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New Forex Options Margin Policy (Oct 26th 2015)

Effective 26th October, 2015

Calculation

The FX Expiry Margin model calculates the maximum future loss in a given FX option strategy using the current market prices. If there is an unlimited loss either upwards or downwards (spot price limited to 0), we look at the potential exposure at expiry of these intervals and apply spot margin requirement on the entire notional.

If the strategy has both a maximum loss and an unlimited loss downwards and/or upwards, the margin requirement will be the maximum of the three calculations.

In any case, evaluating the potential outcome of the options, the margin requirement will be capped to the absolute maximum potential exposure multiplied by spot margin requirement. This will ensure that we always have a margin requirement smaller than or equal to the margin requirement of an equivalent spot position.

The calculations are done per currency pair and per expiry.

The model allows for netting with spot if the spot is in the same currency cross as the options. The model allocates any available spot to the option strategy (per expiry and nearest expiry have priority), such that the absolute maximum potential exposure at expiry is minimized. Any spot that is left and is not allocated to an expiry will be margined as a spot position. This means that any remaining spot will have single currency netting with other spot currency pairs in the portfolio.

Collateral

For each expiry and currency pair, we evaluate the net value of an option strategy. If the net value of an option strategy for one expiry is positive, the model will deduct this value from the client collateral. This means that the client cannot use the value of the options for margin trading. If the net value of an option strategy for one expiry is negative, there is no collateral deduction.

Example

EURUSD spot is trading at 1.09, and a client is entering a 1 million EURUSD short call spread at strike 1.10 and at strike 1.11 with expiry in two days. The maximum loss is the difference between the strikes, so 1,000,000 x 0.01 = 10k USD. There is no potential unlimited loss downwards or upwards.

The absolute maximum potential exposure at expiry is 1 million, since this will be the case if the short leg of the spread expires in-the-money and the long leg of the spread expires out-of-the-money. So the margin requirement will be the minimum of the maximum loss (10k USD) and the margin requirement for 1 million spot position.

Had EURUSD spot been at 1.105, i.e. having an unrealized loss of 5k, the margin requirement would be 5k USD (maximum future loss).

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Seize more opportunity with a multi-asset trading platform that offers you a more intuitive trading experience. View market prices on more than 30,000 instruments across FX, CFDs, Futures, Options and Stocks anywhere, anytime on any device – all from a single account.

Previously downloaded apps may experience an automatic update depending on your phone settings.

Lean more about Global TradeStation and sign up to be notified when it goes live here.

Margin Requirement Changes on September 18th 2015

DATE: Tuesday September 15, 2015

Due to changing market conditions, the below FX margin requirements will be updated.

Currency	Current Margin	New Margin	Change
EUR	3%	2%	-1%
GBP	2%	2%	–
USD	2%	2%	–
CHF	5%	3%	-2%
JPY	3%	2%	-1%
AUD	3%	2%	-1%
CAD	3%	2%	-1%
NZD	3%	2%	-1%
SGD	3%	3%	–
DKK	5%	3%	-2%
NOK	5%	3%	-2%
SEK	5%	3%	-2%
HUF	8%	4%	-4%
PLN	8%	4%	-4%
TRY	8%	4%	-4%
ZAR	8%	4%	-4%
MXN	8%	5%	-3%
ILS	8%	6%	-2%
CNH	20%	8%	-12%
HKD	20%	20%	–
CZK	20%	20%	–
RUB	40%	20%	-20%
XAU	4%	4%	–
XAG	8%	8%	–

For any questions about these changes please contact the Bank by phone, or email, or contact your banker.

Future Updates to Margin Requirements

Please review the trading conditions in your online account, or see our general trading conditions page for up-to-date margin requirements and new margin policies here.

Silverlight Charts in GTS WebTrader Will No Longer Work in Google Chrome Browser

DATE: September 1, 2015

As previously communicated, Silverlight chart in DesktopTrader cannot be used in Google Chrome browsers from this month (September 2015).

Global TradeStation Pro Supports Windows 10

DATE: September 1, 2015

Global TradeStation Pro has been tested and is officially on the new Windows 10 Operating System.

French CAC 40 Stock Options Now Available

DATE: September 1, 2015

Stock Options are now available covering all 40 Stocks in the French CAC 40 Index.

