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FXTM introduces Negative Balance Protection to all account types

Mar 09 2017
By
Jonathan Smith ,

After halving maximum leverage (to 1:500), leading global brokerage FXTM announced it is introducing Negative Balance Protection to all account types. The broker sent notes to all its clients on Thursday, informing them about the amendments to the agreements, which will take effect immediately.

 

In line with CySEC proposiotions and ESMA guidelines introduced in 2016, FXTM announced it ensures that losses will never exceed the total available funds in client accounts. Actually, this means that the broker’s clients cannot lose more than they have deposited - a policy also known as negative balance protection.

 

In October, 2016 the Cypriot financial watchdog issued a circular addressed to Cyprus investment firms, setting some new rules about trading bonuses, maximum leverage and withdrawal time. In the document, CySEC also urged brokers to ensure that clients cannot lose more than they have in their accounts.

 

FXTM has already halved max leverage to 500:1 on back of CySEC limitations, and now it takes the next step to limit the risk exposure of its clients. Higher leverage allows traders to make impressive profits with small deposits when the markets move in their favor, however the opposite is also possible: should the market move against them, they may incur heavy losses, exceeding their initial investments. 

 

The best possible way to secure your funds as a trader is to be extremely cautious when using high leverage levels and, to choose a well-regulated broker who provides Negative balance protection.

 

ForexTime Limited, doing business as FXTM, is a global and award-winning broker with clients from over 180 countries. It is licensed and regulated by the Cyprus Commodities and Exchange Commission (CySEC) as a Cypriot Investment Firm. What is more, the broker got is licensed by the Financial Services Board (FSB) of South Africa previous year. In 2016 FXTM has also set up a London-based unit

TAGS: FXTM  negative balance protection 

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