The Bahamas are tightening regulations for the Forex market. No more leverage 1: 500

Prohibition of binary options, protection against negative balances, limited leverage and aggressive marketing techniques - another place to move your risky investments disappears. This time, we are in the Bahamas to reduce the scope for speculation.

In recent years, the Bahamas has been a place chosen by many CFD brokerswho wanted to legally offer high leverage on the Forex market (including FxPro). However, there are many indications that this may change in the coming years. Portal Finance Magnates he reached the plans for major changes to the regulations to be introduced in this country.

The biggest changes planned by the Bahamas government:

• leverage limitation to 200: 1 on all CFD assets,
• limiting the leverage on cryptocurrencies (for each will be determined individually),
• trade ban binary options,
• protection against the negative balance of individual investors,
• reducing aggressive marketing tactics.

However, this is not all. The Bahamas Securities Commission will also require brokers to ensure that retail client account equity does not fall below 50%, which is intended to limit the rapid loss of individual investors. Brokers will also have to hire a person who will be personally responsible for complying with the new rules before the commission.

ESMA will be the model in the Bahamas

Firms providing brokerage services will also have to regularly submit accurate reports on the profits and losses of their clients - similar to those previously introduced by ESMA's intervention in the European Union.

However, it was these changes that made brokers open branches in the Bahamas - they wanted to avoid the restrictions introduced. In recent years, many brokers have moved there, and their clients could still use, for example, 500: 1 leverage on currency pairs and thus earn or lose a lot quickly and a lot. However, decision-makers in the Bahamas fear that because of this, their country - which lives primarily from tourism - will simply start to have bad associations. Not only to those who will lose money in Forex, but also to those who hear or read about it.

"The new rules are designed to meet consumer protection requirements and encourage more brokers to choose Bahamas. This leads to growth in the securities industry and the creation of new jobs. But we must not forget that our goal is to help shape the regulatory environment in which industry develops while protecting the Bahamas' reputation. " - said Andrew Rolle, member of the Executive Committee of the Bahamas Investment & Securities Business Association (BISBA) in an interview with the Finance Magnates portal.

Thus, it can be seen that on the one hand regulators want to provide protection to individual investors, but on the other hand they also want their market to be competitive for other countries. Is this compatible? It depends, among other things, on how the plan to reduce aggressive broker marketing works. Because, according to many commentators, this is the problem by which completely inexperienced investors find their way to Forex, who have no chance against the financial sharks, bet on advanced computer programs, which are responsible for more and more trade.

Professional clients will be able to do more

Similar to the European ESMA regulations, professionals in the Bahamas will be able to afford more. A professional client will have to pass a test of specialist knowledge, experience and knowledge of the subject CFDs. To obtain this status, you will need to meet two of the following criteria:

• conduct large transactions with an average frequency of 10 transactions per quarter over the last four quarters;
• have a portfolio worth over USD 500.000;
• work in the financial sector for at least a year.