Ticker	Name
AC:xpar	Accor
ACA:xpar	Credit Agricole
AI:xpar	Air Liquide
AIR:xpar	Airbus Group
ALO:xpar	Alstom
BN:xpar	Danone
BNP:xpar	BNP Paribas
CA:xpar	Carrefour
CAP:xpar	Cap Gemini
CNAT:xpar	Natixis
CS:xpar	AXA SA
DG:xpar	Vinci
EDF:xpar	EDF
EI:xpar	Essilor International
EN:xpar	Bouygues
ENGI:xpar	Engie SA
FP:xpar	Total
GLE:xpar	Societe Generale
KER:xpar	KERING
LG:xpar	Lafarge
LR:xpar	Legrand
MC:xpar	LVMH Moet Hennessy Louis Vuitton
ML:xpar	Michelin
MT:xams	ArcelorMittal
OR:xpar	L’Oreal SA
ORA:xpar	Orange
PUBP:xpar	Publicis Groupe
RI:xpar	Pernod-Ricard
RNO:xpar	Renault
SAF:xpar	Safran
SAN:xpar	Sanofi
SGO:xpar	Saint Gobain
SOLB:xbru	Solvay
SU:xpar	Schneider Electric
TEC:xpar	Technip
UG:xpar	Peugeot
UL:xams	Unibail-Rodamco
VIE:xpar	Veolia Environnement
VIV:xpar	Vivendi
VLOF:xpar	Valeo

Stock Options are ideal for strategic stock trading, allowing you to trade almost any market and are particularly well suited to:

Leveraged directional plays with a known-loss potential
Volatility strategies where a stock’s price is expected to move outside a range (either up or down)
Low-volatility strategies where a stock’s price is not expected to move outside a range
Hedging existing portfolios
Revenue enhancing portfolios – writing options against a portfolio to take the premium.

As opposed to warrants, Stock Options offer tighter prices, higher volumes and more transparency. Combination strategies are highly versatile and allow you to trade almost any kind of market you have a view on.

Margin requirement changes on August 25, 2015

DATE: August 25th 2015

Due to the stablization of economic conditions in Greece, Euro Pacific Bank has adjusted margin rates on the specified instruments below.

Margins will be reviewed periodically as developments in market conditions unfold.

CFD INDEX

Instrument	Current Margin	New Margin	Change
AUS200.I	4%	2%	-2%
DJI.I	4%	2%	-2%
NAS100.I	4%	2%	-2%
SP500.I	4%	2%	-2%
DAX.I	5%	3%	-2%
FTSE100.I	4%	2%	-2%
AEX.I	5%	3%	-2%
CAC40.I	5%	3%	-2%
JP225.I	3%	5%	-2%
SMI.I	5%	4%	-1%

FX

Instrument	Current Margin	New Margin	Change
EUR	4%	3%	-1%
GBP	3%	2%	-1%
USD	3%	2%	-1%
CHF	8%	5%	-3%

For any questions about these changes please contact the Bank by phone, or email, or contact your banker.

Future Updates to Margin Requirements

Please review the trading conditions in your online account, or see our general trading conditions page for up-to-date margin requirements and new margin policies here.

Margin requirement changes on Friday July 3, 2015

DATE: JUNE 30th 2015

In light of recent developments in conjunction with the Greek economic crisis, and its potential to drive market gap risk over the coming weekend (Referendum July 5), clients should be aware that the margins on selected instruments will be increased on Friday July 3 2015 at 18.00 CET/16.00 GMT.

Margins will be reviewed again on Monday July 6 after European markets have opened.

Below selected instruments will be affected.

CFD INDEX

Instrument	Current Margin	New Margin	Change
ASXSP200.I	2%	4%	2%
DJI.I	2%	4%	2%
NAS100.I	2%	4%	2%
SP500.I	2%	4%	2%
DAX.I	2%	5%	3%
FTSE100.I	2%	4%	2%
AEX.I	3%	5%	2%
CAC40.I	3%	5%	2%
NI225.I	3%	5%	2%
SMI.I	4%	5%	1%

FX

Instrument	Current Margin	New Margin	Change
EUR	2%	4%	2%
GBP	2%	3%	1%
USD	2%	3%	1%

For any questions about these changes please contact the Bank by phone, or email, or contact your banker.

Future Updates to Margin Requirements

Please review the trading conditions in your online account, or see our general trading conditions page for up-to-date margin requirements and new margin policies here.

Revision of FX Margin and CFD Requirements (January 2015)

Future Updates to Margin Requirements

Please review the trading conditions in your online account, or see our general trading conditions page for up-to-date margin requirements and new margin policies here.

