourage clients to trade. Standardized clear risk warnings also remain mandatory, and firms will continue to display the percentages of clients making and losing money.
Client Protection
Highlighting the regulator’s efforts in tandem with the pan-European product intervention measures enforced since last year, the Chair of CySEC, Demetra Kalogerou, said that the standard and conduct of Cyprus Investment Firms when marketing, selling and distributing retail contracts for difference has increased significantly.
“Temporary product intervention measures set across Europe have supported CySEC’s own efforts to enhance investor protection. As this guidance is transposed into law alongside additional national measures and restrictions set by CySEC, our consultation with investors and the industry will provide an opportunity for feedback on what we see as the fundamental new rules of engagement.”
Further, Kalogerou highlighted that consumer demand for high risk, speculative trading products shows no sign of decreasing in Europe and Cyprus Investment Firms must continue reforming their business models to ensure investors are adequately protected.
Brokers and clients have two weeks to submit their comments on the proposed measures before the June 14.
With the approach of the final deadline for EU-wide product intervention measures on July 30, 2019, national regulators are on track to implement their own product restrictions. The CySEC has so far refrained from announcing its views on the market until today, as the Cypriot regulator just issued an official stance on the matter.
In contrast to most national regulators, which have copied the ESMA’s product intervention measures and turned them into national rules, the CySEC is setting out into a new direction. The regulator is proposing a risk-based approach to leverage. Different clients with different experience levels will be tiered into different segments and able to use different leverage.
Meanwhile, binary options are confirmed by the CySEC to be completely banned from offer to retail clients under the proposed national measures.
Risk-Based Leverage Approach
The new approach on leverage under the CySEC’s proposal will be closely tied to the level of knowledge and risk-appetite of different retail clients. Each retail clients must be categorized by the brokers within a specific target market – either ‘positive’ or ‘negative.’
Retail clients who fall in the ‘grey’ area of the target market (those who fit neither within the positive target market nor the negative target market) could be vulnerable to being offered leverage that exceeds their knowledge, financial position, and risk appetite. Hence, the CySEC is proposing to introduce stricter leverage limits for those retail clients.
At the same time, for retail clients falling within the upper tier of the positive target market, the CySEC will be allowing slightly higher leverage limits. The levels for the customers classified in the standard tier of positive will be the same as ESMA's measures.
In order to classify for the upper ties, clients need to have either a gross annual income surpassing €40,000 or net liquid assets of at least €200,000.
Proposed leverage limits are based on the volatility of the underlying asset(s), and the knowledge, wealth, risk appetite, objectives, and needs of the respective retail client.
“Segmentation of the retail clients into three separate categories (plus retail clients falling within the negative target markets, who will not be allowed to be onboarded) will require careful CIF due diligence, onboarding, and client categorization processes,” the CySEC stated.
The regulator also proposes a prohibition of marketing, distribution, and sale of leveraged CFDs on crypto assets to retail clients. Only retail customers in the upper tier of the positive target market are proposed to be excluded from this measure designed to prevent exposure to the excessive risk caused by the extreme volatility of the Cryptocurrencies.
What Remains The Same
Aside from leverage, all clients will be protected from Negative Balance and will have their positions closed out automatically when their funds reach 50 percent of the margin required to maintain their positions.
All brokers will continue to be prohibited from providing any incentives that encourage clients to trade. Standardized clear risk warnings also remain mandatory, and firms will continue to display the percentages of clients making and losing money.
Client Protection
Highlighting the regulator’s efforts in tandem with the pan-European product intervention measures enforced since last year, the Chair of CySEC, Demetra Kalogerou, said that the standard and conduct of Cyprus Investment Firms when marketing, selling and distributing retail contracts for difference has increased significantly.
“Temporary product intervention measures set across Europe have supported CySEC’s own efforts to enhance investor protection. As this guidance is transposed into law alongside additional national measures and restrictions set by CySEC, our consultation with investors and the industry will provide an opportunity for feedback on what we see as the fundamental new rules of engagement.”
Further, Kalogerou highlighted that consumer demand for high risk, speculative trading products shows no sign of decreasing in Europe and Cyprus Investment Firms must continue reforming their business models to ensure investors are adequately protected.
Brokers and clients have two weeks to submit their comments on the proposed measures before the June 14.
58% of UK Investors Choose Professional Guidance over 'Finfluencers’
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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