June 14, AtoZForex – Following the first list of Forex Brokers Brexit risk management strategies, this second list informs you further on the brokers' Brexit risk management plans. As it appears, retail trading platforms currently are requesting higher amounts of margin on products related to UK equities and sterling from their customers. Remembering last year Swiss franc volatility events, most of the brokers are demanding their clients to increase their cash balances for transacting in sterling and UK shares.
What are the Forex Brokers Brexit risk management strategies?
Following this trend, AtoZForex team presents you the full list of Forex Brokers Brexit risk management strategies. Our team has asked all of the brokers to provide a short description of their risk management activities ahead of the Brexit referendum. We have analyzed the broker’s risk management activities and found out that the majority of brokers has taken measurements. Yet, some of the Forex Brokers will not change their leverage. Nevertheless, below is the second list of brokers that do have taken measures in regards to leverage, margin requirements, and overall risk management.
FXPRIMUS Brexit Risk Management
The PR & Marketing Communications Manager at FXPRIMUS, Helen Astaniou informed us that a number of adjustments have been made to the trading environment of FXPRIMUS. In order to protect the clients during this time of increased market volatility, here is exactly how FXPRIMUS is doing so:
"Please be informed that at the start of trading on Sunday 19th June 2016 we will be changing our margin requirements for all Sterling (GBP) pairs, ahead of the UK's Brexit vote which takes place on the 23rd June. The changes will be on all of FXPRIMUS trading platforms. Margin for all Sterling (GBP) pairs will be increased from the current variable rate to a minimum of 2% (1:50) regardless of your account leverage. Additionally, margin requirements for Brent Oil will be increased from 1% to 2%.
Please be aware that these changes will be in effect during the entire week of Sunday 19th June 2016 until close of trading Friday 24th June 2016. Should the extreme volatility that is expected continues into the following week, we will maintain these increased margins. We encourage you to prepare ahead of time so that if you have open positions in the affected currency pairs, or you plan to open new positions, please ensure your account is funded appropriately."
FxPro Brexit Risk Management
In response to AtoZForex's inquiry on FxPro's Brexit risk management measures, FxPro's Customer Support Supervisor, Amy Pepper has informed us that there will be: "Leverage restrictions in place, for the purpose of minimising the risk for our Clients. These are currently being decided by our management and will be announced as soon as possible."
GDMFX Brexit Risk Management
According to Martin Penev, the Chief Account Executive at GDMFX, the broker has already implied a number of procedures for occasions of Extreme market Conditions, such as the Brexit referendum and also the Swiss Frank fiasco last year:
"None of the procedures we imply include changing Leverage, without prior notice or when there are running trades. This is a Default policy of operation. One of the options would be to stop the GBP pairs, however this would be among the last choice of course we would undertake."
ICM Capital Brexit Risk Management
Reaching out to ICM Capital their Marketing manager, Elizabeth Rayment has informed that ICM Capital has taken several measures. Considering that: "The Brexit referendum to be held on 23rd June 2016 could potentially be one of the biggest events facing the financial markets in 2016. Due to previous black swan events, as well as the anticipated volatility from the Brexit referendum within the market, ICM Capital has increased the liquidity pool, which will significantly improve pricing and execution of trades. We may see increased volatility and unpredictable market moves right up to and after the referendum has taken place."
"As a result, products which are most likely to be affected by the vote will have a different leverage starting 19th June 2016. All EUR crosses will have a leverage of 1:50, all GBP crosses will have a leverage of 1:25 and F100 and DAX will have a margin of $5,000. The newly introduced leverage will reduce the risk of clients entering negative balances during big market movements or gapping events. Clients, who are trading with higher leverage and wish to trade larger volumes, are urged to deposit increased figures. We expect margin levels to return to normal after the referendum and will inform clients as soon as they do.”
IFC Markets Brexit Risk Management
In a response to AtoZForex's inquiry, the Customer Support Manager of IFC Markets, Daniel Archer has clarified the following:
"Please be informed that due to The UK's EU referendum regarding leaving or remaining in the European Union from 13 to 23 June, 2016 margin requirements for these instruments may be changed. Trading on GBP pairs is not supposed to be closed due to Brexit."
