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Turkey’s Capital Markets Board has announced it will restrict maximum leverage on foreign exchange trading from 100:1 to 10:1, the latest crackdown in a regulatory shake up of the industry.

The Turkish regulator said in a statement that it was aiming to prevent individual investors from taking high risks. While many traders seek high levels of leverage because it multiplies winnings, it can also deepen losses.

The CMB will also require traders to place a minimum account deposit of at least 50,000 lira – nearly £11,000 – with both measures taking in effect after 45 days.

Turkey move is the latest regulator to clamp down on the high risk retail trading products, although few have pushed for firm limits on leverage – notably the UK’s watchdog, which has proposed a maximum of 50:1, and the Cypriot regulator, which has made similar limitations but added provision for experienced traders to access higher leverage levels.

Dubai’s financial regulator is expected to announce its own measures soon, according to IG Group.

Copyright The Financial Times Limited 2017. All rights reserved.
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