Re: Australia’s 1:30 leverage: ASIC Announces Leverage Cap, Negative Balance Protection

#11
Yup exactly and entirely agree with that. I think it's great there is the downside protection but that probably should have been in place already (black swan insurance should be covered by the industry). The leverage thing is going to be big if it really does come into effect as written. On a side note, does anyone notice the negative coverage of retail traders on CNBC etc because of Robinhood? Kramer seems to think that because retail traders make money buying stocks in a bull market, then it's a bad thing. There are already enough barriers to entry, these kind of restrictions just make the table smaller. It is a lot easier to lose money in the markets than to make it but is that a reason to restrict access? Regulators should focus on the access being fair (retail traders having fair spreads etc etc) not deciding on who can access the markets by imposing capital restrictions.


Re: Australia’s 1:30 leverage: ASIC Announces Leverage Cap, Negative Balance Protection

#12
Nbats7979 wrote:
Sat Oct 24, 2020 4:51 pm
I have a feeling one of the brokers I use is migrating clients to its Singapore asia pacific desk. I'm not up on the regulation framework enough to know whether they will be able to offer higher leverage to clients based in Oz/NZ... I guess they think they can, otherwise why go to the trouble.
Singapore regulator MAS introduced a 5% margin requirement (1:20) last year and came into effect on 8th October 2019. Yes, with such leverage its hard, unless one has a proper system and a well-thought money management plan. IG, CMC, Oanda, CityIndix are on 5% for local residents.

https://sso.agc.gov.sg/SL-Supp/S668-2018

https://blog.moneysmart.sg/invest/new-r ... x-trading/

Re: Australia’s 1:30 leverage: ASIC Announces Leverage Cap, Negative Balance Protection

#14
mlawson71 wrote:
Sat Oct 24, 2020 2:23 am
The Australian financial regulator, the Australian Securities and Investments Commission (ASIC), announced a set of new regulatory rules

Thanks again for breaking the news to us Mlawson.

IG Markets are already informing their Australian clients about the changes. From March 29, 2021 Australian Forex traders will require $3,333 minimum account balance for a 1 Lot trade.

new-asic-forex-regulations-leverage-change-australia.jpg

What is the background to the new rules?

In August 2019, ASIC announced several proposals which, if adopted, would impact retail clients who trade CFDs.

On 23 October 2020, ASIC announced the final rules, which includes increases to the minimum margin requirements across all CFD markets. These changes will come into effect on 29 March 2021.

There are no immediate changes to your IG trading account.

The rules don't apply to traders who are classified as 'wholesale' and have qualified for Pro, that is, traders who fulfil specified wealth and experience criteria, and elect to be treated as 'wholesale'.

You can find out more about how ASIC’s rules will affect your CFD trading with us below.
new-asic-forex-regulation-minimum-balance-for-1-lot-trade.jpg
Download over 500+ Forex & Trading books from Forex-Station's Trader's Library.


Re: Australia’s 1:30 leverage: ASIC Announces Leverage Cap, Negative Balance Protection

#17
is anyone here with blueberry markets? they say they will transfer your account under a vanuatu jurisdiction if you want to maintain 500:1 leverage. I mean, there is nothing wrong with ASIC's new regulation as this is for the protection of the retail public but man oh man i would love to have 100:1 leverage still under ASIC regulation. ASIC in my opinion is a trustworthy regulatory body whereas i am skeptical about a vanuatu regulatory body. for those who have a big account, no problem there but for those who have a small account, it is a pain in the ass.

Re: Australia’s 1:30 leverage: ASIC Announces Leverage Cap, Negative Balance Protection

#18
sam50 wrote:
Mon Nov 30, 2020 4:08 pm
is anyone here with blueberry markets? they say they will transfer your account under a vanuatu jurisdiction if you want to maintain 500:1 leverage. I mean, there is nothing wrong with ASIC's new regulation as this is for the protection of the retail public but man oh man i would love to have 100:1 leverage still under ASIC regulation. ASIC in my opinion is a trustworthy regulatory body whereas i am skeptical about a vanuatu regulatory body. for those who have a big account, no problem there but for those who have a small account, it is a pain in the ass.
nope not with them but heard of dis broker............. sounds like it will work fine man............. but worst case 30:1 not too bad it is $3333 needed for 1 lot trade................... or $333 for 0.10 lots or $33 for 0.01
Contribution Inspector & GIF Animator at your service👮

ExclamationRe: Australia’s 1:30 leverage: ASIC Announces Leverage Cap, Negative Balance Protection

#19
Greetings Esteemed Forum Members :) ,

We all know that ASIC new regulations will be implemented in this coming 3 months (29th Marth 2021) which reduces the leverage of retail traders from a MAXIMUM of 1:500 to a MAXIMUM of 1:30. Of course, we know that this implementation is to help most retail traders (dumb money) from blowing their accounts but i'm pretty sure most members in this forum are the smart money - making full use (or less) of the current 1:500 leverage.

Generally, not only will the 1:30 leverage reduce our lot size tremendously, but this in return also reduces the scalability and profits in FX trading. To paint a picture for those who are unaware, trading 1 lot (after 29th March 2021) will require at least 3333$ in their account just to trade 1 lot. Comparing with the current 1:500 leverage where only 200$ is required to trade 1 lot. 3333$/200$=16.65. This will mean you have to churn out 16.65 times more capital just to trade 1 lot. And the next question is, would you even park a larger sum of money in your broker just to trade your original lot size prior to the new ASIC regulation?

If you have been trading under a regulated ASIC broker, what is your next move? Would you compromise and search for other less regulated brokers (i.e FSC/IFSC etc) other than ASIC? Or would you be happy to put in the 16.65 times more capital into your current broker to maintain your lot size to lock in the same profits


Fellow members of forex-station, do share your thoughts and discussion/ suggestions as I believe this thread maybe useful to those who foresee the same problem arising from this new regulation.

-Zyzel


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