DislikedHi Jason could you tell me if FXCM in the UK is increasing their margin rates for spread betting (retail investors). IG has stated in july they are raising their margin rates due to ESMA rules 10X on indexes and various on others by a lot. You can by pass the rules if you have worked in the industry or have 500k sitting in investments somewhere.Ignored
Any broker that ultimately falls under ESMA supervision could potentially be impacted by the new leverage rules, that includes FXCM UK. Therefore FXCM UK will have to implement the same rules.
For anyone not familiar with what djxput is talking about, the European Securities and Markets Authority (ESMA) announced the following leverage rules on 27 March
Disliked...The product intervention measures ESMA has agreed under Article 40 of the Markets in Financial Instruments Regulation include:
1. Leverage limits on the opening of a position by a retail client from 30:1 to 2:1, which vary according to the volatility of the underlying:
- 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;
The full release can be found on ESMA's website here.
The new rules impact retail clients, and you are correct that if you can meet certain qualifications to be classified as a professional client, then you could 'by-pass' the rules. It should be noted that the new rules for the EU region do not impact FXCM Australia which is regulated by ASIC.
An official date for when rules will take place was not announced. Instead a general timeline was given:
DislikedESMA intends to adopt these measures in the official languages of the EU in the coming weeks, following which ESMA will publish an official notice on its website. The measures will then be published in the Official Journal of the EU (OJ) and will start to apply one month, for binary options, and two months, for CFDs, after their publication in the OJ.
So you're looking at at least a couple of months before changes would take place. That's all the information I have for you at the moment. We will have more information in the weeks ahead, and I will post it for you once it is available.