Professional Client Application

  • What are the Advantages and Disadvantages of being a Professional Client

    Benefits of being classified as a Professional Client

    • New restrictions imposed by the European Securities and Markets Authority (ESMA) will not affect your account – therefore you will be able to trade using higher leverage.
    • You will still be eligible for the Financial Services Compensation Scheme protection up to £50,000. You may be entitled to claim compensation from this scheme if we cannot meet our obligations with you. This will depend on the type of business and the circumstances of the claim; compensation is only available for certain types of claimants and claims in respect of certain types of business. Eligibility for compensation from the scheme is determined under the rules applicable to the scheme and your rights (if any) to make a claim are unlikely to be directly affected by your categorisation 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:

    • Your money will no longer be held in a segregated account, therefore when you fund your account, the ownership of your funds are transferred to us for the purpose of covering your obligations. Unless we have agreed in writing, we will not hold your money in accordance with the Client Money Rules (CASS) but as cash margin instead.
    • You may lose the right to the Financial Ombudsman Service, unless you are, for example, a consumer, small business, or individual acting outside of your trade, business, craft, or profession. Although Fortrade operates a ‘treating customers fairly’ policy and any complaint will be dealt with by an impartial compliance officer, please remember that a free alternative dispute resolution may not be available to you.
    • Although we ensure that all communication with clients is clear and not misleading, the way in which we may communicate with professional clients (about the firm, our services and products, and remuneration) may be different from the way we communicate with retail clients, in respect of the level of detail and timing of the provision of information
    • When obtaining best execution for retail client orders, the price of the instrument and costs relating to execution are the overriding factors, this may differ for professional clients.
    • You will not be subject to the new leverage restrictions, therefore any profits or losses will be magnified.
    Account Verification Process
  • How do I apply to become 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:

    • You have traded in significant size an average frequency of 10 times in each of the last 4 quarters on CFDs or Forex.
    • You have an investment portfolio of + 500,000 EUR. (Including cash savings / financial instruments)
    • You have worked for at least one year in the financial sector in a professional position, gaining knowledge of CFD and Forex trading. Please provide the following information:
      • Name of employer
      • Position held
      • Length of employment
      • How has this position provided you with knowledge or experience of CFDs / Forex?

     
    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 CriteriaSupporting 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

     
    Application Process

    If you would like to apply to become a professional client, please contact your account representative or our support team at support@fortrade.com or download our Professional Client application form.

    Please complete the application form and email along with supporting documents to professionalsupport@fortrade.com

    Applications are approved and rejected at Fortrade’s own discretion.

    Account Verification Process
  • What is ESMA and their new measures?

    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:

    1. Margin close out level: Positions will automatically be closed if your margin level falls below 50% of the amount required. For example, if you open a position that requires 1,000 USD margin, when that position runs a loss of 500 USD, we will be forced to close your position.

     

    1. Negative Balance Protection – providing assurance that you cannot lose more than you deposit. We already have this in place, so you do not need to worry about any debt with Fortrade.

     

    1. Leverage Limits – The amount of leverage offered to retail clients has been reduced as per ESMA requirements to the following:

     

     

    Asset ClassCurrent Leverage
    (remains for professional clients)
    New leverage from 29/07/2018
    (affecting retail clients only)
    Major FX Pairs200:130:1
    Minor FX Pairs200:120:1
    Gold200:120:1
    Commodities100:110:1
    Major Indices50:120:1
    Minor Indices25:110:1
    Shares10:15:1
    Cryptocurrencies5:12:1

     

     

    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:

     

    LeverageInstrumentSizePriceMargin Required (USD)
    Current Leverage 200:1EUR/USD1 Lot (100,000 Units)1.1824591.20
    Limited Leverage 30:1EUR/USD1 Lot (100,000 Units)1.18243,941.33

     

     

    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.

    • EURUSD
    • GBPUSD
    • USDJPY
    • USDTRY
    • EURTRY
    • USDCAD
    • AUDUSD
    • EURGBP
    • GOLD
    • CRUDEOIL
    • SILVER
    • GERMANY30
    • USA500 (Includingminicontracts)
    • WHEAT

     

    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.

    Account Verification Process
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 84% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.