Monetary Authority Of Singapore Scolds CMC Markets over Margin Rates
- The Singapore arm of CMC Markets has been reprimanded by the local regulator for failing to apply prescribed margin rates.
According to an announcement published by the Monetary Authority of Singapore (MAS), the overreaching arm of one of the strictest financial regulators in the world has reprimanded CMC Markets.
The MAS highlighted in its announcement that the Singapore arm of CMC Markets has committed violations in relation to the “Financial and Margin Requirements Margin Requirements A margin requirement is defined as the minimum equity sum that investors must keep in their margin account preceding a trading transaction. Margin requirements may be referred to as maintenance margin, minimum maintenance, or maintenance requirement. This is a requirement for broker trading in any asset class.In terms of equities, the New York Stock Exchange (NYSE) and Financial Industry Regulatory Authority (FINRA) have a fixed margin requirement of 25% of the sum value of the securities presen A margin requirement is defined as the minimum equity sum that investors must keep in their margin account preceding a trading transaction. Margin requirements may be referred to as maintenance margin, minimum maintenance, or maintenance requirement. This is a requirement for broker trading in any asset class.In terms of equities, the New York Stock Exchange (NYSE) and Financial Industry Regulatory Authority (FINRA) have a fixed margin requirement of 25% of the sum value of the securities presen Read this Term for Holders of Capital Markets Services Licenses Regulations."
CMC Markets has violated a requirement related to the appropriate margin requirements on certain contacts.
The mandatory minimum margin requirements for equity CFDs are 5% for indices, 10% for index stocks and 20% for other stocks. Alternatively, foreign Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term (FX) CFDs have a floor at 2%.
In addition, the regulatory framework that CMC Markets violated states that CFD contracts, which do not have a guaranteed stop loss, have to cover additional special requirements. The maximum loss that a customer may incur between the contract price and the stop-loss price may not surpass 30% of the minimum margin for the CFD position on account.
For CFDs that are with guaranteed stop loss the same amount totals to no more than 10%.
CMC Markets has failed to comply with the regulations mentioned above for one of its clients between the 12th of November, 2012 and the 17th of February, 2014. The MAS announcement doesn't specify which specific CFD trading margin the broker violated.
Looking at these new requirements, it would be interesting to see if there were CFD positions in the EUR/CHF pair at CMC Markets Singapore. In theory, regardless of whether the stop losses on client accounts were guaranteed or not, clients of the broker may dispute the outcomes if they have negative balances.
This would apply however, only if the clients of the broker were trading CFDs on spot FX rates.
According to an announcement published by the Monetary Authority of Singapore (MAS), the overreaching arm of one of the strictest financial regulators in the world has reprimanded CMC Markets.
The MAS highlighted in its announcement that the Singapore arm of CMC Markets has committed violations in relation to the “Financial and Margin Requirements Margin Requirements A margin requirement is defined as the minimum equity sum that investors must keep in their margin account preceding a trading transaction. Margin requirements may be referred to as maintenance margin, minimum maintenance, or maintenance requirement. This is a requirement for broker trading in any asset class.In terms of equities, the New York Stock Exchange (NYSE) and Financial Industry Regulatory Authority (FINRA) have a fixed margin requirement of 25% of the sum value of the securities presen A margin requirement is defined as the minimum equity sum that investors must keep in their margin account preceding a trading transaction. Margin requirements may be referred to as maintenance margin, minimum maintenance, or maintenance requirement. This is a requirement for broker trading in any asset class.In terms of equities, the New York Stock Exchange (NYSE) and Financial Industry Regulatory Authority (FINRA) have a fixed margin requirement of 25% of the sum value of the securities presen Read this Term for Holders of Capital Markets Services Licenses Regulations."
CMC Markets has violated a requirement related to the appropriate margin requirements on certain contacts.
The mandatory minimum margin requirements for equity CFDs are 5% for indices, 10% for index stocks and 20% for other stocks. Alternatively, foreign Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term (FX) CFDs have a floor at 2%.
In addition, the regulatory framework that CMC Markets violated states that CFD contracts, which do not have a guaranteed stop loss, have to cover additional special requirements. The maximum loss that a customer may incur between the contract price and the stop-loss price may not surpass 30% of the minimum margin for the CFD position on account.
For CFDs that are with guaranteed stop loss the same amount totals to no more than 10%.
CMC Markets has failed to comply with the regulations mentioned above for one of its clients between the 12th of November, 2012 and the 17th of February, 2014. The MAS announcement doesn't specify which specific CFD trading margin the broker violated.
Looking at these new requirements, it would be interesting to see if there were CFD positions in the EUR/CHF pair at CMC Markets Singapore. In theory, regardless of whether the stop losses on client accounts were guaranteed or not, clients of the broker may dispute the outcomes if they have negative balances.
This would apply however, only if the clients of the broker were trading CFDs on spot FX rates.