Document ID: chunk:federal_register_of_legislation:F2020L01338:body:0:p6
Version: federal_register_of_legislation:F2020L01338
Segment Type: other
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Character Range: 12992–15569

to the limitations in section 1023C of the Act.

       Note 2: Subject to the Court making an order staying or otherwise affecting the operation of the order in section 6, the order will remain in force for 18 months from the day this instrument commences: see subsection 1023G(2) of the Act.

7 Conditions applying to dealings in CFDs in relation to retail clients
(1) The conditions in subsections (2) to (5) are specified for the purposes of subsections 5(1) to (4).
Leverage and margin restrictions
(2) The terms of the CFD must require the retail client to provide an initial margin of at least:
           (a) if the underlying for the CFD is an exchange rate for a major currency pair—3.33% of the notional value of the CFD at the time of issue; and
           (b) if the underlying for the CFD is a major stock market index, an exchange rate for a minor currency pair or gold—5% of the notional value of the CFD at the time of issue; and
           (c) if the underlying for the CFD is a minor stock market index or a commodity other than gold—10% of the notional value of the CFD at the time of issue; and
           (d) if the underlying for the CFDs is a cryptoasset—50% of the notional value of the CFD at the time of issue; and
           (e) if the underlying for the CFD is not referred to in paragraphs (a) to (d)—20% of the notional value of the CFD at the time of issue.
Margin close out protection
(3) The terms of the CFD must provide that if at any time the net equity of the retail client's CFD trading account is less than the aggregate close out protection amount for the retail client's open CFDs at that time that are connected to that account, the CFD issuer must, as soon as market conditions allow, terminate one or more of the following:
           (a) the retail client's open CFDs that are connected to the retail client's CFD trading account and that were issued on or after 29 March 2021;
           (b) any other of the retail client's open CFDs that are connected to the retail client's CFD trading account and that are specified in the terms of the CFD for the purposes of this subsection (3);
           until the time (later time) at which the first of the following occurs:
           (c) the net equity of the retail client's CFD trading account being equal to or greater than the aggregate close out protection amount for the retail client's remaining open CFDs at the later time that are connected to that account;
           (d) all the following being terminated:
              (i) the retail client's open CFDs that are connected