Exclusive: Markets.com moves away from being a market maker in line with new CySec rulings

Playtech’s Markets.com makes changes to leverage, margin call procedure, margin close-out level and, very interestingly adopts the market execution method in the advent of new rulings from CySec

Markets.com, which is the retail FX brokerge division of Playtech has sent a full and detailed correspondence to its active clients regarding changes in the company’s terms and conditions starting on January 29th this year in line with the new CySEC regulations.

The correspondence is extremely comprehensive and details many changes, including the introduction of a lower default leverage ratio, an amended margin close-out level and, very importantly, whilst Markets.com will continue to operate a method by which orders can be internalized, it is moving from being solely a market maker to include an STP model of execution.

The full extent of the correspondence is as follows:

(a) Regulatory changes

Our home regulator – the Cyprus Securities and Exchange Commission (“CySEC”), is seeking to raise conduct standards across the industry for Contracts for Difference (“CFDs”), to ensure fair outcomes for all clients. This initiative by CySEC is broadly in line with guidelines issued by the European Securities and Markets Authority (“ESMA”) and measures introduced or being planned to be introduced by other European Union regulators.

As an investment firm – broker ultimately controlled by Playtech Plc – a London Stock Exchange, FTSE 250 company, with a current market capitalization of c. GBP 2.6 billion, we consider that the fair treatment of all clients, in a transparent and secure dealing environment, is crucial for generating long term trust from clients. We therefore fully support these regulatory efforts and are taking the below action to address these.

(b) Matters covered by this communication that require your attention

Item NumberOverall descriptionKey notes and Alert*
1Introduction of lower default leverage ratio of 1:50 and the option to select 1:25, 1:100 and 1:200 leverage ratios, based on the underlying instruments and our leverage policy
  • Changing leverage will affect your open positions
  • Existing client trading accounts will continue at current leverage levels unless you choose otherwise
2Restrictions to leverage ratios for Less Experienced retail clients
  • Introduction of definitions for Experienced and Less Experienced Investors
  • As noted in Item 1 above, existing clients can, at their discretion, trade at lower leverage ratios
  • Criteria for mapping of investors from Less Experienced to Experienced
3Negative Balance Protection
  • This feature is already available to all our clients
4Change to Margin Close Out level from 20% to 50%

Change to Margin call notifications at only the 70% level

  • This may affect your open positions at 29 January 2017. Action maybe required
  • Margin call notification feature exclusive for Markets.com Web/Mobile Trader users
  • Clients remain at all times responsible for monitoring the performance of their trading accounts and taking relevant action
5Termination of bonuses
  • Bonuses awarded prior to the effective date (as defined below) will be allowed to lapse and terminate.
6Introduction of Market Execution mode of trading
  • Available for Markets.com Web/Mobile Trader and MT4 users
  • This affects the way you trade with us
7Changes to inactivity fee
  • Change to inactivity fee from USD 5 to USD 10 per month
  • Applies for trading accounts that are inactive for more than 3 months from last trade day
8Revised Best Execution Policy
  • Revised Best Execution Policy that reflects the guidelines set out in the Questions and Answers Document of the European Securities and Markets Authority (“ESMA”) issued on 11 October 2016
  • Amongst others defines the sources of the prices for the underlying financial instruments, the order types and the nature of our spreads and charges
9Revised Conflicts of Interest Policy
  • Revised Conflicts of Interest Policy that reflects the guidelines set out in the Questions and Answers Document of the European Securities and Markets Authority (“ESMA”) issued on 11 October 2016
  • We explain our dealing with you in Principal capacity and how we seek to avoid conflicts of interest
10Introduction of new complaints page on our trading platform
  • Our aim is to enhance your ability to communicate with us as well as the efficiency of our services to you
11Key Investor Document
  • Part of our culture of Treating Customers Fairly. Provides you with summary information on us, our services and obligations to you
12Revised Terms and Conditions of Trading
  • Reflects all the changes set out above as well as a number of other changes introduced by European Regulators

*Refer to full analysis in this communication for all the terms and conditions

(c) Effective date for the implementation of all matters covered in this communication

The effective date for the implementation of all the changes described in this communication is 29 January 2017, unless indicated otherwise herein.

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