Benefits of being classified as a Professional Client
Protections you lose being classified as a Professional Client
Professional clients are entitled to fewer protections under UK and EU regulators than retail clients. Please note that the following is not a comprehensive list but summarises the protections that you will lose being reclassified as a professional client:
How To Become A Professional Client
If you would like to be classified as a professional client, you must state in writing that you wish to be treated as a professional client and fulfil at least TWO of the following criteria set by the FCA:
Information You Will Need To Provide
In addition to completing the professional client application form, if we cannot confirm you meet the above criteria from your trading activity and account information, you will have to provide the following documents as evidence:
|FCA Professional Client Criteria||Supporting Documentation|
|1. You have traded in significant size an average frequency of 10 times in each of the last 4 quarters on CFDs or forex.||Trade statement from another broker / financial institution of a live account not demo|
|2. You have an investment portfolio of + 500,000 EUR. (Including cash savings / financial instruments)||Bank, broker or investment portfolio statement or a letter from a notary public confirming net worth|
|3. You have worked for at least one year in the financial sector in a professional position, gaining knowledge of CFD and forex trading.||FCA register screenshot, payslip or letter from employer|
If you would like to apply to become a professional client, please contact your account representative or our support team at firstname.lastname@example.org or download our Professional Client application form.
Please complete the application form and email along with supporting documents to email@example.com
Applications are approved and rejected at Fortrade’s own discretion.
New ESMA Regulations
The European Securities and Markets Authority (ESMA) are an independent EU authority that contributes to safeguarding the stability of the European Union’s financial system by enhancing the protection of investors and promoting stable and orderly financial markets. ESMA has introduced new measures on CFDs that will affect all retail clients from 29th July 2018.
These measures include:
|Asset Class||Current Leverage|
(remains for professional clients)
|New leverage from 29/07/2018|
(affecting retail clients only)
|Major FX Pairs||200:1||30:1|
|Minor FX Pairs||200:1||20:1|
How does this affect your trading account?
Due to lower leverage limits enforced by ESMA, you will now need to deposit more funds into your account to open a position of the same size. Example shown below:
|Leverage||Instrument||Size||Price||Margin Required (USD)|
|Current Leverage 200:1||EUR/USD||1 Lot (100,000 Units)||1.1824||591.20|
|Limited Leverage 30:1||EUR/USD||1 Lot (100,000 Units)||1.1824||3,941.33|
Why are CFD Leverages being restricted to retail clients?
Trading CFD products carries a high level of risk and therefore higher leverage levels are not suitable for all traders.
How will this affect my current open positions?
Any positions opened in the below instruments before 29th July 2018 will not be affected by the new leverage limits.
What if I do not meet the criteria?
If you do not meet the criteria to be classified as a professional client, you can still trade more than 290 instruments as a retail client, however your account will have the new leverage limits applied and a margin close out level of 50%.
What can be included in my investment portfolio?
Financial instruments including shares, derivatives, debt instruments and cash deposits. You cannot include property portfolios or notional values of leveraged instruments.
How will I know if my application has been approved or rejected?
We will contact you by email confirming that you will be classified as a professional client or that you will remain as a retail client. Your log in details and account number will remain the same.