The uncertainty surrounding the upcoming EU Referendum in the UK (Brexit) on June 23, 2016 has the potential to generate increased volatility and turbulence in the financial markets.
The referendum will take place in the UK to determine whether the British population wishes to maintain their European Union membership or not.This major political event is expected to affect the financial markets and may result in high volatility, price gaps/spikes, lack of liquidity, widened spreads or other movements in the markets.
In order to protect our clients and the Company, we will lower the leverage for the whole referendum week. This change will affect both existing and new orders.
Starting from market open on June 20 until market close on June 24, our standard leverage rates will be reduced as follows:
Accounts that do not have a standard leverage setting will have their leverage changed by the same proportion as indicated above.
Depending on the market conditions, we may enforce close-only regime for certain currency pairs or indices. Large accounts that accumulate substantial market exposure may see their account leverage lowered further, subject to prior warning.
Please also consider that Bid/Ask spreads will most likely be considerably wider during market volatility, which could affect even hedged positions.
Because of this change, you may need to close trades or add funds to your account or risk a possible margin closeout if you currently have an open GBP, EUR or UK100 positions with higher levels of leverage and do not have enough funds in your account to cover the increased margin requirements. We strongly advise you to perform the necessary funding actions well in advance, in order to ensure your account will be well funded before the leverage is lowered.
The affected pairs will return to prior leverage levels after the market close on June 24, 2016.Publication source