FX Leverage Cut in Singapore
Singapore saw new regulations come into effect for retail trading as of Tuesday, October 8, 2019. Investors and retail clients in the small nation are now having their leverage rates cute in half, which will surely prompt increase offshore trading in Singapore. These new rules were enacted by the Monetary Authority of Singapore. This authority implemented legislation that prompted the leverage levers to drop from 50:1 to 20:1. These regulations are incredibly similar to the product intervention measures implemented by the European Securities and Markets Authority in 2018. There is a special loophole that will enable standard clients to receive the 50:1 Leverage going forward. However, special permutations must be obeyed to acquire these high leverages.
The specialized loopholes pertain to investors that have become accredited. Those investors can still acquire the 50:1 Leverage. Unfortunately, becoming one of these accredited investors is a difficult task. Traders will be required to have more than $2 Million Singaporean Dollars in personal assets with banking institutions. Those that make more than $300,000.00 in cash every year can also sustain these high leverages.
Most investors aren’t shocked by the new rules implemented by the Singaporean Government. These leverage alterations were anticipated for the last two years, with the Monetary Authority of Singapore debating on the subject matter publicly through the media. The individuals working for MAS have publicly noted that these high leverage pose incredible risk for individuals with low cash reserves.