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ASIC’s product intervention

November 20, 2020

ASIC’s product intervention 

What you need to know 

ASIC made a recent announcement that will change the way we can offer our products and services to retail clients of our ASIC licensed entity. We’ve put together a summary of the main reforms below to help you understand these changes and how they may affect you. These changes are due to come into effect from 29 March 2021.   

Find out more about ASIC’s product intervention.   

Changes to leverage caps 

A key focus of the change is leverage restrictions, which will affect the amount of margin retail clients are required to deposit to trade CFDs or Forex. Here’s how the proposed changes look: 

30:1 leverage on major currency pairs 

20:1 leverage on major indices, gold and minor currency pairs 

10:1 leverage on commodities (excluding gold) and minor indices 

2:1 leverage on cryptocurrency assets 

5:1 leverage on shares or other underlying assets 

Compulsory margin close-outs 

If the funds you hold in your account fall to less than 50% of the total initial margin required for all of your open trades, there is a requirement to close out your positions. 

Prohibition on inducements 

Certain inducements to retail clients are prohibited (for example, offering trading credits and rebates or ‘free’ gifts like iPads). Some circumstances like as volume-based discounts, educational tools, information services or research tools will still be allowed. 

Negative balance protection 

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

Will I be affected? 

The ASIC changes will impact retail clients only, not wholesale clients. 

It’s important to note that you will lose some retail-only protections if you become an IC Markets Pro account holder, so you do need to consider this in your decision. If you are interested in finding out more about becoming a wholesale client or ‘Pro Trader’, please visit our Pro Trader page. We’ve included a summary below of the eligibility requirements but please refer to the Pro Trader page for full details. 

As an IC Markets Pro client, you’ll have access to higher leverage and exclusive account features.  

If you have any more questions about ASIC product intervention and/or how to become an IC Markets Pro client please contact our friendly support in chat or via email at [email protected]

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