New ASIC regulations

Changes to how CFDs are traded by retail clients were introduced on 29 March 2021.

Here you can find out how the new rules affect your trading.

Start trading today. Call 1800 601 799 or email newaccounts.au@ig.com. We’re here 24 hours a day, except from 7am to 5pm Saturdays (AEST).

Contact us: 1800 601 799

Start trading today. Call 1800 601 799 or email newaccounts.au@ig.com. We’re here 24 hours a day, except from 7am to 5pm Saturdays (AEST).

Contact us: 1800 601 799

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.

In October 2020, ASIC announced the final rules, which includes increases to the minimum margin requirements across all CFD markets.

These came into effect on 29 March 2021 for both clients contracting with Australia and New Zealand.

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'.These rules also apply to clients contracting with New Zealand.

You can find out more about how ASIC’s rules affect your CFD trading with us below.

How do ASIC's rules affect you?

Minimum margin rates for retail clients

The below tables detail the changes in margin rates. The increase in margin requirements apply to new positions from 27 March 2021. CFD positions opened prior to this date are not impacted.

Asset class Previous minimum margin rate Minimum margin rate from 27 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 Previous minimum margin rate* Minimum margin rate from 27 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?

New rule Description
Margin close-out If the total equity of 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 are 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.
Binary products Binary products, including digital 100s and sprint markets, will no longer be available to retail clients from 3 May 2021.

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 measures are similar to regulations applied in Europe, Singapore and Japan, and IG remains focused and committed to empowering traders in Australia and New Zealand.

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.

FAQ

ASIC’s measures are broadly consistent with measures implemented in many overseas markets particularly in Europe. Their intention is to better regulate leverage products offered to retail clients. IG firmly believes in the implementation of robust and proportionate measures to improve client outcomes.

The ASIC measures will be implemented from 29 March 2021.

These measures only apply to retail clients, so those clients who are categorised as Wholesale and trade through a Pro account will not be impacted.

Clients can choose to elect to be categorised as a wholesale client if they meet the legal requirements. The Corporations Act 2001 allows clients with sufficient Experience or Wealth to qualify as a wholesale client.

More information can be found at: https://www.ig.com/au/professional

The benefits of an IG Pro Account can include lower margins and cash rebates. But, it’s important to note that as a wholesale client, you may not be afforded the same protections under the Corporations Act 2001 as what you would have had as a retail client. Such protections include (but are not limited to) the issuing of a Product Disclosure Statement (PDS), and the ability for AFCA (IG’s external dispute resolution body) to refuse to consider complaints from wholesale clients.

IG has delivered a sustainable business for more than 45 years by placing good client outcomes at the heart of everything it does. IG’s business model ensures that its interests as a business are aligned with the interests of its clients, which sets it apart from others in the industry.

IG will continue to lead the way in the industry, and the business is well placed to manage regulatory change as we have already shown leading into, during and after the European regulatory changes and continue to deliver sustainable growth.

The leverage restrictions will only apply to new positions opened after the implementation date. The only change impacting existing positions is if you trade using guaranteed stops or bought options, then you will be subject to the new margin close out rules (see question 6 & 7).

When we calculate account equity today, we do not currently include running losses on positions with guaranteed stops. Under the new rules, running losses on positions with guaranteed stops will be included as part of the Margin Close-Out calculation. Accordingly, positions with guaranteed stops will now be subject to new Margin Close-Out rules. This means that if you have a Limited Risk account, you will have an ongoing margin obligation from 27 March 2021.
The margin requirement for long option positions is the greater of the maximum risk or the underlying equivalent. The margin and profit or loss on these positions will now be included as part of the Margin Close-Out calculation (in the same way as guaranteed stops). Offsetting options positions will no longer be eligible for a margin reduction.
When retail clients’ futures contracts rollover and a position is opened after the ASIC implementation date, then the new position will be margined basis the new ASIC minimums.

Australian resident:

Australian resident will only be eligible to contract with our ASIC licences.

Emerging Markets clients (from non- EU countries and non-office countries):

Yes, as you are not a resident of Australia you can consider our other entities. We have a specific offering for clients from countries where we don’t have an office and you may elect to migrate to this licence.

Yes, the new margin requirements will apply to Limited Risk positions. The minimum margin on a LR position will be those set by ASIC. Your required margin can still be greater than this however if your stop is further away than these minimums.

No retail clients will no longer be able to reduce your margins by placing a guaranteed or nonguaranteed stop.

This will still be available for Pro clients.

No. For retail clients long and short positions will need to be fully margined after the rules are implemented.

Existing positions that you have open prior to the rules coming into force will be unaffected.

This will still be available for Pro clients.

Unfortunately, we will no longer be able to offer collateral to retail clients. This will still be available for Pro clients.

Retail clients will no longer be eligible for volume-based rebates. Pro clients will continue to have access to rebates. Rebates earned before 29th March will still be paid as per normal.

As New Zealand clients' CFD accounts are held with the Australian office of IG Markets Ltd, ASIC's new regulations will apply to New Zealand clients.

As binaries are offered as part of our CFD account you would need to have the required CFD experience to qualify for Pro/Wholesale. Binary trades do not count towards this required experience.

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.