New security deposit requirements cap leverage
Felix Shipkevich - February 23, 2009FDMs must collect security deposits of 1% of notional value on major currency pairs and 4% on other currency pairs. FDMs that maintain 150% of their capital requirement will be exempted. The Interpretive Notice cites customer safety as a reason for the leverage restrictions. It also notes that the new standards bring security deposit requirements in the retail forex industry more in line with typical IMM margins.
