Warning: in_array() expects parameter 2 to be array, int given in /var/www/html/wp-content/themes/Divi/includes/builder/class-et-builder-element.php on line 1848

Warning: array_merge(): Expected parameter 1 to be an array, int given in /var/www/html/wp-content/themes/Divi/includes/builder/class-et-builder-element.php on line 1897

Warning: in_array() expects parameter 2 to be array, null given in /var/www/html/wp-content/themes/Divi/includes/builder/class-et-builder-element.php on line 1901

Warning: in_array() expects parameter 2 to be array, null given in /var/www/html/wp-content/themes/Divi/includes/builder/class-et-builder-element.php on line 1901

Warning: in_array() expects parameter 2 to be array, null given in /var/www/html/wp-content/themes/Divi/includes/builder/class-et-builder-element.php on line 1901

Warning: in_array() expects parameter 2 to be array, null given in /var/www/html/wp-content/themes/Divi/includes/builder/class-et-builder-element.php on line 1901

Warning: in_array() expects parameter 2 to be array, null given in /var/www/html/wp-content/themes/Divi/includes/builder/class-et-builder-element.php on line 1901

Warning: in_array() expects parameter 2 to be array, null given in /var/www/html/wp-content/themes/Divi/includes/builder/class-et-builder-element.php on line 1901

Warning: in_array() expects parameter 2 to be array, null given in /var/www/html/wp-content/themes/Divi/includes/builder/class-et-builder-element.php on line 1901

Warning: in_array() expects parameter 2 to be array, null given in /var/www/html/wp-content/themes/Divi/includes/builder/class-et-builder-element.php on line 1901

Regulatory Benchmarks

The Australian Securities and Investment Commission (ASIC) has developed seven disclosure benchmarks for over-the-counter contracts for difference (OTC CFDs) to help retail investors understand the risks associated with these products, assess their potential benefits and decide whether investment in these products is suitable for them.
More information about the disclosure benchmarks can be found in ASIC Regulatory Guide 227.
As a provider of OTC CFDs, we provide the below information to explain whether and how we meet and address the benchmarks.
Note the disclosures below are a summary only and should not be relied upon solely. You should refer to our PDS which sets out the information in detail before deciding whether investment in the products and services is suitable for you.
Benchmark 1: Client Qualification
To ensure compliance with the Australian Anti-Money Laundering and Counter Terrorism Financial Act 2006 and ASIC Regulatory Guide 227, EightCap maintains and applies a Client Qualification Policy to ensure all prospective clients have appropriate experience in, or knowledge and understanding in, EightCap’s derivative products.
First, we require applicants to satisfy one of the following criteria:

  • Demonstrate that they have previous trading experience in the same or similar products; or
  • Pass our online qualification test with a score of 70% or greater.

If applicants cannot satisfy one of the aforementioned criteria, then they will not be considered qualified to be a client of EightCap.
We are also required to identify the identity of our clients before we can set up any trading account and therefore require applicants to provide us with certain identification documents.

Benchmark 2: Opening Collateral
EightCap only accepts ‘cleared funds’ from clients as collateral to open a trading account. These cannot be cash equivalents (e.g. no securities as deposits) and can only be funds transfer from client’s bank account or through credit card payment.
EightCap complies with ASIC’s suggested benchmark on Opening Collateral requirements and applies a maximum amount of $1,000 for initial funding if payments are made by credit card.
Benchmark 3: Counterparty Risk (Hedging)
EightCap has a formal Counterparty and Hedging policy that is maintained and updated regularly.
We have assessed the market risk and counterparty risks arising from entering into transactions with customers and hedging counterparties and applied controls to mitigate those risks.
Generally, we may not hedge a client’s position or post the trade straight through (known as straight through processing or STP) and instead set the prices at which we are prepared to deal with clients. In some cases, clients’ trades are hedged by passing the equivalent volume of instrument traded through to aLiquidity Partner (LP), thereby mitigating client’s risk resulting from adverse market movements.
We also conduct regular surveillance of our client-to-liquidity-provider exposure to ensure any discrepancies that may arise are corrected as appropriate. This may from time to time involve bulk purchases of a given currency, security or index with an LP which are generally infrequent and immaterial in size.
EightCap’s hedging counterparties at the time of publication are:

  • ADS Securities L.L.C. (licensed by the Central Bank of the United Arab Emirates)
  • CFH Clearing Limited (authorised and regulated by the Financial Conduct Authority in the United Kingdom)
Benchmark 4: Counterparty Risk (Financial Resources)
EightCap maintains and follows a written policy and procedure to ensure it meets all financial regulatory obligations including the requirements of an Australian Financial Services Licensee.
To mitigate the risks of failing to satisfy the financial requirements under its license and to provide assurance that EightCap has sufficient financial resources at all times, the firm:

  • has established an internal requirement to maintain a capital buffer over and above the external regulatory requirement;
  • measures and monitors the internal buffer and the external financial requirements against the firm’s actual financial condition on a daily basis; and
  • subjects the firm’s financial condition to quarterly scenario tests to assess compliance with the regulatory capital requirements and its ongoing financial needs under stressed conditions.

In fact, we have a dedicated Compliance Officer who monitors our compliance with our licence conditions and ASIC RG 166 (financial) obligations. We also employ independent, external legal and accounting advisers who ensure we meet ASIC requirements and conduct an audit at the end of each financial year.

Benchmark 5: Client Money
EightCap has a detailed and clear policy regarding the use and handling of client money.
Funds received from clients are deposited into segregated bank accounts with Australian Authorised Deposit-taking Institutions (ADIs) and are held separately from business operating funds – EightCap does not use client money for any business purpose – it is solely used for the purpose of maintaining margin that is needed to cover positions opened by clients.
We ensure that we follow and comply with the Australian Client Money Handling Rules and employ strict policies and procedures regarding the maintenance and operation of these accounts.
We currently hold segregated client trust accounts with the AA-rated National Australia Bank (NAB).
Benchmark 6: Suspended or Halted Underlying Assets
EightCap does not allow new positions to be opened when the underlying market is halted or suspended.
We may, in our absolute discretion, cancel client’s order in respect of a Margin FX or CFD transaction which has not yet been opened, or close any open positions where the underlying financial product is the subject of a trading halt, suspension or delisting.
Benchmark 7: Margin Calls
EightCap operates a written policy in relation to margin call practices and its discretions relating to close outs.
All open positions are monitored on a real-time basis, intraday, 5 days per week to ensure changing margin requirements are identified in a timely manner. Typically, all margin calls will be communicated to clients via email and/or the online trading platform.
While this automated margin call process acts as a protection for both client and provider, market volatility, particularly surrounding news events, may result in additional losses. It is clients’ obligation to ensure they are always available to receive and action such margin calls – we cannot guarantee that margin call emails will be received and reserve the full rights to close out client’s positions when margin calls have not been met in order to protect against exposure to further losses.
Have any more questions?
Our support team is here 24 hours a day, 5 days a week.