Rakuten Securities, FP Markets and CMC Markets Release Announcement Regarding ASIC’s Product Intervention Order

Earlier this month, the Australian Securities & Investments Commission (ASIC) has issued the Product Intervention Order on 23 October 2020, effective 29 March 2021.

Recently, brokers including OANDA and eToro reminded their Australian clients of new rules for CFD trading. According to the latest news, Rakuten Securities Australia, FP Markets and CMC Markets published announcement regarding the new rules.

Under the new ASIC CFD regulations, 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

Additionally, negative balance protection will be applied. A standardised margin close-out level of 50% of the total margin required for all open CFD positions will be applied to customers' accounts. Certain promotional inducements will be prohibited.

Notably, CMC Markets addressed that it will close the clients' open positions automatically until their net equity is back above 70% of the margin required for remaining open positions.

The broker is already using margin close-out protection. This means there will be no margin close-out protection changes for CMC Markets retail clients from 29 March 2021.