LCG at this stage won't say anything about what they're doing/not doing, or what ESMA's doing/not doing.
Have pressed them to respond to the ESMA consultation asap, make an announcement to clients and for most senior manager appropriate to get back to me on this.
Grrrrr.
Have pressed them to respond to the ESMA consultation asap, make an announcement to clients and for most senior manager appropriate to get back to me on this.
Grrrrr.
D
Dowser
I've just received this email from IG.......
Margin rates could increase to 5% on major indices and 20% on equities
Dear Mr. Brads
The European Securities and Markets Authority (ESMA) is considering some proposals which are highly likely to affect your trading. You have until 5 February to respond to ESMA, and we would strongly encourage you to do so. ESMA does listen to the views of traders and will shape its final decision according to the feedback it receives.
What are the proposals?
ESMA has come out with a number of proposals – aimed at retail clients only – to try to increase conduct standards across the industry. We largely support these changes, but feel the leverage restrictions are disproportionate and too restrictive. ESMA’s leverage proposals include:
● 30:1 leverage on major currency pairs = 3.33% margin
● 20:1 leverage on major indices = 5% margin
● 10:1 leverage on commodities (excluding gold) = 10% margin
● 5:1 leverage on equities = 20% margin
These restrictions would apply to both spread betting and CFD trading. You can read all the proposals in full here.
How will the proposals affect your trading?
As you can see from the table, these proposals would severely increase the margin required to deal:
Spread betting:
Market – £10/point.....current margin.....ESMA proposed margin
EUR/USD..................£611.................£4073
Germany 30...............£660................£6600
Oil – Brent Crude........£1035................£6900
Apple......................£8950................£32,800
CFD:
Market.........Size................Current margin............ESMA proposed margin
EUR/USD......1 standard lot....$611.........................$4073
Germany 30...1 standard lot....€1,650......................€16,500
Oil – Brt Cde..1 standard lot.....$1,035......................$6900
Apple..........1000 shares........$8,950......................$35,800
How to respond to these proposals
It’s very important that traders share their views on these proposals. As such, ESMA has posed the following question for retail investors to answer:
What impact do you consider that the envisaged measures would have on retail investors?
We’d encourage you to share your views in full. There are two ways to do so:
1. Reply to this email with your answer to the question. Clicking the link below will open a readymade response template. We will then submit all your feedback directly to ESMA on your behalf.
2. Send your thoughts directly to ESMA. We have provided a simple form on our website, ready for you to answer the question.
Once complete, please save your form and then submit it directly to the response page on ESMA’s website. You’ll see there are a few details to complete with your submission:
● Under ‘Activity’, please select ‘Individuals’ from the bottom of the dropdown
● Under ‘Institution’, please write ‘N/A’
Once you’ve filled in the remaining details, you can attach your response and submit.
Please note your contribution may be published once the consultation closes, unless you select otherwise in your response.
More information
It’s important to remember that your account will not be affected unless, and until, ESMA’s proposals become rules. We will let you know well in advance of any changes to your account.
If you’d like to speak to someone about this in more detail, our highly trained client support team will be happy to assist you on 0800 409 6789 or at [email protected]. They’re available 24 hours a day from 8am Saturday to 10pm Friday.
Thank you in advance for sharing your views. With your help, we can ensure the industry is fair to all.
Kind regards
Peter Hetherington
CEO
Margin rates could increase to 5% on major indices and 20% on equities
Dear Mr. Brads
The European Securities and Markets Authority (ESMA) is considering some proposals which are highly likely to affect your trading. You have until 5 February to respond to ESMA, and we would strongly encourage you to do so. ESMA does listen to the views of traders and will shape its final decision according to the feedback it receives.
What are the proposals?
