Tom Arran Tom Arran, Monday 9th September 2019, 1:03 PM GMT+0000
CySEC foreign nations, cyprus securities and exchange

New Tiered Leverage Proposed by CySEC

Ever since the introduction of product intervention measures through the European Securities and Markets Authority, there has been a dramatic increase in regulation from authorities across the continent. Recently, the Cyprus Securities and Exchange Commission proposed a series of new leveraged tiers that would defend retail clients. Anybody trading through a CySEC Licensed financial institution would have access to these innovative leverage measures. However, in a marketplace that sees continual changes to regulation, many haven’t come across the newly tiered leverage proposal from CySEC. Considering that Cyprus is the Kingdom of Forex Brokerages, this news shouldn’t be overlooked and should be taken seriously by retail clients trading in the region.

These newly introduced tiered leverages are meant to protect retail clients, investors and professional traders from facing bankruptcy. There’s been considerable pressure against regulating authorities across the European Union to create a more secure environment for those interest in Forex, Blockchain or Cryptocurrency. However, an onslaught of attacks from hackers has resulted in millions being wary of approaching this new finance trading industry. It’s begun to negatively affect trading valuations and profits for countless firms, which were already at an all-time low due to the ESMA’s product intervention measures. It’s for these reasons that the Cyprus Securities and Exchange Commission has proposed a more flexible set of conditions through a tiered leverage system. Subsequently, traders would still be able to trade at leverages higher than 30:1. Creating these newly proposed leverages wasn’t easy for CySEC, who still had to remain in the boundaries of the prior product measures designed by the ESMA. Luckily, loopholes were found that will ultimately encourage retail clients back to the jurisdiction.

The CySEC Tiered Leverage is based around the client’s willingness to risk acquired funds with financial instruments. Clients are assessed through tests that determine which leveraged tier is best for their preferred style of trading. This criterion includes experience, market history, knowledge, annual net worth and yearly income. Tiers are going to be segmented by the various forms of traders which include retail, professional and institutional. Depending on the regular leverages enlisted by clients, those segments will be labelled in the Negative of Positive Category. Being in a positive category means that clients prefer higher leverages, while the negative category guarantee’s lower leverages. Regardless, this method of regulation is perfect for pleasing the ESMA while continuing to offer higher leverages.

Subsequently, this enables the Cyprus Securities and Exchange Commission to accurately assess the products that suit high-risk traders or low-risk clients. Those wanting to receive the high-risk products will be required to trade more than €40,000.00 with an additional €200,000.00 in liquid assets. This would enable higher leveraging at 50:1 with significant currency pairings. However, clients that fall below these figures can only trade with a leverage of 30:1. Additionally, anybody that trades below €5,000.00 yearly will fall to the 20:1 leverage cap. This is per the European Securities and Markets Authority Product Intervention Measures.

Multiple other nations in the European Union are looking to Cyprus with their experimental leveraged tiers. If CySEC can accomplish their goals, then many other European-based authorities will begin to implement the same tiered leverage measures. This wouldn’t be shocking considering that CySEC has always been the innovative regulator, figuring out new ways to keep their blockchain market alive. Authorities have always copied their regulation like the UKGC or MGA.

Additional New Legislation from CySEC

The Tiered Leverages being implemented by CySEC in a few months isn’t the only new legislation coming into effect in Cyprus. The regulating authority is also requiring that operators holding an operational license from the regulator will have to closeout positions on 50% margin calls going forward. Subsequently, this enables clients from no longer having negative balances with incentives in the financial market. It also dramatically lowers risk warnings, which from now on will need to be publicly displayed to clients through blockchain exchanges. Most think this is horrendous, but for the majority of operators, it means a new horizon where one of the most trusted authorities advances complain to new heights.

There are also rumours floating around that indicate the Cyprus Securities and Exchange Commission will be combining PSP Integration with Technological Peripherals. Subsequently, this would enable new versatile features for traders. However, there will be a long period of testing required for newly integrated PSP Peripherals. Like there’ll be prolonged testing with these freshly proposed leveraged tiers. From all accounts, the Blockchain Industries are positively anticipating the 50:1 leverage cap.

The Executive Director of Leveraging with CySEC stated: “Forex regulation requirements keep changing across Europe, and Cyprus is no exception. It is imperative to be aware of the changes and to prepare correctly to the new regulatory environment. We provide a full CySEC license, regulatory preparation and ongoing coverage so that our brokers can always be sure that they comply with the most recent demands”.

Tom Arran

Author: Tom Arran

Tom has over 10 years experience on crypto currencies, first mining bitcoin on an old university computer for 20 cents a coin to now day trading bitcoin in between helping to start whichbroker.com. Tom has previously held roles at a leading EU brokerage and provided insight and consultancy work for number of UK banks in Crypto. Tom Arran can be contacted at [email protected], View all posts by Tom Arran

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