How to become a professional client to retain your current margin rates.
The European Securities and Markets Authority (ESMA) announced its decision to implement intervention measures which include restricting leverage available to retail clients to between 30:1 and 2:1, according to the volatility of the underlying asset traded. The ESMA deadline for the implementation of these changes is on 1st of August 2018.
The table below illustrates the impact on leverage afforded to retail vs professional clients. The new ESMA restrictions will not apply to professional clients.
|Asset||Professional Client||Retail Client||Margin Increase|
|Major FX Pairs||200:1||30:1||7x|
To qualify as a Professional Client, you need to meet 2 of these three criteria below:
Check your eligibility to become a Professional Client:
Trade size & volume:
- You have carried out transactions, in significant size, on the relevant market at an average frequency of 10 per quarter over the previous 4 quarters.*
Size of portfolio:
- The size of your financial instrument portfolio, defined as including cash deposits AND financial instruments, exceeds EUR 500,000.**
- You work or have worked in the financial sector for at least one year in a professional position, which requires knowledge of the transaction or services envisaged.
How to keep your current margin options by applying for Professional Client status today.
How to apply for Professional Status
|1.CHECK YOUR ELIGIBILITY
To qualify, meet the professional client eligibility criteria.
|2.COMPLETE YOUR APPLICATION
Apply quickly and easily with our simple online application form.
|3.BECOME A PROFESSIONAL
Once approved, retain current margin rates.
Please read the following information carefully before applying for professional client status:
We are not obliged to offer the following to Professional Clients but have elected to continue doing so:
- Client money remains segregated from our funds and will be unaffected in the event of our insolvency,
- Best Execution remains unchanged as we owe all our clients a duty of best execution,
- The detail of Trade Confirmations remains unchanged and are sent by the end of the first business day following the execution of the trade, or earlier,
- Key Information Documents remain available to you,
- Negative Balance Protection.
As a professional client, you will lose the following protections:
- Our communications, including more information regarding the financial instruments and of the risks relating to these, information on the company itself, its services and any investments and costs, commissions, fees and charges of transactions, will not be subject to all the retail regulatory requirements,
- The eligibility for the compensation from the Investor Compensation Fund.
*Significant size trades are classified as having concluded transactions with an equivalent value of Eur25,000 per transaction in the case of non-leveraged transactions (equities) or a nominal value of Eur100,000 per transaction on forex, bonds and commodities, Eur50,000 on indices, Eur10,000 on single stock CFDs in the case of leveraged transactions.
**(Acceptable examples of savings and investments: Cash savings, stock portfolio, stocks and shares ISA, trading accounts, mutual funds, SIPP (excluding non-financial instruments). Unacceptable examples of savings and investments: Company pension, non-tradeable assets, property, luxury cars, jewellery.)