A message to clients
On 23rd October 2020, ASIC released an announcement on several changes to how clients trade CFDs from 29th March 2021.
HOW DO THESE NEW ASIC RULINGS AFFECT YOUR TRADING WITH DECODE CAPITAL?
The changes include leverage reductions, negative balance protection, margin close-out changes, and prohibitions on certain inducements. These changes only affect clients. Wholesale clients are not affected.
New margin rates from 29th March 2021
- 30:1 for CFDs referencing an exchange rate for a major currency pair
- 20:1 for CFDs referencing an exchange rate for a minor currency pair, gold or a major stock market index
- 10:1 for CFDs referencing a commodity (other than gold) or a minor stock market index
- 2:1 for CFDs referencing crypto-assets
- 5:1 for CFDs referencing shares or other assets
Additional new rules for clients came into effect on 29th March 2021
- Margin close-out
If the funds you hold in your trading account fall to less than 50% of the total initial margin required for all your open trades, there is a requirement to close out your positions.
- Negative balance protection
The total losses on your CFD positions are limited to the funds in your trading account.
- Prohibition on inducements
Certain benefits are considered as inducements and are prohibited. Examples are the offering of trading credits and rebates or gifts such as iPads etc.