BOARD
MiFID 2

Gearing up for MiFID 2: our preparations and plea to ESMA

19 September 2017

MifiD 2 – a pan-european piece of financial legislation applies from January 3rd, 2018.

10 years in the making, MifiD 2 builds on its predecessor, “to improve the functioning of financial markets, making them more efficient, resilient and transparent.”

Whilst the overall scope of MiFID 2 is way beyond our scope …

MiFID 2 & Retail Brokerage

But does it affect the retail brokerage industry?

Quite a lot. ESMA, the Pan-european regulator behind MiFID2, has its eyes set on CFDs – intervening using rare legislative prerogatives reserved for “high priority” situations.

Why is that? Because retail trading has grown a lot (the trader movement is strong!). Unfortunately, it’s done so with teething problems that need fixing, pronto. In its statement, ESMA announces regime changes combining (and hopefully harmonising) the various measures introduced by national regulators, including:

  1. Leverage limits,
  2. Guaranteed limits on client losses, and / or
  3. Restrictions on the marketing and distribution of these products.

National strategies so far – our take

If we were in ESMA’s shoes, we’d make retail OTC trading “efficient, resilient and transparent” by forcing CFDs on Exchange, because this would tame the conflict of interest between retail traders and market makers. Without conflict, who would want retail traders blowing up? What would be the point of leverage limits, guaranteed stop-losses or marketing restrictions? (Could this be why IG are working on their own MTF?).

If you want more insight on why, in our view, on Exchange is the only way:

Alas, national regulators haven’t suggested on Exchange for now… so we hope whatever ESMA comes up with overcomes the limitations of:

  1. FCA: Leverage limits (NB the FCA has since delayed policy to follow ESMA)
  2. BaFin: Guaranteed limits on client losses as introduced in Germany…

MiFID 2 – the Darwinex way

In any case, we’re luckily not in ESMA’s shoes (not an easy job!). We’re in our own – and there’s plenty we can – and will – do in the meantime.

Since launching Darwinex broker 3 years ago, we’ve NEVER traded against customers (and NEVER will). Instead, we invest in them. Slowly but surely… the likes of NTI prove that listing independent traders creates an asset, and that investor leverage is the sustainable business model.

And yet, on Exchange or off Exchange, more and more people actively invest their savings. Which unfortunately also means too many gamble away more than they can afford. The problem is: too many quit before learning how to do it. Because that’s bad (for them and for us), we’re re-vamping on-boarding procedures for even more alignment and transparency.

Without disclosing methodology & parameters (this could incentivise people to “game” the system against their own best interest), available leverage for users will depend on:

  1. Proven or proveable experience/training when trading with leverage
  2. Solvency – because no-one should risk capital they can’t afford to lose

MiFID 2 – what it means in practice

NB: all users will be allowed to purchase DARWINs – within their stated risk appetite. This is because DARWINs are comparatively low leverage (rarely more than 5:1)

We will segment the Trading user base using both pieces of information, and transition from:

  1. Inappropriate -> the aspiring traders’ gaps in either or both criteria are too large. We won’t accept his trades until he’s ready (watch out for more news in the educational space)
  2. On transit -> it’s appropriate for the user to trade, but we will restrict the leverage he can deploy
  3. Unlocked -> user has acquired enough experience. We will offer him/her all the leverage available to customers at any given time

We will disclose our internal categorisation to customers so they know where they are in their evolution from “novice” to “maximum” leverage.

In addition to the above segmentation, we will apply two further controls:

  1. For investors: from day 1, the risk management engine tracks Equity at Risk (EaR) for every investor portfolio. Investors can’t buy more exposure than their maximum risk threshold at any point in time – investors can only sell once they reach the maximum threshold
  2. For all customers: we will track customers’ overall P&L (for trading and investing), informing them about it. We will also warn when the threshold is exceeded. And we may withdraw permission to trade if we feel it’s inappropriate for him/her to continue trading

Last, but not least, the restrictions apply to new customers only.

