Turkey's financial markets regulator, the Capital Markets Board (SPK), has introduced a new set of restrictions on the forex market, lowering further the maximum leverage and setting a minimum security deposit requirement to open a forex trading account.
According to a publication in the Turkish State Gazette, effective from February 10, 2017, the maximum leverage that can be offered by forex brokers operating in Turkey is 1:10 and the minimum required sum to open a forex trading account is TRY 50 000 (around $13 600), or their equivalent in another currency.
If the funds in the account fall below this sum because of withdrawal or transfer to another account, new positions cannot be opened. If the sum falls bellow TRY 50 000 due to losses from trading, new positions can be opened.
The new leverage restrictions and security deposit requirements are in effect for new positions. The already opened positions are under the old conditions.
Previously the max leverage was set at 1:100 and could be offered to clients with at least TRY 20 000 (around $5440). For those with less funds, the leverage cap was set at 1:50.
As per the new SPK requirements, the brokers must inform in written their clients of the new conditions and obtain their signature within 45 days at the latest.
Experts on the Turkish forex market commented that the new restrictions will in practice kill the forex industry in the country.
The Turkish forex market has over 40 licensed brokers operating on it. The majority of them are local players, but some international brokers like Saxo Bank and XTB and Phillip Capital are also present.
Turkey is the latest country to introduce some regulatory restrictions on the retail forex and CFD brokers, along with France, Cyprus
and Belgium (which altogether banned trading in forex, CFDs and binary options). The Netherlands government and the country's financial markets regulator are mulling some limitations, while Germany's BaFin
and UK's FCA
have already opened consultations on a set of tighter measures with the industry.