What do you think of the new ESMA proposals?

[247trader]

These seem to be confirmed and live here: https://www.esma.europa.eu/sites/default/files/library/esma71-98-128_press_release_product_intervention.pdf

 

Binaries are a gonner 

Leverage to be limited (as below)

 

 

Market reaction:

IG close 816 IG open 789.5
Plus close 1043 open 1000
Cmc close 159.2 open 155

[Caseynotes]

So, looks like they have completely ignored the 18,500 responses then. Authoritarian EU diktat at it's finest.   

[Guest Trader_1707]

I hope they will not limit  vanilla options......

[Guest straddle]

traditional options  are CFD's

[Caseynotes]

IG comment 'disappointed', and note ESMA initially can only introduce temporary (3 month) intervention measures then consider extensions/permanent change (after further consultation?)

 

 https://www.leaprate.com/forex/regulations/ig-group-disappointed-by-esmas-leverage-restrictions-expects-lower-fy2019-earnings/

 

[Guest PandaFace]

Gold being bundled in with non-major FX? And at 20:1 no less... absolute madness. Ahhh the stability and lack of volatility which some of those minors Vs the long standing gold price action. Genius! /s

 

The non EU trading houses must be loving this! Bet they can’t wait to push aggressive PPC advertising campaigns giving 1000x leverage, welcome bonuses, and free lambos for all

[Guest Zero]

I can't believe that - does it mean what it seems to say?  Hard to read it any other way.  

 

Be good to hear from IG.

 

I'm glad I don't live in the EU.  Does the Brexit mean IG UK are safe...?

 

Then there's NADEX to consider - the model I mean.  

 

What a joke.  

[JamesIG]

Hi all - you can see the official response from IG on an IG hosted, and official group website, here: http://www.iggroup.com/press/latest-news/response-esma-and-fca-announcements

 

 

[spiderman]

When does this come in to force.

[Caseynotes]

Just a few months.

 

 

https://www.financemagnates.com/forex/brokers/breaking-esma-rolls-draconian-cfd-leverage-restrictions-kills-binary/

 

 

[spiderman]

Does it only affect  new positions or are all positions that we have open before the changes included?

[JamesIG]

Hi all. I can see there have been a few questions which I wanted to reply to, however please do not take the following forum reply as an official statement from IG. As posted earlier, please check out our official RNS which was released here, and over the next few days keep an eye out for our emails as we will be communicating how these regulations will impact clients. I will make sure to keep Community updated as well. Until then the following should be read for what it is - a non official forum post.

 

There currently isn't a specific date at when these regulations will come into effect, however I believe they will intend to adopt them within about a month. From that point anyone who offers these products (such as IG) will have two months to bring in the CFD rules into play, and one month to bring in the binary rules. These time frames may change and should be seen as a 'hard cut off' from the regulators, however changes may be implemented by IG sooner.

 

If you are on a CFD or Spread Betting account and reside in the regulated area your account will see a change in regards to margin, however we will of course give as best notice as possible. Over the coming days we will be compiling a full FAQ on this which I will post to Community, as well as 'bump' this post here so everyone is notified.

 

ESMA define 'CFDs' to not only include a CFD account, but also Spread Betting. If you hold a future, a spot FX position, an option, or any other bet or trade within the CFD or Spread Betting account, then these margins will be increased. For example, if you sell a FTSE Call Option via a Spread Bet (which are currently margined at 0.5%) you will require a 10x increase in margin to reflect the 20:1 values as noted above (which works out at 5%). The trade may be an option, but it is still a Spread Bet. Hopefully this clarifies the position for a few people.

 

As stated, this is simply a forum reply. We will contact all (and post on community) once we have a clear understanding on how this impacts everyone, so please take the email com's as the official notice and stance. In the meantime we will continue to provide the high level of customer service and deal execution you expect from us, and will continue to discuss openly and transparently as matters unfold. 

 

[Guest LarryA]

Hi James

 

You used the phase "reside in the regulated area". Are you implying that only EU residents need be concerned about these regulations?

 

Does this mean that IG will still be offering Binary Options and lower margins, etc on CFD's to NON-EU retail clients?

