On 1st August 2018, the European Securities and Markets Authority (ESMA), in exercising its right to impose measures under Art. 40 of Regulation (EU) No 600/2014 (MiFIR), introduces restrictions on trading in contracts for differences (CFDs) on a three monthly basis aimed towards providing greater protection of Retail Clients.
The regulations will result in changes to the trading conditions for both Retail Clients and Professional Clients.
The measures for Retail Clients are as follows:
Professional Clients are treated differently as they do not benefit from the protections provided for Retail Clients, but have access to increased leverage. A Retail Client who meets certain qualifying criteria can request to be categorised as a Professional Client and remain unaffected by these changes.
Trade Volume: Over the previous four quarters, you have carried out an average of 10 trades per quarter on the relevant market, in significant size.
Portfolio Size: The value of your investment portfolio, defined as including financial instruments and cash deposits, exceeds €500,000.
Professional Experience: You work or have worked in the financial sector for at least one year in a professional position that requires knowledge of the relevant transactions or services.
Note: To qualify as a Professional Client, you need to meet at least two of the three criteria above. We will assume that Professional Clients possess the relevant knowledge and experience levels and are aware of the risks associated with trading leveraged products.
The table below highlights the limits on leverage and account features for Retail Clients and Professional Clients:
| CFDs | Required Margin | |||
|---|---|---|---|---|
| Prior to 30 Jul 2018 | After 30 Jul 2018 | |||
| All Clients | Retail Clients | Professional Clients | ||
| Currencies | Major FX pairs1 | 0,5–1% | 3,33%2 | 0,5%2 |
| Minor FX pairs3 | 0,5–1% | 5% | 0,5% | |
| Precious Metals | Gold | 1% | 5% | 1% |
| Silver | 1% | 10% | 1% | |
| Shares | 5–100% | 20–100% | 5–100% | |
| ETFs | 5–100% | 20–100% | 5–100% | |
| Indices | Major Indices4 | 1% | 5% | 1% |
| Minor Indices5 | 1% | 10% | 1% | |
| Futures | Energy | 1-5% | 10% | 1–5% |
| Metals | 5% | 10% | 5% | |
| Agricultural | 5% | 10% | 5% | |
| Financial | 1% | 10% | 1% | |
| Dollar Index | 1% | 20% | 1% | |
| Cryptocurrencies | 25% | 50% | 25% | |
| Account Features | ||||
| 50% margin close out rule / close out level | / 0–80% | / 50%6 | / 50%7 | |
| Negative balance protection | ||||
| Eligible for compensation (Investor Compensation Fund) * Аpplies to retail clients |
* | |||
| Client Money remains segregated | ||||
| Best Execution | ||||
| Key Information Documents | ||||
| Monetary and non-monetary benefits | ||||
| Note: Under its General Terms of Business, Deltastock is entitled, at its own discretion, to change the amount of the minimum required Margin for any certain CFDs, as well as individual Orders and/or Positions or Client’s accounts. In case of such changes, Deltastock will notify the Client by email. | ||||
1 The following currency pairs: CAD/CHF, CAD/JPY, CHF/JPY, EUR/CAD, EUR/CHF, EUR/GBP, EUR/JPY, EUR/USD, GBP/CAD, GBP/CHF, GBP/JPY, GBP/USD, USD/CAD, USD/CHF, USD/JPY
2 No option for choice of different margin for currencies
3 The following currency pairs: AUD/CAD, AUD/CHF, AUD/JPY, AUD/NZD, AUD/USD, EUR/AUD, EUR/NZD, GBP/AUD, GBP/NZD, NZD/CAD, NZD/CHF, NZD/JPY, NZD/USD, EUR/CZK, EUR/DKK, EUR/HKD, EUR/HUF, EUR/MXN, EUR/NOK, EUR/PLN, EUR/SEK, EUR/SGD, EUR/ZAR, GBP/CZK, GBP/DKK, GBP/HKD, GBP/HUF, GBP/NOK, GBP/PLN, GBP/SEK, GBP/SGD, GBP/ZAR, HKD/JPY, SGD/HKD, SGD/JPY, USD/CZK, USD/DKK, USD/HKD, USD/HUF, USD/MXN, USD/NOK, USD/PLN, USD/SEK, USD/SGD, USD/ZAR
4 CFDs on Indices tracking a stock market index from one of the following stock market indices: UK100 Index-Tracker (UK100); EUFRANCE40 Index-Tracker (EUFRANCE40); EUGERMANY40 Index-Tracker (EUGERMANY40); US30 Index-Tracker (US30); US500 Index-Tracker (US500); USTECH100 Index-Tracker (USTECH100); JAPAN225 Index-Tracker (JAPAN225); AUSTRALIA200 Index-Tracker (AUSTRALIA200); EU50 Index Tracker (EU50) and all relevant mini indices
5 Index CFD tracking a stock market index which is not a major stock market index. EUGERMANYMID50 (EUGERMANYMID50 Index-Tracker); EUGERMANYTEC30 (EUGERMANYTEC30 Index-Tracker); EUHOLLAND25 (EUHOLLAND25 Index-Tracker); UITALY40 (EUITALY40 Index-Tracker); EUSPAIN35 (EUSPAIN35 Index-Tracker); HONGKONG33 (HONGKONG33 Index-Tracker); SWITZERLAND30 (SWITZERLAND30 Index-Tracker) and all relevant mini indices
6 Automatic position close out upon 50% shortage of margin on a client account basis. If the account balance drops below 50% of the required margin, client position/s will be closed automatically.
7 Automatic position close out upon 50% shortage of margin on a client account basis will also apply to Professional Clients.
The table below shows you how the margin levels will affect the collateral required for the positions when the changes take effect:
| Market | Trade Size (Units) | Opening Price1 | Required Margin | ||
|---|---|---|---|---|---|
| Prior to 30 Jul 2018 | After 30 Jul 2018 | ||||
| All Clients | Retail Clients | Professional Clients | |||
| EUR/USD | 10002 | €1.1550 | €5.00 (0.50%) | €33.30 (3.33%) | €5.00 (0.50%) |
| EUR/AUD | 10002 | €1.1550 | €5.00 (0.50%) | €50.00 (5.00%) | €5.00 (0.50%) |
| miniEUGERMANY40 | 1 | €1,200.00 | €12.00 (1.00%) | €60.00 (5.00%) | €12.00 (1.00%) |
| miniEUSPAIN35 | 1 | €1,100.00 | €11.00 (1.00%) | €110.00 (10.00%) | €11.00 (1.00%) |
| BMW/g | 10 | €80.00 | €40.00 (5.00%) | €160.00 (20.00%) | €40.00 (5.00%) |
| mini Bitcoin/USD | 1 | $800.00 | $200.00 (25%) | $400.00 (50%) | $200.00 (25%) |
1 The above CFD prices are for reference purposes only and do not reflect the current market situation.
2 Margin amount is calculated on 1000 units of the base currency.
Please don’t hesitate to get in touch with us should you have any questions about the ESMA regulations.