DATE: JANUARY 19th 2015

Following the removal of the floor in EURCHF by the Swiss National Bank on Thursday, January 15th 2015, Global Trading has decided to increase margin requirements across a number of instruments in line with our Liquidity Providers. The changes affect:

New FX margin requirements
New CFD Index & CFD Single Stock margin requirements
Changes to the FX Option margin calculation
FX Option trading in Swiss Franc

After a long period with low volatility across asset classes, we foresee a paradigm shift in the financial markets.

We would like to prepare our clients and signal the need for having sufficient margin to support potentially bigger and more extreme short term shocks. CHF was one example. This week’s potential quantitative easing announcement from ECB and the election in Greece, January 25th, are other such events.

In future we expect our Liquidity Providers to be more dynamic on margin levels depending on the financial environment and calendar such as the increase in margin requirements implemented for CHF in Sep 2014 from 4% to 8%.

As a result, Global Trading will increase margin requirements for the following instruments on Wednesday, 21st of January 2015, at 15.00 GMT / 10:00am EST as follows below.

New FX Margin Requirements

Currency Code	Name	Current Margin*	New Margin
AUD	Australian Dollar	1%/2%	3%
EUR	Euro	0.5%/1%	2%
USD	US Dollar	0.5%/1%	2%
GBP	British Pound	0.5%/1%	2%
JPY	Japanese Yen	0.5%/1%	3%
CHF	Swiss Franc	4%/8%	15%
NZD	New Zeland Dollar	1%/2%	3%
XAU	Gold	2%/4%	6%
XAG	Silver	3%/6%	8%

*The 50% margin reduction offered for the first EUR 300,000 of your investment collateral will be removed.

For the full list of affected Forex contracts, please check your online account (instructions at the bottom of the page under “More Information”.

Corresponding CFDs on FX and Commodities will be increased similar to the above.

New CFD Index & CFD Single Stock Margin Requirements

Ticker	Name	Current Margin*	New Margin
DAX.I	Germany 30	0.5%/1%	2%
SP500.I	US SPX500	0.5%/1%	2%
DJI.I	US 30 Wall Street	0.5%/1%	2%
NAS100.I	US Tech 100 NAS	0.5%/1%	2%
FTSE100.I	UK 100	0.5%/1%	2%
CAC40.I	France 40	0.5%/1%	5%
DEN20.I	Denmark 20	0.5%/1%	5%
DEN20CAP.I	Denmark 20 Capped	0.5%/1%	5%
STOXX50E.I	EU Stocks 50	0.5%/1%	5%
BELG20.I	Belgium 20	0.5%/1%	5%
MDAX.I	Germany Mid-Cap 50	0.5%/1%	5%
HSI.I	Hong Kong Index	0.5%/1%	5%
AEX.I	Netherlands 25	0.5%/1%	5%
NOR25.I	Norway 25	0.5%/1%	5%
SWE30.I	Sweden 30	0.5%/1%	5%
FTSE250.I	UK Mid 250	0.5%/1%	5%
US2000	US 2000	4%	5%
TECDAX.I	Germany Tech 30	0.5%/1%	5%
NI225.I	Japan 225	0.5%/1%	5%
ASXSP200.I	Australia 200	0.5%/1%	5%
SPMIB.I	Italy 40	0.5%/1%	5%
ZA40.I	South Africa	5%	10%
CHINA50	China 50 Index	4%	10%
INDIA50	India 50 Index	4%	10%
SINGAPORE	Singapore Index	4%	10%
TAIWAN	Taiwan Index	4%	10%
PSI20.I	Portugal 20	0.5%/1%	10%
IBEX35.I	Spain 35	0.5%/1%	10%
SMI.I	Switzerland 20	0.5%/1%	10%

*The 50% margin reduction offered for the first EUR 50,000 of your investment collateral will be removed.

For the full list of affected Single Stock CFDs, please check your online account (instructions at the bottom of the page under “More Information”.

Changes to the FX Option Margin Calculation:

The volatility floor value in the Vega Margin requirement will be changed from 10% to 20%. The FX Option margin requirement consists of Delta Margin + Vega Margin, where the Vega Margin is calculated as follows:

Vega Margin = Notional Amount * Vega * Max (Implied Volatility, Floor Value) * Volatility Factor
The floor value in the calculation above will be changed to 20%.

