ESMA has agreed a range of product intervention measures to restrict the provision
of CFDs (including rolling spot FX) to retail clients.
Apply for Professional Client status to ensure you are not affected.
The changes from ESMA are:
- Maximum leverage limits on new positions:
- 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 and other reference values
- 2:1 for Cryptocurrencies
- A standardised 50% margin close out rule on an account level basis
- Negative balance protection on an account level basis
- A prohibition on firms offering monetary and non-monetary benefits (excluding research and information tools)
- A standardised risk warning which includes firm specific figures on the percentage of client accounts that have lost money trading CFDs.
As yet, there is no official implementation date, but we expect the measures to be in place by early Q3 2018.
Meet 2 out of 3 criteria to qualify as a Professional Client
You need to have made an average of 10 significantly sized transactions per quarter over the last 4 quarters
You need to have a financial instrument portfolio, including cash deposits, exceeding EUR 500,000
You need to have worked in the financial sector in a professional position for at least a year, which requires knowledge of the transactions or services envisaged