The Capital Markets Board (CMB), the regulatory authority of Turkey, has ordered eight local forex brokers to pay penalties in the combined amount of TRY 345,408 for providing leverage ratios higher than the regulated maximum, forexbrokerleri.com, an online media for Turkish broker news, said on Wednesday.
Two of the brokers – Ata Yatırım Menkul Kıymetler and Meksa Yatırım Menkul Degerler, were each fined TRY 24,672. The other six brokers were ordered to pay a fine of TRY 49,344. These are A1 Capital Yatırım Menkul Degerler, ATIG Yatırım Menkul Degerler, Baskent Menkul Degerler, Invest AZ Yatırım Menkul Deferler,Isık Menkul Degerler, and Tera Menkul Degerler.
The brokers have advertised on their websites that they offer leverage trading and that they haves received the CMB’s approval and guarantee to do so, when in fact this is not the case.
The CMB announced the fines in a weekly bulletin on 27 January, 2016.
Following is a list of the fined brokers, the amount of fine they received, and the maximum leverage the offer:
|Broker||Maximum leverage:||Fine (TRY)|
|A1 Capital Yatırım Menkul Degerler A.S.||100:1||49,344|
|Ata Yatırım Menkul Kıymetler A.S.||100:1||24,672|
|ATIG Yatırım Menkul DeGerler A.S.||100:1||49,344|
|Başkent Menkul DeGerler A.S.||100:1||49,344|
|Invest AZ Yatırım Menkul DeGerler A.S.||100:1||49,344|
|Isık Menkul DeGerler A.S.||100:1||49,344|
|Meksa Yatırım Menkul DeGerler A.S.||100:1||24,672|
|Tera Menkul DeGerler A.S.||100:1||49,344|
Earlier this month, the CMB introduced a new law which requires forex broker to conform to new maxumim leverage requirements. Trading accounts with a balance of less than TRY 20,000 cannot offer leverage rates of more than 50:1 for trading of gold and popular currency pairs such as the EUR/USD, USD/TRY, and EUR/TRY, and the maximum leverage for other pairs is 25:1.
Leverage for popular pairs traded via accounts with more than TRY 20,000 has been set at a maximum 100:1, while for other currency pairs the cap is 50:1.
Leverage is a type of virtual borrowing that traders can get from brokers. It allows ivestors to operate with higher amounts and to increase their profit. The higher the leverage rate, the greater the buying and selling power of a trader. Traders can operate with it, but can’t withdraw it or lose it
The Turkish watchdog introduced the new regulation without a prior warning and provided brokerages with no proper time to react, which caused a chaos among brokers. Many were unable to adapt to the new law in a timely manner and were forced to temporarily suspend operations.
Source: Forex Brokerleri