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#1 03-12-2016 22:33:50

johnedward
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From: Paris - France
Registered: 21-12-2009
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New CySEC directive: default leverage of 1:50 for forex and CFDs

New CySEC directive: default leverage of 1:50 for forex and CFDs


http://www.forex-central.net/forum/userimages/2014-cysec.jpg


The Cyprus Securities and Exchange has issued a new circular which introduces some changes that are in line with the new rules of the European Securities and Markets Authority (ESMA) regarding the supply of CFDs and other speculative products to retail investors in connection with the MiFID.

Since the middle of October, brokers operating across Europe no longer have the right to use bonuses related to one's trading activity. CySEC has informed Cypriot investment companies (CIF) regarding this issue and it argues that the practice exposes investors to unnecessary risks.

CySEC said in a statement: "CIFs have already thoroughly evaluated the new ESMA rules and have taken or are taking appropriate measures to operate in accordance with the new rules."

Demetra Kalogerou, President of CySEC, explained that companies do not always act in the best interests of their clients, a practice she described as "unacceptable" in a press release.

Default leverage at 1:50

Another important point in the circular that has been sent to the industry's companies regards the leverage offered to customers. The default leverage for new clients will now be set at 1:50.

This new requirement is not a ceiling on leverage. Clients who explicitly request higher leverage will have to take an aptitude test to determine if they are able to trade with lower margin requirements.

Companies will also be required to comply with MiFID regulations on one-day withdrawal requests. Only applications received outside office hours can be processed the next day.

Forex brokers have until 30 January 2017 to implement all of these necessary changes, they will also have to get existing customers to pass the ESMA test to determine the leverage of their accounts.


"Anything worth having is worth going for - all the way." - J.R. Ewing

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