Admiral Markets Pty Ltd, the Australian subsidiary of Admiral Markets Group AS, announced on Friday that it has added a negative balance protection policy – despite it not being mandatory in Australian regulations.
In the European Union, thanks to regulation from the (ESMA) contracts for difference (CFD) providers are required to limit the losses a retail client can sustain by imposing automated negative balance protection.
Basically, it ensures that a trader doesn’t lose more money than the balance on their account. This is even in instances where the market moves quickly.
While this is now a , it is not a requirement in Australia. Nonetheless, Admiral Markets has said that as of October 11, 2018, it will relieve clients of their repayment obligations should their balance fall below zero by returning the negative balance below zero.
The Policy Will Be Applied At Admiral Markets’ Discretion
It should be noted that this will be done at the firm’s discretion – so it may not be applied in all applicable situations – and will only be available for balances ranging from zero to negative AU$100,000 ($71,086). According to the statement from the broker, the move aims to protect its clients from falling into debt due to unsuccessful trades.
“Our new negative balance policy will help give retail clients the peace of mind they need to trade confidently, and is just one of the ways we support our clients’ investment journey.”
“When our clients succeed, we succeed! Negative balance policies help ensure they have the best possible trading experience, and the entire Admiral Markets Group is proud to see the Australian subsidiary taking the initiative to voluntarily add this policy to their offering.”
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