The
Australian Contract for Difference (CFD) trading platform Mitrade has
implemented an Excess of Loss Insurance Policy through Lloyd’s of London,
adding to its existing security framework for retail traders.
This places
it among the retail brokers in the sector that, in addition to
regulation-mandated safeguards, offer their clients additional capital protection.
Mitrade’s Client
Protection with Million-Dollar Insurance Coverage
The new
insurance coverage, capped at AUD 1,000,000, applies to qualifying claims in
the event of company insolvency and is provided without additional charges to
platform users. This measure supplements the mandatory protections already in
place under Australian regulatory requirements.
“Australia’s
CFD trading market is built on a strong regulatory framework, continually
evolving under ASIC’s oversight,” said Elven Jong, CEO of Mitrade Australia.
“While these standards offer substantial trader protections, our Excess of
Loss Insurance provides an additional safeguard beyond compliance.”
The
development coincides
with increased retail trading activity in Australia’s forex and cryptocurrency
markets. Industry data indicates growing participation rates among retail
investors, supported by digital platform accessibility and expanding financial
education resources.
“We
understand traders seek enhanced fund security and comprehensive education and
resources to navigate market complexities. Our commitment reflects the broader
industry shift towards proactive trader support, resilience, and risk
mitigation.”
Operating
under ASIC regulation, Mitrade also maintains standard security measures
including segregated client funds and professional indemnity insurance. In
mid-last year, the company also obtained a new license from the Cyprus
Securities and Exchange Commission (CySEC), enabling its entry into the
European Union market.
Who Else Offers Additional
Insurance?
In recent
months, Finance Magnates has reported multiple times on brokers introducing
additional insurance to their offerings. In August 2024, both ATFX and Hantec
Markets launched similar initiatives almost simultaneously.
ATFX
introduced the ATFX Client Funds Insurance, a policy providing coverage for
client funds up to $1,000,000 per claimant. Meanwhile, Hantec Markets offered
protection of up to $500,000.
Additionally,
EC Markets has implemented a similar solution, safeguarding client funds up to
$1,000,000 per claimant.
“Typically,
investor protection funds cover a limited amount. EC Markets’ insurance, by
contrast, extends this coverage up to $1 million per Claimant, providing a
substantial safety buffer,” said Nick Xydas, Group Marketing Director of EC
Markets.
Joining this group in October, VT Markets also
unveiled an additional insurance policy covering the same amount.
Brokers Pay $30,000+ for Enhanced
Client Fund Insurance
In a
conversation with Finance Magnates, VT Markets shared some details about
how these types of insurance policies work.
“The value
of such coverage lies in its ability to address catastrophic events that might
exceed standard fund limits,” said VT Markets.
The
approximate annual cost is around $30,000, and, as seen in the examples above,
most brokers opt for coverage provided by Lloyd’s of London. The bank confirmed
to Finance Magnates that it currently collaborates with around 40 retail
trading companies.
“Each
policy is tailored specifically to the broker’s unique risk profile, client
demographics and operational needs,” Lloyd’s commented. “Customization ensures
that the coverage meets the precise requirements of each firm.”
This article was written by Damian Chmiel at www.financemagnates.com.
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