On 1st of August 2018, the European Securities and Markets Authority (ESMA) introduced industry-wide rules and restrictions designed to protect retail clients from the risks of trading with leverage. Saxo strongly supports these rules as a positive measure to guarantee greater investor protection.
These measures include:
Retail clients
1. Leverage limits on the opening of a position by a retail client, which vary from 30:1 to 2:1 according to the volatility of the underlying instrument:
- 30:1 for major currency pairs;
- 20:1 for non-major currency pairs, gold and major indices;
- 10:1 for commodities other than gold and non-major equity indices;
- 5:1 for individual equities and other reference values;
- 2:1 for cryptocurrencies;
2. 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 Saxo is required to close out one or more of a retail client’s open CFDs;
3. Negative balance protection on a per account basis. This will provide an overall guaranteed limit on retail client losses.
Professional clients
Industry-wide regulations have been introduced and are designed to protect less experienced traders. The above-mentioned rules do not apply to professional traders. If you are a retail client and would like to trade with greater flexibility, you can apply for elective professional status.
If you meet at least two of the following criteria, you may be eligible to reclassify as an elective professional client:
- Have a financial portfolio that exceeds €500,000
- Have placed at least 10 relevant trades in significant sizes over the last four quarters
- Work, or have worked, in the financial sector for at least one year
To apply for professional status:
- Log in to our platform and click on the main menu
> Your account > Account status > Request professional status - Complete the simple form and submit any supporting information.