ISTANBUL Feb 10 Turkey's Capital Markets Board
said on Friday it had lowered the maximum limit on leveraged
transactions for financial markets trading to a ratio of 10:1
from 100:1 in order to limit the risks for investors.
In a statement published in the country's Official Gazette,
the board also set a minimum deposit of 50,000 lira ($13,564)
for such transactions.
"This aims to prevent individual investors being possible
victims of high leverage," the markets board said of the moves,
which go into effect from Friday.
European regulators have been cracking down on financial
spread betting, a fast-growing industry where most retail
investors lose money, in which the most popular product is known
as a contract for difference (CFD).
CFDs let investors bet on both the direction a share price,
currency or other financial product will move in, and the extent
of the change in price.
In Europe, the industry is regulated by European Union rules
which have no caps on leverage. That means investors can take
out bets that are far larger than their initial outlay, offering
greater potential returns but also running the risk of huge
Britain's financial watchdog has proposed a maximum leverage
of 50:1, meaning the exposure taken must not be greater than 50
times the initial outlay.
According to data from Turkey's Capital Markets Association,
the volume of leveraged transactions in the forex market was
$2.96 trillion in the first nine months of 2016. As of October
2016, there were 88 brokerages operating in Turkey, almost half
of them offering leveraged transactions.
(Reporting by Birsen Altayli; Writing by Daren Butler and Nick
Tattersall; Editing by Catherine Evans)