JustForex Brexit Risk Management
The Head of the Marketing Department at JustForex, Stacy stated that JustForex has changed the margin requirements for currency pairs containing GBP from June 6, 2016: "The margin requirements for GBP pairs will be increased 2.5 times. These measures are taken due to the possible significant increasing of the market volatility on the eve of the referendum in the UK. At the moment, we consider these measures as short-term and will inform our clients as soon as the standard margin requirements will be returned. Furthermore, JustForex offers maximum leverage 1:2000 on Classic accounts and 1:1500 on NDD and ECN accounts. The leverage also depends on the ''balance+credit'' amount of the clients' accounts."
"The leverage for XAUUSD, XAUEUR and XAGUSD is always 1:100, despite the leverage you choose. The leverage for the currency pairs which contain CHF is always 2.5 times smaller compared to the chosen leverage. The leverage for the currency pairs which contain RUB and CNH is always 20 times smaller compared to the chosen leverage.''
MAYZUS Brexit Risk Management
According to Ruslans Gizatulins, all clients should refer to the MAYZUS Investment Company Risk Warning and make sure that they are comfortable with the risk of the positions held in light of further expected market volatility:
"MAYZUS Investment Company will be making changes to its margin requirements on all GBP and EUR currency pairs, Equity Index CFDs in advance. Details and time periods of the changes in margin requirements will be stipulated next week. These temporary risk parameters may also persist over the weekend of the 25th and 26th of June 2016, depending on the market reaction to the UK referendum result.
If you have open positions during the affected period, please be aware that margin requirements to keep those positions open, could rise. We recommend that you monitor your positions carefully, and maintain a sufficient account surplus throughout this period, particularly over weekends and before major announcements. We would like you to take this information into consideration while trading. Please ensure you are comfortable with your open positions."
Nord FX CYPRUS LTD Brexit Risk Management
According to George Vakis, ''NORD FX CYPRUS LTD has taken measures to protect its clients from potential volatility associated with the coming BREXIT vote: "Nord FX increased its margin requirements for various currency pairs relating to GBP and EUR, effective from 14th June, 2016.''
Orbex Brexit Risk Management
In response to our inquiry, AtoZ Approved Forex broker Orbex has shared with us their Brexit risk management measures: "Due to the United Kingdom EU Referendum on June 23rd 2016 and the consequences from such an event on the Forex markets such as market volatility possible price gaps and illiquid periods please be advised that as of June 16th 2016 the GBP and EUR crosses margin requirement will be 1:25 and to all other symbols will be 1:100.
Also please note that the Margin level stop out will be at 50% as of Monday 20th June 2016. Please make sure you have adequate funds in your account to support your positions. We strongly advise all our clients who believe this might result in their account(s) being stopped out to fund their accounts immediately."
Spread Co Brexit Risk Management
According to Tammy Leung, Spread Co will be conducting the following risk management activities ahead the EU referendum on the 23rd of June:
- Margins will Change
- Position limits are being imposed
- No GSO’ orders
- Spreads will Widen
Trade360 Brexit Risk Management
In response to our inquiry, the Head of Affiliates at the AtoZ Approved Forex broker Trade360, Gal Ackerman has informed us with the following statement: "The last update received from their Risk Management team at Trade360 is that we will not be changing our margins nor will we limit our investors for trading on GBP pairs. Most importantly, our clients are protected from negative balance, unlike many other brokers. Please note that this is the current statement, which will be updated if anything changes in terms of our risk procedure for the 23rd of June."
XM Brexit Risk Management
The Administrative Officer at XM, Gabor Somogyi informed AtoZForex that XM's clients already have been notified about the adjustments and restrictions closer and during the vote:
"You can find already some adjustments on our website regarding leverage and margin requirements for RUB and CHF pairs, but there might be changes with GBP as well. As we have already informed our clients, that we are monitoring it and if necessary we will make adjustments. We will send more e-mails to our clients towards the end of the week and as we will get closer to this voting, they will be informed about all details on time."
More information will follow...
AtoZForex's investigation into the Brexit Risk management continues, we are adding more to the list of Forex Brokers Brexit risk management strategies, as we're still waiting for the replies of the other brokers in the market. We are convinced that Forex Brokers After Swiss Franc will never be the same and that there is a lot to learn from this issue. If your broker is not present on this list, please check the first list of brokers' risk management strategies or the third list of Forex brokers that don't change their leverage.
Still, if your broker is not present on any of these lists, then immediately contact your broker for an update on what their risk management activities are. Are they adjusting the leverage? Will they limit trading on GBP pairs? Prepare yourself for the market volatility amid a possible Brexit in the United Kingdom.
Your broker is not on the list? Contact AtoZForex editor team now!