ESMA has come out with a number of proposals – aimed at retail clients only – to try to increase conduct standards across the industry. We largely support these changes, but feel the leverage restrictions are disproportionate and too restrictive. ESMA’s leverage proposals include:
● 30:1 leverage on major currency pairs = 3.33% margin
● 20:1 leverage on major indices = 5% margin
● 10:1 leverage on commodities (excluding gold) = 10% margin
● 5:1 leverage on equities = 20% margin
These restrictions would apply to both spread betting and CFD trading. You can read all the proposals in full here.
How will the proposals affect your trading?
As you can see from the table, these proposals would severely increase the margin required to deal:
Spread betting:
Market – £10/point.....current margin.....ESMA proposed margin
EUR/USD..................£611.................£4073
Germany 30...............£660................£6600
Oil – Brent Crude........£1035................£6900
Apple......................£8950................£32,800
CFD:
Market.........Size................Current margin............ESMA proposed margin
EUR/USD......1 standard lot....$611.........................$4073
Germany 30...1 standard lot....€1,650......................€16,500
Oil – Brt Cde..1 standard lot.....$1,035......................$6900
Apple..........1000 shares........$8,950......................$35,800
How to respond to these proposals
It’s very important that traders share their views on these proposals. As such, ESMA has posed the following question for retail investors to answer:
What impact do you consider that the envisaged measures would have on retail investors?
We’d encourage you to share your views in full. There are two ways to do so:
1. Reply to this email with your answer to the question. Clicking the link below will open a readymade response template. We will then submit all your feedback directly to ESMA on your behalf.
2. Send your thoughts directly to ESMA. We have provided a simple form on our website, ready for you to answer the question.
Once complete, please save your form and then submit it directly to the response page on ESMA’s website. You’ll see there are a few details to complete with your submission:
● Under ‘Activity’, please select ‘Individuals’ from the bottom of the dropdown
● Under ‘Institution’, please write ‘N/A’
Once you’ve filled in the remaining details, you can attach your response and submit.
Please note your contribution may be published once the consultation closes, unless you select otherwise in your response.
More information
It’s important to remember that your account will not be affected unless, and until, ESMA’s proposals become rules. We will let you know well in advance of any changes to your account.
If you’d like to speak to someone about this in more detail, our highly trained client support team will be happy to assist you on 0800 409 6789 or at [email protected]. They’re available 24 hours a day from 8am Saturday to 10pm Friday.
Thank you in advance for sharing your views. With your help, we can ensure the industry is fair to all.
Kind regards
Peter Hetherington
CEO
timsk
Legendary member
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Like cbrads, I've just received the same e-mail from IG and it's very clear they think that ESMA's proposals include spread betting. Yes, it's possible that they're mistaken but, given the changes will impact their business massively, it strikes me that the CEO would have checked and double checked the facts before e-mailing IG's entire client base.
Tim.
Tim.
"ESMA is currently discussing
whether CFDs on cryptocurrencies, whose underlying assets have displayed very high price variation, should be addressed in the measures and whether a 5:1 initial leverage would provide investors with sufficient protection. Alternatively, a lower leverage limit (2:1 or 1:1) or stricter measures (such as a prohibition on the marketing, distribution or sale of CFDs in cryptocurrencies to retail clients) could be considered."
https://www.leaprate.com/forex/regulations/esma-cfd-trading-rules-crypto-leverage-limit/
is this a revenge for brexit
whether CFDs on cryptocurrencies, whose underlying assets have displayed very high price variation, should be addressed in the measures and whether a 5:1 initial leverage would provide investors with sufficient protection. Alternatively, a lower leverage limit (2:1 or 1:1) or stricter measures (such as a prohibition on the marketing, distribution or sale of CFDs in cryptocurrencies to retail clients) could be considered."
https://www.leaprate.com/forex/regulations/esma-cfd-trading-rules-crypto-leverage-limit/
is this a revenge for brexit
Nice that IG are being pro-active and contacting their clients. I have suggested to LCG they could do likewise but they won't yet say whether they will or won't, nor whether they will do anything but wait for the ESMA decision. Not very encouraging.
