Abstract

The Japanese government amended laws and decrees on financial instruments trading of the Cabinet Office last year. According to the amended law, from August 1, 2011, if the margin a client entrusts with a dealer doesn’t reach 4% or above of the turnover, the dealer cannot provide Fx trading service to the client. The so called “4% or above of the turnover” means the upper limit of the leverage ratio becomes 25 times.

1、Scope of restriction object

The object of the restriction on margin trading is individuals that civilly enjoy rights and undertake obligations according to law (including professional investors).

Method
Download relevant documents from our homepage, fill out necessary items, send them to us by fax, mail or email.

See http://www.easthillfx.co.jp/fx/en/x7.htm

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 FX trading conditions:

① remittances amount to be the first of 500,000 Japanese Yen or more than 5,000US Dollar
　　(Mini accounts: 50,000 Japanese yen or 500US Dollars)

② the necessary margin(Effectived From 12th Sep 2011 ): 　　　
　　1% of the Turnover,

③ auto Liquidation on the system see here

※ If the customer-specific financial institutions or investors, it would be prior consultation with the Company to change the above
　　 terms and conditions.

※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.

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 Fx 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 Fx trading account
      You cannot open a new position when the variation margin is less than the necessary margin for opening a position.

②Once every trading day
   At the time of rollover 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.

Necessary margin for opening a position: Turnover (Open price x Currency unit ) x4% in case of opening a new position.
Necessary margin for maintenance at rollover: Turnover (Close price x Currency unit ) x4% in case of maintaining a position.
Necessary margin for maintenance beyond rollover: Turnover (Market price x Currency unit ) x4%.

※Margin maintenance rate= Effective margin/Necessary margin
※Maintenance rate of necessary margin for maintenance = Effective margin/ Necessary margin for maintenance

Effective margin: Margin balance plus/minus floating profit/loss, equal to the amount of net assets in the Fx trading account.

For example, when the effective margin is 40,000 Japanese Yen, you buy 1 lot of US Dollar against Japanese Yen at 95.30 in a mini account, and the close price at rollover is 94.50:
①Effective margin when opening the position =40,000 Japanese Yen
②Necessary margin for opening a position= 95.30×10,000 (mini account) x 4% (margin restriction rate)x 1 lot=38,120Japanese Yen
③rollover = 40,000-(95.30-94.50)×10,000 (mini account) = 32,000 Japanese Yen
④Necessary margin for maintenance＝94.50×10,000 (mini account) x 4% (margin restriction rate)x 1 lot=37,800Japanese Yen

When the new position is set up, the effective margin (40,000 Japanese Yen) is more than the necessary margin for opening a position (38,120 Japanese Yen), so the position can be opened. However, the effective margin at rollover (32,000 Japanese Yen) is less than the necessary margin for maintenance (37,800 Japanese Yen), so the position will be forced to close.

When you hold a short position and a long position of the currency, 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 US Dollar against Japanese Yen at 95.30 in a mini account and then sell 1 lot of US Dollar against Japanese Yen at 95.33.
①Turnover of the long position: 95.30×10,000 (mini account) x 1 lot = 953,000 Japanese Yen
②Turnover of the short position: 95.33×10,000 (mini account) x 1 lot = 953,300 Japanese Yen

Then, 953,300 Japanese Yen, turnover of the short position, will be the standard for calculation the necessary margin for maintenance. That is, the turnover is 953,300×2%×2×1lot＝38,132Japanese Yen.

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.