 

 

[Kodiak]

Was thinking of this (and if i understand it correct)

 

"A margin close out rule on a per account basis. This will standardise the percentage of margin (at 50% of minimum required margin) at which providers are required to close out one or more retail client’s open CFDs;"

 

IG could give us a loan/credit for the same amount as deposited to use for intraday trading?

 

say you have  1000 and then IG loan us 1000 then we have 2000 to trade with and a max loss of 1000?

 

thats lower risk than  we have at the moment 

 

but ESMA would probably not like it:smileysad:

[JamesIG]

---

wrote:

 

You used the phase "

reside in the regulated area

". Are you implying that only EU residents need be concerned about these regulations?

 

Does this mean that IG will still be offering Binary Options and lower margins, etc on CFD's to NON-EU retail clients?

---

Hey  - I've checked with our legal eagles and my phraseology was not entirely correct. The new rules will apply to people who are contracted to our UK office or one of our European branches, regardless of whether such people are resident in EU or not.

Anyone contracted with one of our other offices (eg our Swiss bank or Australian office) will not be subject to the new rules, again regardless of where they are resident. You can see our office locations here (https://www.ig.com/?rc=true) for more info.

[JamesIG]

---

wrote:

Does it only affect  new positions or are all positions that we have open before the changes included?

---

Hi  - We believe the new rules will only apply to positions opened after the date on which the new rules become effective, and existing positions will not be impacted. However, we need to wait to see the final rules before knowing this for sure. We think the final rules will be available in the next month. Our email comms team will keep clients updated on this, and I've set a reminder to report back here as well.

[Guest straddle]

James

Is there any problem to transfer an IG account to Switzerland or Australia? Does one have to be non-EU resident? This would seem to be a solution to avoid the ridiculous ESMA regulations and still remain an IG client.

[Caseynotes]

Interesting decision taken by ESMA when looking at the statistical break down of replies ESMA received. This is the EU in action, your vote counts (for nothing).

 

https://replytoesma.trading/data.html

 

 

[Guest PandaFace]

I guese there are some minor good points... "ESMA has listened to traders on margin close-out rules and adapted its policy accordingly. A 50% close-out rule will now apply on an account basis, rather than on a position-by-position basis. We’d like to thank all traders who submitted views – your valuable input has resulted in a positive shift for the industry rather than a backwards step."

 

Is this just a blanket fact now? That sites notes that "we will continue to make the case that these leverage changes are disproportionate." Is this like ... a chance for a rebuttal or something? Can they (IG / the industry / the traders etc) challenge or something?

[Caseynotes]

IG's new margin requirements  for 'early July' (no exact date set).

 

[Kodiak]

A question about the new margins

 

If i attach a standard stop when opening a trade would that have any effect on the new margins?

 

say i open 1 per point on DAX 12 000 then the marging would be 600? but if i open a stop at the same time say 50 points would it still be 600?

 

 

[Guest LINGY]

I think unless the spread betting firms can come up with a way around this then it is going to be devastating for them,maybe ig could set up an offshore site to circumnavigate these regulations.

[TheGuru12]

We need to do EVERYTHING we can to stop this! I am going to send a strongly worded letter to the people in charge. I would urge people to do the same!! These are the emails if anyone is interested. 

Verena.Ross@esma.europa.eu
Steven.Maijoor@esma.europa.eu

This totally, This. From what I understand then the MINIMUM requirements per trade are going to be as follows. (see spoiler)

 

