Apply for Professional Client Categorisation

The European Securities and Markets Authority (ESMA) has formally adopted new measures on the provision of CFDs to Retail clients in the European Union which took effect on the 1st of August 2018. The measures include significant downsize in leverage, a specific margin close out rule, restrictions on trading benefits, etc.

Being classified as a Professional Client means that the following will apply:

*Professional Clients are not entitled for ICF Compensation²

The European Securities and Markets Authority (ESMA) has published in the Official Journal (OJ) of the European Union the measures on the provision of Contracts for Differences (CFDs) to retail investors that will take effect on 1st August.

Stop out level will become 50% on all Market10 platforms.

From 1st of August 2018 stop out levels will become 50% on all Market10 trading platforms, for all clients.

Clients that have open positions and margin level between 20-50% have the highest probability of reaching stop out levels.

For example:

Account currency= USD, account leverage = 1:50
On 27/07/2018, you go long 1 lot of GOLD at the price of $1,225. The required margin is 2,450 USD ((1*100*1,225)/50) that is (Contract size*Lot Value) / Leverage).
At end of day on 27/07/2018 the account equity is 980USD and thus the margin level is 40 % (= Equity/Margin*100 = 980/2,450*100).

With the current stop out level at 20%, the position will remain open since the margin level (40%) is higher than 20%.¹
On 30/07/2018, the stop out level is increased to 50%, with the account margin level being lower at 40%, the client would already have been stopped out (i.e. the position would have closed).
*1.00 Lot = 100.00 Oz of GOLD

Requirements in order to become a Professional Trader

You can become a professional client if you submit an application and meet among others two out of the three criteria mentioned below³:

1. Trading Volume – You have carried out transactions, in significant size, on the relevant market at an average frequency of 10 per quarter over the previous 4 quarters (with Value Bridge Single Member Investment Services S.A. and/or other providers).
2. Relevant Experience – You have at least one-year experience working in the financial field in a professional position, which requires knowledge of the CFDs market and services.
3. Financial Status – Your portfolio’s size⁴ is equivalent to or exceed EUR 500,000; cash deposits and financial instruments inclusive.

¹ A standardised margin close out rule at the percentage of the minimum initial required margin prescribed above on a per account basis. For professional clients’ trading accounts the percentage is subject to changes.

² The objective of the Investor Compensation Fund (ICF) is to secure claims of Retail Clients through the payment of compensation (up to €20,000) in cases where we default on our obligations to you, if certain conditions are met. Read more here.

³ You can decide whether you wish to submit an application now or at a later stage or even remain to be treated as retail client. Please note that you have the option to revert your status back to retail once you become professional at any time if you wish so.

⁴ Financial instruments include shares, cash deposits made to fund or profits accrued from investing in derivatives, debt instruments and cash deposits. They do not include property, traditional commodity ownership or the notional value of derivative instruments.

You can read more about the product intervention measures of ESMA here and at our Client Categorization Policy here.