What restrictions are currently in effect due to the current market conditions?
In light of current market conditions, several European regulators, including France’s “Autorité des Marchés Financiers”(“AMF”) and Spain’s “Comisión Nacional de Mercado de Valores” (“CNMV”), have imposed limits on short positions in their respective markets. These newly imposed limits will impact the FRA40 and the ESP35 CFD contracts offered by FXCM.
Effective at market open at 5PM EDT Sunday 22 March 2020 clients will only be allowed to open long position in FRA40 and ESP35; the opening of any new Short Market Order in these instruments will no longer be possible. However, the closing of long positions will still be possible either manually or with a Stop or Limit. Any existing short positions after this date will remain but they may not be increased. Existing Short Entry Orders when triggering will not open a position.
Furthermore, the European Securities and Markets Authority (ESMA) has issued a decision temporarily requiring the holders of net short positions in shares traded on any European Union (EU) regulated market to notify their relevant national competent authority if their net short position reaches or exceeds 0.1% of the issued share capital of such a share (including through the holding of derivatives).
What will happen in an account with hedging disabled?
This will depends on the platform you are using. In Trading Station 2, you will be able to open short positions in order to close existing long positons, so long as the volume is equal to or less than the existing volume of open long positions in that instrument. In MT4, short positions will not be executed even when long positions currently exist; the only way to close long positions will be by right clicking on them and selecting Close Position.
When will these restrictions be reverted?
The current restrictions from the AMF and CNMV are due to expire on the 16th and 17th April respectively. This may change depending on circumstances. We will keep you informed as to any changes.