Last News
apalancamiento esma

Bitcoin Cash (XBNUSD) trading suspended until further notice

7 November 2018

The BCH fork on November 15th may create a split in the BCH instrument resulting in two currencies, BCH and BSV. Due to the uncertainly around this event, at Darwinex we’ve decided to suspend opening of any new XBNUSD trades with immediate effect.

As traders trading cryptocurrency CFDs sure know, the BCH fork on November 15th may create a split in the BCH instrument (XBNUSD as provided by our liquidity provider LMAX) resulting in two currencies, BCH and BSV.

Due to the uncertainly around this event, at Darwinex we’ve decided to suspend opening of any new XBNUSD trades with immediate effect.

We’ll contact Darwinex traders with open positions in XBNUSD and recommend them to close their positions because as of November 15th our liquidity provider will stop offering liquidity for XBNUSD for an unknown period of time.

For any questions, please contact us at info@darwinex.com.

End of Daylight Saving Time in Europe (October 28th 2018)

22 October 2018

Please note that Daylight Saving Time ends in Europe on Sunday October 28th 2018 but our MT4 nd MT5 servers’ time is NOT changing until Sunday November 4th 2018 (when Daylight Saving Time ends in the US). This means that there will be 1 week (October 28th through November 2nd) where some markets will open 1 hour earlier than […]

Please note that Daylight Saving Time ends in Europe on Sunday October 28th 2018 but our MT4 nd MT5 servers’ time is NOT changing until Sunday November 4th 2018 (when Daylight Saving Time ends in the US).

This means that there will be 1 week (October 28th through November 2nd) where some markets will open 1 hour earlier than during European Daylight Saving Time (i.e. FX market will open at 21:01 GMT; commodities will open at 22:01 GMT, etc.).

 

Instrument Trading Hours in GMT
FX 21:05 Sun – 20:55 Fri (except 21:00 – 21:01 daily) 
DARWINS 21:05 Sun – 21:00 Fri (except 21:00 – 21:01 daily)
COMMODITIES  
Gold 22:01 Sun – 20:55 Fri (except 20:59 – 22:01 daily)
Silver 22:00 Sun – 20:55 Fri (except 21:00 – 22:00 daily)
Platinum 22:00 Sun – 20:55 Fri (except 21:00 – 22:00 daily)
Palladium 22:00 Sun – 20:55 Fri (except 21:00 – 22:00 daily)
US Crude 22:00 Sun – 20:55 Fri (except 21:00 – 22:00 daily)
Natural Gas 22:00 Sun – 20:55 Fri (except 21:00 – 22:00 daily)
INDICES  
Australia 200 22:00 Sun – 20:55 Fri (except 21:00 – 22:00 daily)
Europe 50 22:00 Sun – 20:55 Fri (except 21:00 – 22:00 daily)
France 40 22:00 Sun – 20:55 Fri (except 21:00 – 22:00 daily)
Germany 30 07:00 – 21:00 (Mon – Fri)
Spain 35 07:00 – 19:00 (Mon – Fri)
Japan 225 22:00 Sun – 20:55 Fri (except 21:00 – 22:00 daily)
UK 100 22:00 Sun – 20:55 Fri (except 21:00 – 22:00 daily)
US SPX 500 22:00 Sun – 20:55 Fri (except 21:00 – 22:00 daily)
US Tech 100 22:00 Sun – 20:55 Fri (except 21:00 – 22:00 daily)
Wall Street 30 22:00 Sun – 20:55 Fri (except 21:00 – 22:00 daily)
US STOCKS 13:31 -19:59 (Mon – Fri)
CRYPTOCURRENCIES 22:00 Sun – 20:55 Fri (except 21:00 – 22:00 daily)

 

Trading hours will return to normal on Sunday November 4th 2018, allowing for the daily candle to close at the end of trading in New York each day which is widely considered the end of the trading day.

As always, at info@darwinex.com we’ll be glad to assist you with any question you may have!