If contacted for my opinion on these proposed leverage rates I would have to say I would close my account immediately they became mandatory, no point continuing.
If contacted for my opinion on these proposed leverage rates I would have to say I would close my account immediately they became mandatory, no point continuing.
mike.
Senior member
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What would be the alternative if you still wanted a reasonable size leverage ? Some of the uk brokers have offices outside the EU, Does it apply to where the broker is situated or the client ?
Sonicscooter
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Brexit won't make any difference, or that's what IG told me on friday.
EUR/USD..................£611.................£4073
Germany 30...............£660................£6600
Oil – Brent Crude........£1035................£6900
Apple......................£8950................£3 2,800
To be realistic, if one cant stump up the above kind of money to trade then one shouldn't be in the game and it seems obvious why some sort of change is deemed necessary, to point blame one could start with the foolishness of trading the Swissy last year etc.
To consider that to trade the Dax @£5 a point you would need a deposit of £3300 is not out of the question for anyone serious.
Sonicscooter
Experienced member
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Sonicscooter
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The problem as i see it is if they go for an outright ban on CFD's, therefore that includes spread betting.
https://www.fca.org.uk/publication/correspondence/dear-ceo-letter-cfd-review-findings.pdf
https://www.fca.org.uk/publication/correspondence/dear-ceo-letter-cfd-review-findings.pdf
Sonicscooter
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Makes me feel poor not to have £442,000 in liquid assets and not to be part of the in crowd...
https://uk.webfg.com/news/news-and-...ts-as-regulatory-decision-looms--2774220.html
https://uk.webfg.com/news/news-and-...ts-as-regulatory-decision-looms--2774220.html
Not that i mean that trading and gambling is the same thing
But why not do something about gambling if they (EU,UK) are so concerned about people losing money?
"The report by the Gambling Commission estimated that the number of British over-16s deemed to be problem gamblers had grown by a third in three years, suggesting that about 430,000 people suffer from a serious habit.
It also found evidence of an increase in addiction among those playing controversial fixed-odds betting terminals (FOBTs), which have been criticised for allowing betting shop customers to spend up to £100 every 20 seconds."
https://www.theguardian.com/society/2017/aug/24/problem-gamblers-uk-gambling-commission-report
Sonicscooter
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Simple answer and i'm not wanting to go off topic like most threads on here, so if someone loses £100 in a Bookies on a machine and that several hundred people a week do the same etc, that doesn't hit the news, what does hit the news is one Teacher losing £280,000 spread betting, nice big fat news headline.
I maybe should use a tin foil hat :cheesy:
But i think there is more to this than meet the eye?
Maybe it has something to do with next bear market that are close and they dont want traders shorting with high leverage?
I know most of the CFD,SB never hits the real market but if 99% shorting (hedging stocks) someone needs to hedge i think?
The next step would probably be a ban on short shelling (starting in USA)?
But i think there is more to this than meet the eye?
Maybe it has something to do with next bear market that are close and they dont want traders shorting with high leverage?
I know most of the CFD,SB never hits the real market but if 99% shorting (hedging stocks) someone needs to hedge i think?
The next step would probably be a ban on short shelling (starting in USA)?
" the FCA said. It also intends to take "further action" against an unnamed CFD provider whose arrangements were particularly poor."
?
https://www.out-law.com/en/articles...tracts-for-difference-after-year-long-review/
?
https://www.out-law.com/en/articles...tracts-for-difference-after-year-long-review/
new_trader
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ESMA Unfair
I suppose that makes it clear. I sent my reply to ESMA saying that SB is an affordable way for people to learn how to trade as many can't afford DMA. I said the proposal is essentially unfair.
I suppose that makes it clear. I sent my reply to ESMA saying that SB is an affordable way for people to learn how to trade as many can't afford DMA. I said the proposal is essentially unfair.
Sonicscooter
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Well done Sir.
