LeapRate Exclusive… LeapRate has learned that retail forex broker AvaTrade has set up a new subsidiary company in Israel under its ATrade brand, and is in the process of moving all of its Israel-based clients accounts to the new subsidiary.
LeapRate was sent a copy of a letter (see below) which was sent out earlier this week to all AvaTrade clients in Israel outlining the changes.
ATrade is a brand which AvaTrade has been using in Israel since 2010. Prior to 2010 AvaTrade had an agreement with the Clal Group, one of Israel’s largest insurance companies and non-bank financial concerns, to let AvaTrade use the popular Clal brand for its operations in Israel.
The new subsidiary will continue to use the ATrade brand.
AvaTrade has made the move is advance of new Israeli regulations set to take effect in July covering different aspects of online trading. The Israel Securities Authority (ISA) has been taking aggressive moves lately to reform the way online (and offline) brokers engage with clients, including the banning of all binary options trading.
Key elements of the new Israeli Forex regulations include:
- No bonuses or other gifts may be granted to clients.
- Deposits by clients can be made by bank/wire transfer or credit card only, not by debit card.
- All brokers must ask clients to view and sign a conflicts-of-interest policy, at least once each year.
- Leverage limits:
- 100:1 on Forex pairs and Gold trading
- 40:1 on Equity Indices
- 20:1 on all other instruments
LeapRate readers will recall that AvaTrade last year agreed to a $105 million buyout by Markets.com parent Playtech PLC (LON:PTEC). However that transaction was called off in late 2015 after it became clear that AvaTrade’s main regulator, the Central Bank of Ireland (CBI), was not going to approve the deal – seemingly because the CBI did not approve of AvaTrade (which has a very clean regulatory record) being owned by a company having online gaming related activities.
The letter sent out earlier this week to all AvaTrade / ATrade clients in Israel reads as follows (translated from the original Hebrew).
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Dear client,
Further to previous updates and in accordance with progress of regulatory regulations, please note!
For the purpose of the commencement of the process of regulation, AvaTrade has established a new Israeli company, under which it will centralize all trading activity of Israeli clients.
In the coming days you will be sent an email asking you to confirm the request to move to the new company via signature and approval of a new customer agreement and a conflict of interest policy as required by the Israel Securities Authority (ISA).
Once the process is completed and subject to prior notice will activate the new company under regulation.
Thanks in advance for your cooperation and we wish you a successful transition and continuing successful trading.
The main changes expected
We would like to bring to your attention the major changes in trade and general conduct:
1. deposits of funds will be made by bank transfer and / or credit card (not debit).
2. leverage of various products will be limited as follows:
- 1: 100 pairs of foreign exchange and gold
- 1:40 indices
- 1:20 remaining goods
* Therefore, the margin required for trades will change deal – please be prepared accordingly.
3. The trading platform allowed in the new company is MT4.
4. Customers will be required to sign a conflict of interests policy anew each year.
5. It will be forbidden to give a gift / bonus to customers.
6. A printed account statement will be mailed to each customer every month (excluding clients requesting it by e-mail).
7. If you want to learn more about the changes expected you are invited to view a copy of the updated regulations at the following address: click here.
For any questions and / or problems you are welcome to contact the service team at 1-700-70-70-27.
Best regards,
The ATrade team