The Cyprus Securities and Exchange Commission (CySEC) has issued a circular to the Cyprus investment firms setting some new rules regarding trading bonuses, maximum default leverage and fund withdrawal processing terms. (https://smnweekly.com/2016/11/30/cysec-bans-trading-bonuses-sets-max-default-leverage-to-150/) In essence the new rules concern all forex and binary options brokers regulated by the CySEC.
In its circular the Cyprus regulator says that the brokers “must avoid the practice of offering bonuses that are designed to incentivise retail clients to trade in complex speculative products such as CFDs, binary options and rolling spot forex as it is unlikely that a firm offering such bonuses could demonstrate that it is acting honestly, fairly and professionally and in the best interests of its retail clients”.
CySEC notes that the brokers offering “excessive leverage” to retail clients are most likely not doing it in the best interest of the clients, hence from now on all forex and binary options brokers should design their trading systems to set as default a lower leverage and give them the option, if they wish, to change the leverage to a higher level. Further in its letter CySEC sets the maximum default leverage as 1:50.
They also added some new rules about money withdrawals.
In its circular the Cyprus regulator says that the brokers “must avoid the practice of offering bonuses that are designed to incentivise retail clients to trade in complex speculative products such as CFDs, binary options and rolling spot forex as it is unlikely that a firm offering such bonuses could demonstrate that it is acting honestly, fairly and professionally and in the best interests of its retail clients”.
CySEC notes that the brokers offering “excessive leverage” to retail clients are most likely not doing it in the best interest of the clients, hence from now on all forex and binary options brokers should design their trading systems to set as default a lower leverage and give them the option, if they wish, to change the leverage to a higher level. Further in its letter CySEC sets the maximum default leverage as 1:50.
They also added some new rules about money withdrawals.