Forex Brokers Take Precautions Before Brexit Vote

DailyForex.com Team

The British vote on whether to leave the EU is less than three weeks away but Forex brokers and currency trading banks all over the world are already applying cautionary measures before the anticipated market turmoil.

The changes come in the form of added margins to already existing leveraged accounts or reduced trading amounts and they are being referred to as "?temporary measures" until after the June 23rd vote is tallied up.

OANDA, a Forex and CFD broker domiciled in New York, was one of the first brokers to announce a change in its margin requirements. As of June 17, 2016 margin will be increased to 5 per cent on the GBP pairs (1:20) and to 2 per cent on the EUR pairs (1:50). The company will increase the margin requirements on GBP pairs to only 1:20 for its U.S. clients as they are already limited to 1:50 across the majority of currency pairs, including the EUR/USD.

Company management has already stated to its clients that it will return margin requirement to previous levels on the 24th of June.

In order to deal with the possible Brexit fallout, Saxo Bank, based outside the Danish capital Copenhagen, is recommending to its clients that they put aside 7 percent of their leveraged pound accounts, compared with 2 percent previously. The bank is sending a letter to clients outlining the new requirements on Monday and will implement additional margin increases if volatility increases in light of Brexit.

Vantagefx out of Sydney Australia will be implementing an adjustment to trading conditions to be realized over two weeks, both effective as on Monday open. On Monday, June 13th, margin will be raised to 2 percent with a maximum trade size of 40 lots. Phase 2 will take place on Monday June 20th with the margin increasing to 5 percent and the maximum trade size dropping to 20 lots.

FXCM, a financial service company based in New York, has announced an increase in its margin requirements on pound and euro pairs, starting June 10, with more changes set for June 17. And in a company statement issued Monday, IG Markets Ltd. told its clients that it will be increasing margins on the FTSE 100 and all pound pairs on June 10, with additional increases coming on June 17 and June 22.

Brokers are advising their clients to ensure that they have enough collateral in their accounts to meet the new trading conditions that should be in effect for at least one week following the UK vote.

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DailyForex.com Team
The DailyForex.com team is comprised of analysts and researchers from around the world who watch the market throughout the day to provide you with unique perspectives and helpful analysis that can help improve your Forex trading.
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