OANDA gets ready for new ASIC rules for CFD trading
The deadline for the implementation of the new rules for CFD trading in Australia is fast approaching, and global leader in online multi-asset trading services OANDA has published some useful information for its Australian clients regarding these new rules.
As FX News Group has reported, the Australian Securities and Investments Commission (ASIC) has released its Product Intervention Order – Contracts For Difference Instrument 2020/986 which will affect retail clients that trade any CFD products. These changes will come into effect from March 29, 2021.
The new rules will apply to OANDA Retail Trading accounts. In order to continue trading with higher leverage ratios after March 29, 2021 an OANDA Professional Trading account will be necessary.
What are the new ASIC regulatory changes?
Leverage ratio limits for CFDs
- 30:1 on major currency pairs
- 20:1 on minor currency pairs, gold and major stock market indices
- 10:1 on commodities other than gold, and minor stock market indices
- 2:1 on crypto-assets
- 5:1 on shares or other assets (e.g. Treasuries)
Additional changes
- Standardisation of margin close-out percentages for all CFD issuers. This helps ensure that brokers close out their clients’ CFD positions before all or most of the investment is lost. [OANDA has always had the 50% margin auto close-out in place, so its clients will not be affected in any way.]
- Negative balance protection. Prevents losses from exceeding the funds present in a client’s account when a trade is closed. This ensures against negative account balances and the possibility of clients losing money they may not have.
- Prohibition of promotional offers. This includes giving or offering retail clients any special offers such as volume rebates and rewards, incentives or gifts.
OANDA is fully regulated by ASIC and committed to protecting clients and investors. The new ASIC regulations will be implemented seamlessly and immediately on all OANDA platforms on March 29, 2021.
Until that date, this regulatory announcement will have no effect on trading. OANDA promises it will be quick to communicate any future updates or announcements that could potentially impact its clients.