Changes for retail clients: what you need to know
The SCB is changing the way we can offer our products to retail clients of Pepperstone Markets Limited. We’ve summarised these changes below.The good news is you can choose to classify as Pepperstone Pro to continue trading with up to 500:1 leverage. See below for details.
Changes to leverage caps
As a result of the SCB changes, the following products will have their leverage changed from current available levels and be capped at a maximum of 200:1:
- FX products
- Commodity products
Compulsory margin close-outs
From 25 July 2021, if the funds you hold in your account fall to less than 50% of the margin required for all of your open trades, then we'll be required to close out positions.
Important: any existing positions opened prior to 25 July will also be subject to the new 50% margin close-out requirement. This means that you may need to deposit more funds into your account to cover the additional margin required and avoid your positions being closed-out. It's your responsibility to be aware of your margin requirements and continue to monitor your positions.
To see examples of how your positions may be impacted, visit our dedicated Support page.Negative balance protection
As a retail client, we’ll provide you with negative balance protection to limit the losses you can incur when you trade with us to the funds available in your CFD trading account.
Prohibition on inducements
We're prohibited from offering certain inducements to retail clients (for example, cash bonuses or 'free' gifts like iPads). Discounts on costs and fees, information services or research tools will still be allowed.
Will I be affected?
The SCB changes will impact retail clients only, not Pepperstone Pro clients. If you choose to be classified as an Elective Professional Client or “Pepperstone Pro”, you’ll be able to trade up to 500:1; however, you’ll lose some retail protections which you should consider. Full details are available in your Secure Client Area.
How do I become a Pepperstone Pro?
This is a self-certification process that only takes a few minutes, which is available in the Secure Client Area. You’ll have to complete a short quiz to demonstrate that you meet the eligibility criteria. You'll need to self-certify that you meet two of the following three criterion:
- Your experience in trading leveraged trading (financial derivative or OTC) products
- Your cash deposits and trading portfolio exceed USD$500,000
- Your professional experience working in the financial services sector
to classify as Pro today.
What will change if I classify as a Pepperstone Pro?
- You’ll be able to trade with leverage up to 500:1
- Your margin close-out level will be set a 20% (vs 50% for retail on MT4/5 (cTrader margin close-out will remain at 50%)
- You’re not guaranteed negative balance protection; however, you may be eligible for a once-off negative balance protection of up to USD$100,000
- You won't receive the same risk warnings or disclosures that you'd receive as a retail client
- We'll rely on your knowledge and experience as a Pepperstone Pro to demonstrate your understanding of the risks of trading our products
You can visit the Securities Commission of Bahamas website to view the SIR CFD Rules (2020) regarding Elective Professional Clients here.
Will anything else change on my account?
All other trading conditions, account features and functionality remain the same. Your funds will continue to be held in a segregated trust account with a Tier 1 global bank.
If you have any questions, please get in touch at pro@pepperstone.com.