Online trading company Rakuten Securities Australia is preparing to implement the changes to CFD trading conditions for its retail clients.

As FX News Group has reported, the Australian Securities and Investments Commission (ASIC) will be introducing restrictions on CFD trading for retail investors in Australia. The regulatory updates will be effective March 29, 2021.

Rakuten Securities notes that trading conditions for its clients will not change before this date.

Under the new rules, there will be a set of restrictions on CFD leverage:

• 30:1 for a major currency pairs
• 20:1 for minor currency pairs, gold or a major stock market index
• 10:1 for commodities (other than gold) or a minor stock market index
• 2:1 for crypto-assets
• 5:1 for shares or other assets

The new Margin Close-out Protection rule means that margin close out levels will be set at 50% of equity. There will also be a Negative Balance Protection, as well as restrictions on inducements for retail traders of CFDs.

Rakuten Securities Australia says it has been working hard to ensure its systems are ready for the changes.

Rakuten Securities Australia offers Pro Accounts but not all clients are eligible. Professional traders can make use of a minimum of 0.25% margin. Rakuten Securities Australia is required to limit leverage on different products offered to retail accounts to comply with the ASIC requirements. These restrictions do not apply to Professional Accounts.

Professional traders are responsible for ensuring that their account does not fall into a negative balance. If it does, they will need to make additional payments to bring the balance back above zero, meaning that their losses can exceed their deposits.

Professional Accounts will not be entitled to some of the protections afforded to retail clients under the Corporations Act 2001 (Cth).

Clients of Rakuten Securities Australia are advised to consult this page.