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 ) 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 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.