AUD/USD

£255
EUR/CHF

£391
EUR/GBP

£292
EUR/JPY

£435
EUR/USD

£410
GBP/EUR

£378
GBP/USD

£466
USD/CAD

£429
USD/CHF

£317
USD/JPY

£353
CAD/CHF

£246
CAD/JPY

£274
CHF/JPY

£370
EUR/CAD

£528
EUR/SGD

£537
EUR/ZAR

£4843
GBP/CAD

£601
GBP/CHF

£445
GBP/JPY

£495
GBP/SGD

£611
GBP/ZAR

£5513
MXN/JPY

£19
NOK/JPY

£45
PLN/JPY

£103
SEK/JPY

£42
SGD/JPY

£269
USD/SGD

£436
USD/ZAR

£3935
AUD/CAD

£329
AUD/CHF

£243
AUD/EUR

£207
AUD/GBP

£182
AUD/JPY

£271
AUD/NZD

£352
AUD/SGD

£334
EUR/AUD

£533
EUR/NZD

£566
GBP/AUD

£607
GBP/NZD

£644
NZD/AUD

£313
NZD/CAD

£310
NZD/CHF

£229
NZD/EUR

£195
NZD/GBP

£171
NZD/JPY

£256
NZD/USD

£240
CHF/HUF

£882
EUR/CZK

£842
EUR/HUF

£1039
EUR/ILS

£1427
EUR/MXN

£7444
EUR/PLN

£1401
EUR/TRY

£1621
GBP/CZK

£958
GBP/HUF

£1181
GBP/ILS

£1624
GBP/MXN

£8482
GBP/PLN

£1593
GBP/TRY

£1846
TRY/JPY

£89
USD/CZK

£683
USD/HUF

£843
USD/ILS

£1160
USD/MXN

£6052
USD/PLN

£1136
USD/TRY

£1314
CAD/NOK

£2019
CHF/NOK

£2735
EUR/DKK

£2481
EUR/NOK

£3214
EUR/SEK

£3420
GBP/DKK

£2823
GBP/NOK

£3656
GBP/SEK

£3891
NOK/SEK

£353
USD/DKK

£2013
USD/NOK

£2606
USD/SEK

£2776
AUD/CNH

£1600
CAD/CNH

£1615
CNH/JPY

£56
EMFX BRL/JPY

£106
EMFX GBP/INR

£304
EMFX USD/BRL

£1103
EMFX USD/IDR

£456
EMFX USD/INR

£216
EMFX USD/KRW

£3529
EMFX USD/MYR

£1281
EMFX USD/PHP

£174
EMFX USD/TWD

£962
EUR/CNH

£2564
EUR/RUB

£23466
GBP/CNH

£2921
NZD/CNH

£1508
USD/CNH

£2084
USD/RUB

£19048

 [mod edit - placed your list in a 'spoiler' to save room]

 

[Guest london]

these new measure are very unfortunate for traders as they limit opportunities 

 

these new measure are very unfortunate for IG as they will make less profit

 

unfortunately these measure came around due to the nature of the business that IG and other ran 

 

effectively a ponzi scheme where they do everything to churn and burn customers and get new ones to keep they business going 

 

we are now even getting ads on tv with a company promoting that they put all orders into the market ! implying they know that other companies try to get customers to lose .. 

 

ig asking for help from customers .. is like a fox asking the chickens to tell the farmer the fox is ok .. 

[Kodiak]

I think we all know that trading is not charity and that IG also needs to make a profit to survive

 

and that we all have a chance to learn trading and make money on it without any help from ESMA

 

gambling on the other hand, thats a 99.999999 chance of losing money and you can never learn to win money gambling and still we have this tv-commercial and other type of marketing day in and day out

 

why dont they do anything about gambling if they are so interested in people not losing money?

 

could it be that the gambling industry have more lobbyist working in the EU parliament?

[Guest london]

spread betting business practices mean thay they got onto the radar of regulators ... 

[Guest PandaFace]

you don’t know what you’re talking about. Ponzi scheme? If you think this regulation will do anything other than expose the exact people who this is trying to protect (the unknowing, can’t be bothered to understand spread betting or take the time to learn, get rich quick punters who love leverage) to the TRULY unregulated firms which will set up shop immediately - then you’re much mistaken.

[Rich-72]

This has basically killed it for me trading with an EU broker. I simply can't trade under such limiting conditions.

[Guest PandaFace]

We now need a website like that esma one IG set up, but rather individuals post the account they’ve closed in the uk - IG, CMC, City etc - and the new ones they open is far off lands.

 

That would make a great research article piece for the FT. “ESMAs draconian regulations push the most vulnerable retail investors offshore and subjects them to unnecessary, unregulated risk”

[Rich-72]

It does surprise me that this thread isn't generating more traffic/comments than it has...