Dear Valued Client,
Greetings from INGOT Brokers.
INGOT Brokers would like
to announce that the new regulations introduced by the Australian Securities and Investments Commission (ASIC) – effective as of March 29, 2021 – will
impact retail clients of brokerage firms. Below, we will thoroughly explain
these changes, which shall not affect our wholesale, professional, and
sophisticated clients.
Current Positions
If you are a retail client, you
will be able to maintain your existing leverage over all your currently open
trades up until March 26, 2021. However, from March 29 forward, if you still want
to maintain your open positions, you will need to ensure that your account is
sufficiently funded. Otherwise, you will have to voluntarily close your
positions, or else they may be subject to liquidation as the margin requirement
will change.
If you are a wholesale client,
your current positions will NOT be affected by the product intervention.
Legal Documents
Our Terms and Conditions have
changed. As such, we urge you to take
the time to familiarize yourself with the new set of legal documents that you
will be required to acknowledge and abide by as of March 29, 2021.
Leverage Caps
Change in leverage restrictions
will affect the margin amount retail clients are obligated to deposit in order
to trade CFDs or Forex. Below are the proposed changes:
-
Examples
Suppose you are trading EUR/USD
at the price of 1.20000, and your account balance is USD 10,000. To place a
trade of one lot (contract size = USD 100,000), the margin requirement will be
as follows:
-
Before the ASIC Product
Intervention on Mar 29, 2021:
At leverage of 1:100, the initial
margin requirement = contract size/leverage x price
= 100,000/100 x 1.20000
=
USD 1200
This is the amount you need to
open the trade.
-
After the ASIC Product
Intervention on Mar 29, 2021:
At a leverage of 1:30, the initial
margin requirement = contract size/leverage x price
= 100,000/30 x 1.20000
= USD 3999.9
This is the amount you need to
open the trade.
50% Margin Close-out Level
According to ASIC regulations, the minimum automated stop-out level is 50%. this means that an automatic stop-out will occur
if a retail account's equity falls below 50% of the required margin. This
percentage (margin level) is updated periodically on our platform.
Open positions existing before
March 29, 2021, will be subject to the new 50% margin close-out requirement,
which may need you to fund your account and ensure that you cover the
additional margin required to avoid your positions being closed out.
It is important to note that once
the equity* falls below 50%, the open position(s) may be subject to automatic
stop-out.
Equity = Balance + Running Profit/Loss*
However, this percentage may be increased depending on your account type and experience level. To know the exact number please check your account information page.
Prohibition on Inducement
Offering some inducements (such
as trading credits and ‘free’ gifts) to retail clients is no longer allowed.
This excludes certain circumstances like some discounts; educational,
information, and research tools; and information services.
Negative Balance Protection
Protection against negative
account balances will be provided by limiting a retail client’s CFD losses to
the funds in their CFD trading account.
Affected Clients
These changes will only impact retail
clients.
Additional Options
-
If you would like to
maintain the old leverage levels, you may do so by converting your account to
become a Sophisticated Trader via the INGOT Brokers Wholesale Account. Click here to check
the terms and conditions of becoming a Wholesale Trader, as well as your
eligibility.
-
To maintain your currently
open positions, you can achieve that by funding your account.
Professional Account
For more information about the
ASIC product intervention, do not hesitate to contact our expert customer
support team via customerservice@ingotbrokers.com.au.
INGOT Brokers Team
phishfort