Higher income customers will be able to trade major currency pairs with leverage as high as 1:50, while less affluent traders will be allowed leverage of just 1:20. Those are some of the new proposals of the Cyprus Securities Exchange Commission (CySEC), due to take effect on July 30th 2019.
In order to enjoy higher leverage, clients of CySEC brokers will have to prove they have either a gross annual income over 40 000 EUR, or net liquid assets of at least 200 000 EUR.
Traders, who do not cover the criteria will be allowed leverage of up to 1:20 with major currency pairs, 1:10 with minor currency pairs, gold and major indices, 1:5 with other commodities and non major indices and 1:2 with stocks. And they will get no leverage for trading crypto CFDs at all.
Affluent traders on the other hand will enjoy leverage of up to 1:50 with major currency pairs, 1:30 with minor currency pairs, gold and major indices, 1:20 with other commodities and non major indices, 1:10 with stocks and 1;2 with crypto coins.
“Segmentation of the retail clients into three separate categories (plus retail clients falling within the negative target markets, who will not be allowed to be on-boarded) will require careful CIF due diligence, on-boarding, and client categorization processes,” the CySEC said in a statement.
Also, according to the proposals binary options will be completely and permanently banned, all clients will get a negative balance protection, and will have their positions closed automatically when their funds reach 50% of the margin required to maintain all open positions.
Brokers and clients can send their comments on the proposals until June 14th.
Unlike CySEC most regulators throughout Europe adopted the European Securities and Markets Authority (ESMA) proposal of unified maximum leverage of up to 1:30 for all retail customers, trading currency pairs, no matter major or not.