What is the background to the new rules?
In August 2019, ASIC announced several proposals which, if adopted, would impact retail clients who trade CFDs.
On 23 October 2020, ASIC announced the final rules, which includes increases to the minimum margin requirements across all CFD markets. These changes will come into effect on 29 March 2021.
There are no immediate changes to your IG trading account.
The rules don't apply to traders who are classified as 'wholesale' and have qualified for Pro, that is, traders who fulfil specified wealth and experience criteria, and elect to be treated as 'wholesale'.
You can find out more about how ASIC’s rules will affect your CFD trading with us below.
How do ASIC's new rules affect you?
Minimum margin rates for retail clients
The below tables detail the changes in margin rates. The increase in margin requirements will apply to new positions from 29 March 2021. CFD positions opened prior to this date will not be impacted.
|Asset class||Current minimum margin rate||Minimum margin rate from 29 March 2021|
|Major forex pairs1||0.5% (200:1)||3.33% (30:1)|
|Major indices2||0.5% (200:1)||5% (20:1)|
|Minor forex pairs1 and gold||0.5% (200:1)||5% (20:1)|
|Minor indices2||0.5% (200:1)||10% (10:1)|
|Commodities (excluding gold)||1.5% (67:1)||10% (10:1)|
|Shares or other underlying assets||5% (20:1)||20% (5:1)|
|Cryptocurrency||10% (10:1)||50% (2:1)|
Examples showing new margin requirements for retail clients:
|Asset||Current minimum margin rate*||Minimum margin rate from 29 March 2021*|
|1 contract AUD/USD||A$500||A$3,333.33|
|1 contract Australia 200 cash (A$25)||A$810||A$8,100|
|1 contract oil - US crude ($10)||A$835||A$5,570|
|1 contract bitcoin ($1)||A$1,725||A$8,550|
|500 shares of BHP Group Limited||A$975||A$3,900|
*Approximate figure based on prices at 26/10/2020
What else is changing for retail clients?
|Margin close-out||If the total funds in your CFD account fall below 50% of the margin required for all your open CFD positions on your account, one or more of your open CFD positions will be closed out as soon as market conditions allow.|
|Negative balance protection||The total losses on your CFD positions will be limited to the funds in your trading account.|
|Prohibition on certain benefits||Benefits including certain gifts and rewards are not permitted to be given or offered to induce a retail client to open or trade on a CFD account, or to deposit funds into a CFD account. Information services, education and research tools are exempted, as are volume based discounts on costs and fees.|
A global leader in online trading
IG firmly supports the implementation of robust and proportionate measures to improve client outcomes across the industry.
We’re here to help you navigate through these changes and continue enabling you to make the most of opportunities in the world’s financial markets. ASIC’s new measures are similar to regulations applied in Europe, Singapore and Japan, and IG remains focused and committed to empowering traders in Australia.
We will continue to operate to the highest regulatory standards and are well placed to adapt and thrive in this regulatory environment.
Pro clients will not be affected by these changes
ASIC’s changes do not apply to wholesale clients.
If you think you may be eligible for Pro and would like to apply to be categorised as a wholesale client, you can elect to do so in My IG or the IG Trading app. You’ll need to answer several questions, so that we can assess whether you fulfil the eligibility criteria. As a Pro client, you will not be entitled to certain protections normally afforded to retail clients. For example, you will not receive a Product Disclosure Statement (PDS), and AFCA (our external dispute resolution scheme) will have discretion to exclude complaints from wholesale clients.
Log in to My IG or the app and follow the prompt, or go to ‘settings’>‘client and account status’ on desktop, or the 'accounts' area in-app.
1 Major forex pairs are those that include two of the following: AUD, USD, GBP, EUR, JPY, CAD, CHF. Minor forex pairs are all pairs not included as a major pair.
2 Major indices include: ASX 200, CAC, DAX, DOW, EuroStoxx, FTSE 100, Nasdaq 100, Nikkei, S&P 500. Minor indices are all indices not included as a major.