Plus500 Shares Dive 13%, Company Issues Clarification Statement

Shares of online brokerage Plus500 Ltd tanked more than 16 percent at one point as the company is said to be taking a beating due to the Cyprus Securities and Exchange Commission (CySEC CySEC The Cyprus Securities and Exchange Commission (CySEC) is a financial regulatory authority of Cyprus. CySEC is one of the key watchdog authorities for brokerages in Europe, whose financial regulations and operations comply with the European MiFID financial harmonization law.Founded in 2001, CySEC is instrumental in providing licensing and registration for forex brokers and previously binary options providers.CySEC is responsible for a variety of different functions, which includes the supervision The Cyprus Securities and Exchange Commission (CySEC) is a financial regulatory authority of Cyprus. CySEC is one of the key watchdog authorities for brokerages in Europe, whose financial regulations and operations comply with the European MiFID financial harmonization law.Founded in 2001, CySEC is instrumental in providing licensing and registration for forex brokers and previously binary options providers.CySEC is responsible for a variety of different functions, which includes the supervision Read this Term) issuing a circular that clarified some regulatory mandates yesterday.

The circular was issued over a month and a half after the European Securities and Markets Authority (ESMA) published an addition to its Q&A relating to the provision of CFDs and other speculative products to retail investors under MiFID.

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The mandatory implementation of 1:50 Leverage Leverage In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders Read this Term and the removal of bonus promotions that are tied to trading does not appear to be worrying Plus500’s management. The company has issued a statement via the London Stock Exchange clarifying some matters.

According to the firm, the movement in the share price of Plus500 and market speculation following the publication on 30 November 2016 by the Cyprus Securities and Exchange Commission is excessive.

“Plus500 does not believe that the topics covered in the circular will have a material operational or financial impact on the company,” the statement reads.

A couple of points worth stressing: yesterday’s publication by CySEC is merely a clarification of the official action on client withdrawals, bonuses and leverage matters by the ESMA earlier this year; the mandate to default leverage for clients at 1:50 does not constitute a ban on higher leverage levels.