Australia's ASIC introduces leverage caps | Forex Factory

Options

Permalinks
Print Thread

Similar Threads

High leverage vs Low leverage 74 replies

IG Australia New Margin/Leverage 5 replies

High Leverage vs Low Leverage 21 replies

High Leverage vs Low Leverage 20 replies

Need nsa, fsa or asic regulated broker that accepts liberty reserve 4 replies

Australia's ASIC introduces leverage caps

  • #1
  • First Post: Oct 27, 2020 9:23am Oct 27, 2020 9:23am
The Australian financial regulator, the Australian Securities and Investments Commission (ASIC) followed the example of the EU regulator ESMA and the British regulator FCA and significantly tightened the rules that govern the sale of CFDs to trail clients.
ASIC capped the leverage at different levels for major and minor currency pairs, gold, major stocks market indexes, commodities, minor stocks market indices, crypto assets and shares, introduced a negative balance protection, stop out level and also banned any and all trading bonuses and promotions.
The new leverage cap introduced in ASIC’s jurisdiction is actually exactly the same as EU’s ESMA leverage caps that were introduced last year:
-1:30 leverage cap for major currency pairs
-1:20 for minor currency pairs, gold, major stock market indexes,
-1:10 for commonodities and minor stock indices
-1:5 for stocks
-1:2 for crypto assets
Source (https://www.forexbrokerz.com/news/australias-asic-introduces-leverage-caps-along-with-new-cfd-rules)
I was wondering when they would do this, I would say they even took pretty long to follow suit after the EU.
  • #2
  • Nov 8, 2020 5:36pm Nov 8, 2020 5:36pm
Is this good or bad for traders? I guess ESMA, FCA and ASIC have good reasons to limit leverage, but I thought traders were always looking for the biggest leverage possible, am I right?
  • #3
  • Nov 15, 2020 4:32am Nov 15, 2020 4:32am
Will it affect offshore clients?
I will tear the world apart for you.
  • #4
  • Nov 15, 2020 7:09am Nov 15, 2020 7:09am
Quoting Barnell
Will it affect offshore clients?
It depends.

If you are a client outside Australia, but your account is regulated by ASIC, it will affect you.

However, if by offshore you mean that you live in Australia but your account regulator is FSA or any other than ASIC, then I think your are unaffected.

However, I'm worried that they may pass regulations banning local clients from using offshore brokers. I'm from Europe and I'm planning on using FSA regulation instead of CySec, because they offer more leverage and less commissions. But if the EU's ESMA imposes said ban, I would have to put up with it. I think they have this in USA, if I'm not mistaken.

Regards.
  • #5
  • Nov 15, 2020 8:53am Nov 15, 2020 8:53am
Quoting Javiervs
{quote} It depends. If you are a client outside Australia, but your account is regulated by ASIC, it will affect you. However, if by offshore you mean that you live in Australia but your account regulator is FSA or any other than ASIC, then I think your are unaffected. However, I'm worried that they may pass regulations banning local clients from using offshore brokers. I'm from Europe and I'm planning on using FSA regulation instead of CySec, because they offer more leverage and less commissions. But if the EU's ESMA imposes said ban, I would have...
Thanks. I have a Pepperstone account but I am living outside of Australia. I suppose my account is regulated by ASIC?
I will tear the world apart for you.
  • #6
  • Nov 15, 2020 1:36pm Nov 15, 2020 1:36pm
Quoting Barnell
{quote} Thanks. I have a Pepperstone account but I am living outside of Australia. I suppose my account is regulated by ASIC?
Your broker Pepperstone is regulated in Australia (ASIC), Dubai (DFSA), and UK (FCA). You will have to check which one do you have because it might be any of the three. You can just send an email to customer support and they will tell you.

If they change your conditions, however, your broker will notify you, probably by email.

Regards.
  • #7
  • Nov 15, 2020 1:41pm Nov 15, 2020 1:41pm
Quoting Javiervs
{quote} Your broker Pepperstone is regulated in Australia (ASIC), Dubai (DFSA), and UK (FCA). You will have to check which one do you have because it might be any of the three. You can just send an email to customer support and they will tell you. If they change your conditions, however, your broker will notify you, probably by email. Regards.
Thanks. I have a premium account with them, so I am expecting quality service.
I will tear the world apart for you.
  • #8
  • Nov 17, 2020 12:44am Nov 17, 2020 12:44am
From my premium account manager:

Option 1: Prove that I am an AI.
Option 2: Sign a document to approve to be transferred to Pepperstone (some other country) whereby 1:500 is allowed. I will still be contacting the same managers who have been looking after my account however and in terms of daily operations nothing changes.

Dateline: 29 March 2021.

Cheers.
I will tear the world apart for you.
  • #9
  • Nov 18, 2020 12:11am Nov 18, 2020 12:11am
Quoting Barnell
From my premium account manager: Option 1: Prove that I am an AI. Option 2: Sign a document to approve to be transferred to Pepperstone (some other country) whereby 1:500 is allowed. I will still be contacting the same managers who have been looking after my account however and in terms of daily operations nothing changes. Dateline: 29 March 2021. Cheers.

What are the criteria for AI under the new ASIC guidelines?

I have a existing account with FP Markets under their ASIC and i believe if i have to continue with 1:500 leverage i must move my account to their offshore entity too. But will continue to have the same account managers and stuff.
  • #10
  • Nov 18, 2020 9:02am Nov 18, 2020 9:02am
Quoting IndiTrader90
{quote} What are the criteria for AI under the new ASIC guidelines? I have a existing account with FP Markets under their ASIC and i believe if i have to continue with 1:500 leverage i must move my account to their offshore entity too. But will continue to have the same account managers and stuff.
Prove you have an annual income of AUD 250,000 or assets of AUD 2.5million.

I will go with the latter. Much easier.
I will tear the world apart for you.
  • #11
  • Last Post: Nov 20, 2020 4:37am Nov 20, 2020 4:37am
What a joke. It's never been easier to trade Forex than now, the trends are long and the charts predictable. Sure a beginner can loose all their money, but 3 out of 4 small business fail in the first 5 years in Australia too (1 out of 3 in 12 months) ... should we ban small business ?

Anyway for those who do want to blow a few accounts worth in one night, there is the Crown Casino in Melbourne and the new one opening soon in Sydney .....

Feel sorry for the Aussie brokers, they already lost a bunch of clients when ASIC clamped down on PAMMs and now this ... many will move money off shore.
0 traders viewing now