Legal DeclarativesGENERAL FRAMEWORK
Leveraged trading is defined as purchase and sale of foreign exchange, commodities, precious metals and other assets to be determined by the Capital Markets Board (CMB), with a specified leverage ratio, according to the regulation. Since leveraged trading is widely known as forex trading, “forex” will be used instead of “leveraged trading” in this document.
Only market maker brokerage firms can provide forex transactions. Market makers should have an equity of at least TL 25 million (Please see note on “Licensing of Brokerage Firms in Turkey” for further details). Banks are not authorized to provide any type of brokerage services in forex.
Forex trading is regulated by the CMB since 31 August 2011.
Brokerage firms must have a separate section on their web sites for leveraged transactions. This section must include;
» Information on the licenses held,
» General information about the main institution if the brokerage firm is White Label or Introducing Broker,
» Potential risks of leveraged trading,
» Information about the platforms used for the transactions, safety precautions, alternative communication methods, order execution processes and protection of personal information.
In addition, once every three months, brokerage firms must announce the ratio of the customers in the black to the ones in the red.
LEVERAGE AND COLLATERAL
The full amount of the leverage used by the investor must be collateralized in cash, in Turkish Lira or a convertible currency.
The parties may freely determine the leverage ratio, but it cannot exceed 100:1. This means, the investor is required to deposit at least 1% of the total transaction value.
For example, in order to trade USD 100,000, the required margin would be at least USD 1,000.
The legislation requires that margins deposited by investors should be kept at the Istanbul Settlement and Custody Bank (Takasbank).
INFORMATION AND STATISTICS
Information on brokerage firms is available on TCMA’s web site. Furthermore, trading volumes and revenues of the brokerage firms on leveraged transactions are published quarterly.
Please see “Brokerage Firms’ Comparative Data” on web site for details.
Communiqué III-37.1 on Principles on Investment Services and Activi-ties, and Ancillary Services
Communiqué III-39.1 on Principles Regarding Investment Activities and Investment Institutions
Communiqué Serial: V, No: 34 on Principles Regarding Capital and Capital Adequacy of the Brokerage Firms
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