Alfa-Forex also sets new default leverage in line with CySEC rules

Alfa-Forex also sets new default leverage in line with CySEC rules

- in All News, Forex Brokers, Regulation
Alfa-Forex

Cyprus-based forex broker Alfa-Forex has started offering a new leverage cap and is performing appropriateness test to assess whether traders should get the cap for experienced or novice traders. With the changes, the broker aims to meet the most recent rules of its home regulator, the Cyprus Securities and Exchange Commission (CySEC).

Last year, the CySEC altered forex and binary option regulations, making it harder for brokers to meet its requirements. In November it announced the ban of bonuses as a measure to attract clients and the introduction of lower default leverage cap (50:1) for forex and contracts for difference (CFDs). For less experineced traders, the cap will be lower (20:1). The changes were triggered by the recommendations and guidelines of the European Securities and Markets Authority (ESMA) from mid-October in regards to forex and binary options regulation. Although the new rules were approved months ago, they are coming into effect now.

“However, this new requirement for CIFs is not a cap on leverage. Clients that explicitly ask for higher leverage and fully understand and accept the risks envisaged from their decision will be able to trade with higher leverage and lower margin requirements,” Alfa-Forex said in a notice.

In order to determin which traders fall in the ‘less experienced’ category, Alfa-Forex will test clients   and define the leverage level that is appropriate or/and acceptable. Existing clients can submit requests to take the test and if they don’t, then no change in leverage rates will apply to them.

“Should you wish not to provide the relevant information regarding your knowledge and experience, Alfa-Forex will consider that it has no adequate information to assess and perform the appropriateness test. As a result you consent to maintain the existing level of leverage and fully understand and accept the risks arising from this decision,” the broker noted.

Alfa-Forex is not the only broker to change trading conditions as a result of the new regulation in Cyprus. We’ve informed you that Exness, HotForex, ActiveTrades, VinciCM and Invest.com have also made similar alterations.

Alfa-Forex is a brand of Cyprus-based Alfa Capital Holdings, which is part of Alfa-Bank Banking Group. The broker is focused on the markets of the EU, Russia and the Commonwealth of Independent States (CIS), or the former Soviet countries.

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