| On Implementation of Restrictions on Commodity CFD Trading |
| Abstract |
| The Japanese government amended laws and decrees of MAFF and METI. According to the amended law, from July 1, 2011, if the margin a client entrusts with a dealer doesn’t reach 5%※1 or above of the turnover, the dealer cannot provide Commodity CFD trading service to the client. The so called “5% or above of the turnover” means the upper limit of the leverage ratio becomes 20 times. |
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| 1、Scope of restriction object |
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| The object of the restriction on margin trading is individuals that civilly enjoy rights and undertake obligations according to law . |
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| 2、Restriction on corporate clients |
Ⅰ corporate account (Margin Restriction)
Corporate Account (Margin Restriction) of corporate clients, also applies to the Act. However, for the 5% margin trading restrictions can apply for exemption. After exemption the corporate accounts trading conditions is same with the corporate account BULL (Margin Restriction exempted). |
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| Method |
| Download relevant documents from our homepage, fill out necessary items, send them to us by fax, mail or email. |
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| See http://www.easthillfx.co.jp/fx/en/x7.htm |
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Ⅱ corporate account BULL (Margin Restriction exempted)
To apply for corporate account BULL (Margin Restriction exempted) , please applicate informaition from our website.
It applies to the leverage is higher than the Margin Restriction account, you may further increase price fluctuation risks.
Corporate Account BULL (Margin Restriction exempted) of Commodity CFD trading conditions: |
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① remittances amount to be the first of 500,000 yen or more than 5,000US Dollar (Mini accounts: 50,000 yen or 500US Dollars)
② the necessary margin(Effectived From 12th Sep 2011 ): |
| 1% of the Turnover, |
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③ auto Liquidation on the system see here
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※ If the customer-specific financial institutions or investors, it would be prior consultation with the Company to change the above terms and conditions.
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| ※Please understand we may not be able to complete your application in your expected time due to formalities, so we hope you can make sure you have plenty time for the application. |
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| 3、Our response to the restriction on margin trading |
| ①About opening a new position |
| ⅰTo open a new position when you hold no position in the Commodity CFD trading account |
You cannot open a new position when the effective margin is less than the necessary margin for opening a position . |
ⅱTo open a new position when you already hold a position in the Commodity CFD trading account
You cannot open a new position when the variation margin is less than the necessary margin for opening a position. |
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| ②Once every trading day |
At the time of close on each trading day, if the effective margin is less than the necessary margin for maintenance , we will not ask for variation margin, but we will enforce you to close all or part of your positions. |
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| Necessary margin for opening a position:Turnover (Open price x Contract size) x5% in case of opening a new position. |
| Necessary margin for maintenance at close：Turnover (Close price x Contract size) x5% in case of maintaining a position. |
| Necessary margin for maintenance beyond close: Turnover (Market price x Contract size) x5% |
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| 4、Notes about margin |
| ※Margin maintenance rate= Effective margin/Necessary margin |
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| Please note: If you have some positions in several markets, after closing one of your position, the deposit maintenance rate doesn't correspond to the actual rate. |
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| ※Maintenance rate of necessary margin for maintenance = Effective margin/ Necessary margin for maintenance |
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| Effective margin: Margin balance plus/minus floating profit/loss, equal to the amount of net assets in trading account. |
| Necessary margin: Necessary margin for opening a new position. |
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| Necessary margin= Open price x Contract size x5% |
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| ※At the time of close, the open price will change to the close price in the calculation of necessary margin for an existing position, so after close Necessary margin for an existing position= Close price x Contract size x5% |
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| Necessary margin for maintenance: Necessary margin for maintaining an existing position at the time of close. |
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| Necessary margin for maintenance beyond close: Turnover (Market price x Contract size) x5% |
| Necessary margin for maintenance at close: Turnover (Close price x Contract size) x5% |
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5、Calculation of margin trading |
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| ⅠIn general cases |
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| For example, when the effective margin is 100,000 Japanese Yen, you sell 1 lot of XAUUSD(Gold) at 1450.3 in a mini account(USDJPY realtime rate83.50.), and the close price at close is 1500.5(USDJPY close rate84.50.): |
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| ①Effective margin when opening the position =100,000 Japanese Yen |
| ②Necessary margin for opening a position= 1450.3×10Troy ounce(mini account) x5%(margin restriction rate)×83.50×1(size)＝60,550 Japanese Yen |
| ③close =100,000-(1500.5-1450.3)×10 Troy ounce (mini account) ×84.50=57,581 Japanese Yen |
| ④Necessary margin for maintenance＝1500.5×10Troy ounce(mini account) x 5% (margin restriction rate)×84.50×1(size) ＝63,396Japanese Yen |
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When the new position is set up, the effective margin (100,000 Japanese Yen) is more than the necessary margin for opening a position(60,550 Japanese Yen), so the position can be opened. However, the effective margin at close (57,581 Japanese Yen) is less than the necessary margin for maintenance(69,396 Japanese Yen), so the position will be forced to close. |
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| ⅡIn case of hedge position |
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| When you hold a short position and a long position of the product, the necessary margin for maintenance will be calculated based on the turnover of the short position or that of the long position, whichever is greater. |
| For example: You buy 1 lot of XAUUSD(Gold) at 1450.3 in a mini account and then sell 1 lot of XAUUSD(Gold) at 1460.3(USDJPY realtime rate 83.50.) |
| ①Turnover of the long position: 1450.3×10Troy ounce (mini account)×83.50＝1,211,001 Japanese Yen |
| ②Turnover of the short position: 1460.3×10Troy ounce (mini account)×83.50 =1,219,351 Japanese Yen |
| Then, 1,219,351 Japanese Yen, turnover of the short position, will be the standard for calculation the necessary margin for maintenance. That is, the turnover is 1,219,351×2.5％×2×1＝60,968 Japanese Yen. |
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| 6、Existing position and existing limit order |
| All accounts are within the scope of this implementation. Existing positions and existing limit orders before implementation are all object of the implementation. |
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| 7、Date of implementation |
| Implemented from June 27, 2011. |
| ※Please see detail at METI. |
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