ESMA (European Securities and Markets Authority)

Product Intervention Measures – Introduced 1 August 2018



Account set up

If you trade CFDs and FX spot, you have been set up with a separate sub-account that appears alongside your existing account. Your existing login details will allow access to all your accounts. From introduction of the new measures by ESMA on 1 August 2018, you can now only open new CFD and FX spot positions in your new sub-account.

Initial and Maintenance margins

As introduced with these measures were two margin requirements: initial margin and maintenance margin. On new positions opened from 1 August 2018, an initial margin is now required, and the amounts are indicated below in the table. Of this initial margin, there is an amount that is required to be maintained to ensure the position is not closed out – this is the maintenance margin. Maintenance margin will always be at least 50% of the initial margin. There is now a hard stop on any position that reaches 100% of the maintenance margin which is calculated on a ‘per account’ basis. Therefore, you can no longer apply margin across accounts.


Example 1:

£10,000 CFD on single stock Vodafone.

Initial Margin: 20% i.e. £2,000 to open the position.

Maintenance Margin: 10% i.e. £1,000. You must maintain £1,000 of the £2,000 initial margin at all times. You will be stopped out of position where you are unable to meet maintenance margin requirement.


Example 2:

Index (major) 1 contract in UK100 CFD with FTSE100 trading at 7,650 is a CFD trade totalling £7,650

Initial margin: 5% i.e. £382.50 to open the position.

Maintenance Margin: 2.5% i.e. £191.25

New Initial and Maintenance margins came in to effect on 1 August 2018.


New margin  requirements:

Asset Class          Current initial margin    New Initial margin          New Maintenance margin

FX (Majors)                        1.5%                                      3.33%                                    1.66%

FX (Minors)                        2.0%                                      5.0%                                      2.5%

Index (Majors)                  2.5%                                      5.0%                                      2.5%

Index (Minors)                  3.0%                                      10.0%                                    5.0%

Gold                                      3.0%                                      5.0%                                      2.5%

Commodity                        2.0%                                      10.0%                                    5.0%

Equity CFD                          10.0%                                    20.0%                                    10.0%


Collateral changes

As introduced on 1 August 2018, collateral for new CFDs and FX spot positions must be held as cash and in the same CFD and FX spot sub-account. You will be unable to hold other instruments as collateral for your new CFD or FX spot positions.


Negative balance protection

Negative balance protection will be applied on all Retail client sub-accounts that open a new CFD or FX spot position.



The above changes apply to all Retail clients. They do not apply to Professional clients, whose account configuration will remain unchanged from its current setting. If you’re uncertain about eligibility or criteria around Professional client status, please find out more on our FAQs page .



New positions

You will only be able to open new CFD and FX spot positions in your new sub-account. We shall contact you in due course regarding the level of funding required within your new CFD and FX spot sub-account.

If you have no existing CFD or FX spot positions, your existing account will no longer be enabled for CFD or FX spot trades.


Existing positions

Existing CFD or FX spot positions will remain open in your existing account, but you will not be able to add to them. You will only be able to reduce or close these positions.

Frequently Asked Questions

These FAQs relate to new Product Intervention Measures being introduced by the European Securities and Markets Authority (“ESMA”) on 01 August 2018.


What if my account is managed on a discretionary or advisory basis?

All changes will apply to your account in the same manner as for all other Retail client accounts. However, on discretionary accounts, your leverage limits will remain in line with your existing mandate and on advisory accounts in line with current recommendations. The levels of leverage currently used on discretionary and advisory accounts are well within the prescribed limits set by ESMA under their product intervention measures.


How do the rules affect my current account/ existing positions?

Existing positions will not receive the negative balance protection. This means that you can lose more than you have deposited and will be liable for any debt resulting from these positions. Existing positions will also not be subject to leverage limits.

You will not be able to add to your existing positions. These can only be decreased until you no longer have a position. All new positions will be opened in line with the new rules.


Can I become a Professional Client?

If you would like us to assess your eligibility, you will need to request so in writing to [email address] and you are required to meet at least two of the following criteria:

(a) You have carried out transactions, in significant size, on the relevant market at an average frequency of 10 per quarter over the previous four quarters;

(b) the size of your financial instrument portfolio, defined as including cash deposits and financial instruments, exceeds EUR 500,000;

(c) You work or have worked in the financial sector for at least one year in a professional position, which requires knowledge of the transactions or services envisaged.

Please note while you will not be subject to leverage restrictions and margin close out rules, you will also not receive negative balance protection as well as further rights that an Elective Professional Clients may lose.