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ESMA



 

ESMA Regulations

The European Security and Markets Authority (ESMA) announced new regulation standards for leveraged trading, which will come into effect on Wednesday 1st August 2018. Please find all details about the regulations and how your trading activities will be affected on this page.

About ESMA

In the beginning of this year ESMA proposed major changes to leveraged trading, which has been intensely discussed within the industry. MFSA regulated brokers as well as their clients have been involved in the debate. In early May this year, ESMA announced the details about its new policy, which will come into effect on 1st August 2018. The key changes will be:

Please find ESMA’s proposed leverage changes for each product group in the table below:

Product Group

Maximum Leverage From
1 August 2018

Additional Margin Required
For Retail Clients

Major FX pairs

30:1

14x

Major Indices, Minor FX pairs, GOLD (XAUUSD)

20:1

5x

Commodities (excl. Gold) Minor Indices

10:1

10x

Cryptocurrencies

2:1

-

Bund

5:1

40x

Equities

5:1

4x

 

 

Negative Balance Protection

The new ESMA ruling will ensure that retail traders will not lose more than the money available on their account. If your retail trading account becomes negative, the provider (AKFX Financial Services) will now be required to bring the balance back up to zero. This rule will be applied on 1st August 2018 across all retail AKFX trading accounts.

AKFX’S Products Listed According to ESMA’s Product Categorization

Below you will find a non-exhaustive overview of AKFX’s product offering and their new leverage requirements. They are listed based on ESMA’s product groups.

Category

Foreign Exchange

Indicies

Bonds

Commodities

Crypto

Equities

Leverage

30:1

20:1

20:1

10:1

5:1

20:1

10:1

2:1

5:1

Sub-Category

Major FX

Minor FX

Major Indices

Minor Indices

Bonds

Commodities

Commodities

Crypto

Equities

Products

CADJPY

AUDCAD

CAC40

AEX25

BUND

GOLD

BRENT Futures

BTCEUR

UK Equities

CHFJPY

AUDCHF

JPN225

DXYSPOT

 

XAUUSD

BRENTSPOT

ETHEUR

US Equities

EURCAD

AUDHKD

AUS200

ESP35

 

 

COCOA

BTCUSD

DE Equities

EURCHF

AUDJPY

ESX50

HK50

 

 

COFFEE

ETHUSD

FR Equities

EURGBP

AUDNOK

DAX30 (Spot and Future)

HK-Shares

 

 

CORN Futures

DSHUSD

CH Equities

EURJPY

AUDNZD

NAS100 (Spot and Future)

SMI20

 

 

COTTON

LTCUSD

NL Equities

EURUSD

AUDSGD

SP500 (Spot and Future)

 

 

 

HGC (Copper) Futures

XRPUSD

PL Equities

GBPCAD

AUDUSD

UK100 (Spot and Future)

 

 

 

NG (Natural Gas) Futures

 

ES Equities

GBPCHF

CADHKD

WS30 (Spot and Future)

 

 

 

SILVER (Spot & Futures)

 

 

GBPJPY

CHFTRY

 

 

 

 

SOYBEAN Futures

 

 

GBPUSD

EURAUD

 

 

 

 

SUGAR

 

 

USDCAD

EURCNH

 

 

 

 

WTI Futures

 

 

USDCHF

EURCZK

 

 

 

 

WTISPOT

 

 

USDJPY

EURHKD

 

 

 

 

XAGUSD

 

 

 

EURNOK

 

 

 

 

 

 

 

 

EURNZD

 

 

 

 

 

 

 

 

EURPLN

 

 

 

 

 

 

 

 

EURSEK

 

 

 

 

 

 

 

 

EURSGD

 

 

 

 

 

 

 

 

EURTRY

 

 

 

 

 

 

 

 

GBPAUD

 

 

 

 

 

 

 

 

GBPCZK

 

 

 

 

 

 

 

 

GBPEUR

 

 

 

 

 

 

 

 

GBPHKD

 

 

 

 

 

 

 

 

GBPHUF

 

 

 

 

 

 

 

 

GBPNZD

 

 

 

 

 

 

 

 

GBPSEK

 

 

 

 

 

 

 

 

GBPSGD

 

 

 

 

 

 

 

 

GBPTRY

 

 

 

 

 

 

 

 

HKDSGD

 

 

 

 

 

 

 

 

NZDCAD

 

 

 

 

 

 

 

 

NZDCHF

 

 

 

 

 

 

 

 

NZDHKD

 

 

 

 

 

 

 

 

NZDJPY

 

 

 

 

 

 

 

 

NZDSGD

 

 

 

 

 

 

 

 

NZDUSD

 

 

 

 

 

 

 

 

USDCNH

 

 

 

 

 

 

 

 

USDCZK

 

 

 

 

 

 

 

 

USDHUF

 

 

 

 

 

 

 

 

USDNOK

 

 

 

 

 

 

 

 

USDPLN

 

 

 

 

 

 

 

 

USDSEK

 

 

 

 

 

 

 

 

USDSGD

 

 

 

 

 

 

 

 

USDTRY

 

 

 

 

 

 

 

 

How Will These Changes Affect Your Trading Activities?

Below we would like to provide you some trading examples, which will help you to understand the new ESMA rules better.

The required margin will increase across all products and you will need to add additional funds to your trading account or manage your open positions to avoid being closed out at market.

Working Examples For Clients Trading on FX/CFD Trading Accounts

FX/CFD Account

Product Group

Maximum Margin from 1 August 2018

Maximum Leverage from 1 August 2018

Additional Margin Required for Retail Clients

Product

Volume

New Leverage

Current Market Price*

Curent Margin

New Margin

Major FX Pairs

3.33%

30:1

14x

EURUSD

1 Lot

30:1

1.17466

EUR 250.00

EUR 3334.00

Major Indices

5%

20:1

5x

DAX30

5 Lot

20:1

12785.8

EUR 639.29

EUR 3196.45

Minor FX pairs

EURNZD

1 Lot

20:1

1.67345

EUR 500.00

EUR 5000.00

GOLD (XAUUSD)

GOLD

0.1 Lot

20:1

1298.2

USD 12.98

USD 64.92

Commodities (exd. Gold)

10%

10:1

10x

WTISPOT

3 Lot

10:1

65.88

USD 197.64

USD 1976.40

Minorindices

ESP35

10 Lot

10:1

9760.5

EUR 976.05

EUR 9760.50

Cryptocurrencies

50%

-

BTCUSD

0.1 Lot

2:1

2:1

6416.4

USD 320.82

USD 320.82

Equities

20%

5:1

4x

BPUK

20 Lot

5:1

589.11

GBP 589.11

GBP 2356.44

*Please note that this was the market price at the time the example has been generated.

AKFX Professional Clients

The new ESMA margin changes will not affect AKFX’s Professional Clients.

In order to find out more about the requirements to become an Elective Professional Client with AKFX, please contact us on admin@akfx.com.

 

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