 

apalancamiento esma

Starting October 24th, Fx and XAUUSD swaps will be charged in triple size on Wednesdays

16 October 2018

Please be informed that starting on Wednesday, October 24th 2018, Fx and XAUUSD swaps will be charged in triple size on Wednesdays (instead of Thursdays). Below you can find a brief summary of the different swaps charges for the assets we offer.    Instrument Swaps  FX Daily at 17:00 NY City time (in triple size on […]

Please be informed that starting on Wednesday, October 24th 2018, Fx and XAUUSD swaps will be charged in triple size on Wednesdays (instead of Thursdays).

Below you can find a brief summary of the different swaps charges for the assets we offer.

 


 Instrument Swaps 
FX Daily at 17:00 NY City time (in triple size on Wednesdays*)

Exceptions: USD/CAD and USD/TRY, charged triple size on Thursdays.

Commodities
Gold (XAUUSD) Daily at 17:00 NY City time (in triple size on Wednesdays*)
Rest of Commodities Daily at 17:00 NY City time (in triple size on Wednesdays)
Indices Daily on market close (in triple size on Fridays)
Stocks Daily on market close (in triple size on Fridays)
Cryptocurrencies Daily 17:00 NY City time (in triple size on Thursdays)

*Starting on Wednesday, October 24th 2018.

 

As always, at info@darwinex.com we’ll be happy to assist you!

apalancamiento esma

Choose among several banks when sending funds to your Wallet

13 September 2018

When sending funds to your Wallet via bank transfer, you can now choose among several banks. These banks are: – Santander UK – NatWest – Banc Sabadell London Choose whichever you prefer as the destination bank of your monies. After When clicking “Next”, you’ll receive all the details for the bank transfer on the screen […]

When sending funds to your Wallet via bank transfer, you can now choose among several banks. These banks are:

  • – Santander UK
  • – NatWest
  • – Banc Sabadell London

bank transfer options

Choose whichever you prefer as the destination bank of your monies. After When clicking “Next”, you’ll receive all the details for the bank transfer on the screen and via email.

Amended Trading Hours due to U.S. Labour Day on September 3rd, 2018

30 August 2018

Please note the amended Darwinex trading hours for the upcoming U.S. Labour Day on September 3rd, 2018. All times are in UK (BST) time.    Instrument Trading Hours on September 3rd 2018  COMMODITIES   Gold 23:01 Sun – 17:59 Mon Silver 23:00 Sun – 18:00 Mon Platinum 23:00 Sun – 18:00 Mon Palladium 23:00 Sun – 18:00 Mon US […]

Please note the amended Darwinex trading hours for the upcoming U.S. Labour Day on September 3rd, 2018. All times are in UK (BST) time.

 


 Instrument Trading Hours on September 3rd 2018
 COMMODITIES  
Gold 23:01 Sun – 17:59 Mon
Silver 23:00 Sun – 18:00 Mon
Platinum 23:00 Sun – 18:00 Mon
Palladium 23:00 Sun – 18:00 Mon
US Crude 23:00 Sun – 17:45 Mon
Natural Gas 23:00 Sun – 17:45 Mon
 INDICES  
Japan 225 23:00 Sun – 18:00 Mon 
 US SPX 500 23:00 Sun – 18:00 Mon
 US Tech 100 23:00 Sun – 18:00 Mon
Wall Street 30 23:00 Sun – 18:00 Mon
US STOCKS
All US stocks CLOSED

 

The rest of the assets will trade according to their usual trading time. As always, at info@darwinex.com we’ll be happy to assist you!

UK100 index CFD will be closed on Monday 27th August

20 August 2018

Please note that the UK100 index CFD will be closed on Monday 27th August due to UK Summer Bank Holiday. All other assets will trade according to the usual trading hours. 

Please note that the UK100 index CFD will be closed on Monday 27th August due to UK Summer Bank Holiday. All other assets will trade according to the usual trading hours. 

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73 % of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.