ESMA in force

We inform you about the new regulation for Forex & CFD trading. The European Securities and Markets Authority (ESMA) has introduced new regulatory requirements and restrictions for Forex and CFD retail trading, that will affect all non-professional traders in European Union and is already in force.

We would like to inform you that measures will not apply to professional investors. For additional questions and what are the criteria for qualifying as a professional investor, you can contact us at info@varchev.com or at +44 20 3608 6256.

You can visit this link to apply for a Professional Client status.

What limitations include ESMA's decision on retail clients:

• Binary options (in force from July 2, 2018) - ban on trading with binary options for retail investors
• Contracts for Difference / FX & CFDs - New Margin Requirements (in force from July 30, 2018)

1. 1. Maximum leverage for opening a retail client position:
      • 30:1 for major currencies pairs: (margin requirement: 3.33%)
      • 20:1 for minor currency pairs, gold and major equity indices: (margin requirement 5%)
      • 10:1 for commodities other than gold and minor capital indices: (margin of 10%)
      • 5:1 for shares and other instruments: (margin 20%)
      • 2:1 for cryptocurrencies: (margin 50%)

This means that the maximum leverage will decrease significantly.

1. 1. Exclusion rule for margin position close - a new level for stop-out - 50%. Currently stop out is 30%.
2. 2. Protection against negative balance in an account. The maximum amount of funds the client may lose will be limited to the amount of funds available in the account.
3. 3. Limit incentives (bonus programs, cash backs, discounts, etc.) offered for CFD trading.
4. 4. A single way of alerting for existing risk, including determining the percentage of losses on retail investors' accounts with the Contractor for Differences.

The full message published on the FSC website can be found here.

Following the entry into force of the above restrictions for retail investors:

• • binary options at 0:00 on 02.07.2018.
  • CFD trading at 0:00 on 30.07.2018.

- The maximum permissible leverage will be reduced to the requirements above.

- Stop out the level for non-professional investors will rise to 50% from 30%.

Nearly all customers in the European Union are currently qualified as retail clients and trading conditions will be changed with the entry into force of new retail restrictions. These restrictions, however, will not apply if you qualify for professional investor. 

If you re-qualify as a professional trader, you will be able to keep current leverage up to 1:500 unchanged or use the other level of leverage that we offer.

To apply for reclassification to a professional client for which the above restrictions do not apply, you must apply for a professional trader status as soon as possible as there is a processing period for the applications and possible approval.

- If you do not wish to take advantage of the terms provided by the professional trader, after 30 July you can continue to trade under the new ESMA conditions mentioned above.

- After the new regulatory requirements are forced in action, if you remain a retail client, you need to check whether you have the required free margin to protect yourself from closing positions.

In case you do not have enough free margin to meet the new ESMA requirements, it is necessary:

Deposit the necessary funds by 29 July / Sunday /
or
Close some of the open positions until July 27 / Friday /

If you have additional questions, please do not hesitate to contact us at +44 20 3608 6256, live chat или на info@varchev.com

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