FX Option trading in CHF

Global Trading will resume FX Option trading in CHF after the margin change has taken place on Wednesday in the following crosses: EURCHF, USDCHF, CHFJPY and GBPCHF.

More Information

You can get an overview of upcoming margin and collateral changes in WebConnect and on DesktopTrader:

In DesktopTrader: Click on Account > Reports > Margin & Collateral Changes
In WebConnect: Click on Trading > Margin & Collateral Changes

Please note that the removal of half margin is not included in these overviews.

US Source Income Reporting

Does this apply to me?

If your account earns US source ‘fixed or determinable, annual or periodical (FDAP) income’, Euro Pacific Bank (and Euro Pacific Securities, Inc.) is mandated to report this US source FDAP income to the IRS on your behalf, regardless of your residence jurisdiction.

The United States requires all withholding agents to file an information return, known as a Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding, to report amounts paid to foreign persons that are described under the Amounts Subject to NRA Withholding and Reporting, which includes all Fixed or determinable, annual or periodical (FDAP) income.

IRS EXPANSION OF REPORTING SCOPE

Please note as of January 2017, IRS Section 871(m), has expanded the scope of reporting requirements to include single stock CFDs with a US equity as an underlying asset.

How much does the filing cost?

The cost of filing is $200.00 per account, each year that an account holds investments that pay interest or dividends attributed as ‘US source income’. This means that even if a investment/security has a one-time payment, a filing will need to be made.

This reporting is mandatory and required of all firms offering investments, whereby those investments pay interest or dividends attributed as ‘US source income’. Unfortunately, due to the prohibitive cost of complying, Euro Pacific Bank and Euro Pacific Securities must pass on the cost of these filings to our clients.

Can I avoid this annual filing cost?

If you currently have a Euro Pacific Trader brokerage account and all of your stock positions have been allocated as of January 1, 2020, you will not be assessed an annual filing fee moving forward, as our new brokerage custodian Interactive Brokers1 handles all U.S. Source Income reporting for us.

If you had stock positions migrated from our previous brokerage platform, Global TradeStation (GTS), to Interactive Brokers and those positions have not been allocated to a live Euro Pacific Trader account, we will continue to assess a $200 annual fee to cover the reporting costs and additional overhead.

We therefore urge you to contact our Sales & Trading team to either close or allocate your stock positions as soon as possible, by creating a case or scheduling a call. For the most up-to-date information on the Bank’s reporting requirements to the IRS please review their website directly.

1Euro Pacific Trader is offered by Euro Pacific Securities Inc. (“Euro Pacific Securities”), as an Introducing Broker to Interactive Brokers LLC. Interactive Brokers LLC is the custodian, technology provider, and clearing broker to all transactions executed through Euro Pacific Trader and thus the rates, conditions, and examples shown on this site may be subject to change and differ from what is displayed on Euro Pacific Trader. The rates, conditions, and examples on this site are provided on a best-efforts basis and should not be taken as final.

Euro Pacific Securities will not be held responsible for pricing and conditional discrepancies that may arise in the normal course of offering Euro Pacific Trader. Customers should always review and rely on the conditions that are shown directly on Euro Pacific Trader, and it is the responsibility of all customers to carefully review the conditions of every action before approving execution on Euro Pacific Trader.

Interactive Brokers LLC is a registered Broker-Dealer, Futures Commission Merchant and Forex Dealer Member, regulated by the U.S. Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA), and is a member of the Financial Industry Regulatory Authority (FINRA) and several other self-regulatory organizations. Interactive Brokers LLC does not endorse or recommend any introducing brokers, third-party financial advisors or hedge funds, including Euro Pacific Securities. Interactive Brokers LLC provides execution and clearing services to customers. None of the information contained herein constitutes a recommendation, offer, or solicitation of an offer by Interactive Brokers LLC to buy, sell or hold any security, financial product or instrument or to engage in any specific investment strategy. Interactive Brokers LLC makes no representation, and assumes no liability to the accuracy or completeness of the information provided on this website.

For more information regarding Interactive Brokers, please visit www.interactivebrokers.com.

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CFD INDEX

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Future Updates to Margin Requirements

CFD INDEX

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Future Updates to Margin Requirements

Future Updates to Margin Requirements

New FX Margin Requirements

New CFD Index & CFD Single Stock Margin Requirements

Changes to the FX Option Margin Calculation:

FX Option trading in CHF

More Information

Does this apply to me?

How much does the filing cost?

Can I avoid this annual filing cost?