Professional Client Status
How ESMA`s New Guidelines Might Shape Your Trading
On August 1st, 2018, the European Securities and Markets Authority (ESMA) has made a number of changes to the manner in which trading platforms offer leveraged products to retail traders.
By applying for the professional client account with Ainvesting, you could enjoy better trading terms.
You may request a re-categorization as a professional client to avoid the impact of the new European Securities and Markets Authority`s (ESMA) restrictions on retail clients.
To qualify for the professional categorization, you must have the necessary expertise, experience, and knowledge to be capable of making your own investment decisions.
You will also need to comply with at least two of the following three regulatory criteria and provide us with the relevant proof:
You must have carried out transactions, in significant size, in CFDs with an average frequency of at least 10 trades per quarter during the previous year (with us and/or other CFD providers).
Significant size is deemed as a minimum notional value of, for example, $50,000 on currency pairs, indices, and commodities or $10,000 on single stock CFDs.
The average frequency of trades can be at one provider, or a combination of two or more. We will ask you for history statements for trading activity with other CFD providers.
The size of your investment portfolio (held with us and/or other providers) is defined as including cash deposits and financial instruments, exceeds EUR 500,000.
Acceptable examples of an investment portfolio can include: cash savings, stock portfolio, debt instruments, ETFs, trading accounts, and mutual funds.
Unacceptable examples include: company pension, non-tradeable assets, property, luxury cars, jewelry, and notional values of leveraged instruments.
If a portfolio is held with other investment firm, we will ask you for statements from the other party.
You currently work or have worked in the financial sector for at least one year in a professional position that requires knowledge of the transactions or services envisaged.
We will ask you for details of your role, and how it has provided you with sufficient knowledge and experience. We may require you to provide evidence of this if necessary.
Professional Client Features and Benefits
- Higher leverage
PRODUCT RANGE PROFESSIONAL CLIENT ACCOUNT LEVERAGE RETAIL CLIENT ACCOUNT LEVERAGE CFDs on MAJOR CURRENCY PAIRS up to 400:1 30:1 CFDs on NON-MAJOR CURRENCY PAIRS up to 400:1 20:1 CFDS on MAJOR INDICES up to 300:1 20:1 CFDs on NON-MAJOR INDICES up to 300:1 10:1 CFDs on GOLD up to 200:1 20:1 CFDs on COMMODITIES other than Gold up to 200:1 10:1 CFDs on SHARES, ETFs & BONDS up to 50:1 5:1 CFDs on CRYPTOCURRENCIES up to 25:1 2:1
- Priority Service – you receive automatically VIP Platinum Status with us
Professional Client Waived Protections
- Margin and Leverage Limits remain unchanged despite the changes that ESMA introduce for retail clients.
- Mandatory changes to product features which protect retail clients will not be mandatory for you. (e.g. negative balance protection and margin close out levels).
- We will assume you have the relevant knowledge and experience levels to understand the risks of trading leveraged products.
- We may use more sophisticated language when dealing with you as a professional client than we do with our retail clients.
- You will not be covered by the Investor Compensation Fund.
Professional Client Unchanged Protections
- Client money remains segregated from our funds and will be unaffected in the event of our insolvency.
- Best Execution remains unchanged as we owe all our clients a duty of best execution.
- The trade confirmations and history statements remain unchanged and are always available for you in your trading account.
- Key information documents remain available to you.
- You retain the right to request a different categorization at any time. For example, if you wish to be afforded a higher level of regulatory protection.
How to become a Professional Client
The clients defined above may waive the benefit of the detailed rules of conduct only where the following procedure is followed:
- They must state in writing to the Company that they wish to be treated as a professional trader, either generally or in respect of a particular investment service or transaction, or type of transaction or product,
- The Company must give them a clear written warning of the protection and investor compensation rights they may lose,
- They must state in written, in a separate document from the contract, that they are aware of the consequences of losing such protection.
Before deciding to accept any request for waiver, the Company is required to take all reasonable steps to ensure that the client requesting to be treated as a professional trader meets the relevant requirements stated above.
A Client who wishes to be re-classified shall contact our Customer Support at [email protected], and the Company will respond accordingly after reviewing the request.
Professional clients are responsible for keeping the Company informed about any change which could affect their current categorization. Should the Company become aware, however, that the client no longer fulfils the initial conditions which made him eligible for professional treatment, then the Company will take appropriate action.