ASIC Regulatory Update

ASIC Product

Note: This announcement only applies to ASIC regulated retail clients and will come into effect from 29 March 2021. There is no change to the current situation for now.

On 23 October 2020, ASIC made a product intervention order with respect to contracts for difference (CFDs) for retail clients. The order imposes conditions on the issue and distribution of CFDs.

What are the Changes?

The changes released
by ASIC include:

Leverage ratio limits

The order will restrict the CFD leverage that service providers can offer to retail clients. The maximum ratio that will be allowed for CFD products are listed in the table below:

CFD Product
30:1 Major currency pairs
20:1 Minor currency pair, gold or a major stock market index
10:1 Commodity (other than gold) or a minor stock market index
5:1 Shares or other assets
2:1 Crypto-assets

Margin close-out percentages

Standardise CFD issuers’ margin close-out arrangements

Negative balance protection

Limit a retail client’s CFD losses to the funds in their CFD trading account by protecting against negative account balances.

Promotional offers

Inducements to retail clients. Service providers are prohibited from giving or offering any inducements. This includes trading credits, rebates or 'free' gifts such as electronic devices.

What Does this Mean
for ASIC Regulated

It is important to note that the order does not come into force until 29 March 2021. There is no change to the current situation for now. FP Markets clients will be provided with detailed information about the changes as this date approaches.

Do the Changes Apply
to all Clients?

No. The changes only apply to our ASIC regulated retail clients and do not come into effect until 29 March 2021. The regulatory changes do not apply to Wholesale investors. Those who have a FP Markets Professional Account (FP Pro Account) are recognised as Wholesale investors.

For more information about eligibility of becoming a FP Markets Pro client, click here

What if I am Not Eligible
for a FP Pro Account?

You will continue to receive an award-winning trading experience from the world's #1 Global Value Forex Broker*. One of the aims of the ASIC intervention order is to follow similar measures that have already been introduced in major overseas markets such as the United Kingdom and European Union.

With a licenced presence in Europe we are familiar with the proposed changes, and the operational processes in order to facilitate the change. Our dedicated customer support team and personal account managers will be on hand to assist FP Markets traders throughout the transitional period.

For additional information contact us using a variety of methods including Live Chat, Phone and Email.

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