Brexit, the cause of multiple political turbulence since the 2016 referendum, is having a significant impact on forex brokers this week.
Numerous companies released statements that they will be making changes to leverage requirements. On January 15, 2019, the British lawmakers will vote on Prime Minister Theresa May’s Brexit deal. If the deal comes to pass, the United Kingdom will begin the process of abandoning the EU on March 29, 2019.
VantageFX cuts leverage to 1:50
VantageFX, a leader among Australian forex brokers, informed their clients via email that leverage on GBP/USD, GBP Crosses and UK100 will be reduced from 1:100 to 1:50.
“Market conditions could be extremely volatile prior to and after the event. There is a risk of wide spreads, price gaps and periods of thin liquidity. Vantage FX has conducted a review of our risk management policies with the intention of providing a more secure trading environment for our clients,” said the broker.
The measures will be effective starting from 09:00 am (AEST) on January 14.
Dukascopy reduces leverage to 1:30
Swiss brokerage company Dukascopy is also preparing for Brexit vote by reducing its maximum leverage to 1:30. Starting from January 11, at 18:00 GMT, Dukascopy will increase margins on all GBP crosses and the UK stock index.
More precisely, the broker reduced its maximum leverage to 1:30 for BRENT.CMD/USD, GBR.IDX/GBP, LIGHT.CMD/USD and GBP related forex instruments.
Another broker that prepares for the Brexit-related issue is Admiral Markets. Starting from 9:00 am (EET) on January 15, until midday the next day, Admiral Markets will slash leverage for forex and selected commodities to 1:200.
OctaFX freezes UK subsidiary development
OctaFX, a hi-tech international broker, has halted the development of its UK subsidiary.
The subsidiary is currently in the middle of process of transformation and restructuring. The director of the company is being replaced, and the team behind the company is expecting future regulatory developments related to Brexit.
In the meantime, OctaFX has subsidiaries in the St. Vincent and the Grenadines. Lately, OctaFX has been cooperating with banks in South-East Asia to expand its services in that region.