Do not invest more money than you can afford to lose.
Cyprus-regulated forex broker ForexTime, or FXTM, said it has halved the maximum leverage rate it offers for forex instruments to 500:1 from 1,000:1. The move is necessary due to the recent regulatory amendments adopted by the Cyprus Securities and Exchange Commission (CySEC), which supervises the broker.
Conditions for clinets’ accounts have already been altered to meet the new constraints. Non-forex instruments will not be affected by the change.
The broker introduced a 1,000:1 leverage for all ECN accounts in September last year. Prior to that some account types on the ECN server were offered at a lower leverage rate.
FXTM is based in Cyprus and is regulated by the Cyprus Securities and Exchange Commission (CySEC), which allows it to provide its services in all EU countries. Earlier this year, the broker obtained a license from the Financial Services Board (FSB) of South Africa. It has also set up a London-based unit, but it has provided no information at the time as to whether it plans to acquire a UK license.
FXTM is not the only broker to alter its trading conditions to meet the new regulatory requirements in Cyprus after last year, the CySEC altered forex and binary option regulations, making it harder for brokers to meet its requirements. Other CySEC-regulated forex brokers that announced changes to their trading conditions, prompted by the new regulatory rules include RoboForex, Exness, HotForex, ActiveTrades, VinciCM and Invest.com and Alfa-Forex.
In November Cypriot regulator 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 just recently.
