December 18, 2017 / 9:45 AM / a year ago

Japan's FSA may reduce maximum FX leverage to 10 times

TOKYO, Dec 18 (Reuters) - Japan’s financial watchdog could consider reducing the maximum leverage currency margin trading platform operators can offer to investors to 10 times from the current 25 times, a senior Financial Services Agency official said on Monday.

The official also said the agency would set up a panel to discuss regulations on margin FX trading, popular among the country’s retail investors. Reuters reported on the plan earlier this month.

The FSA is worried about systemic risk, that leveraged positions could put not only traders but also margin trade platform operators at risk if currencies move sharply against their expectations.

The panel plans to come up with a report by next summer, the official told a news conference.

It does not plan to discuss, however, regulations on cryptocurrency exchanges, some of which offer leveraged trading service on bitcoin and some other cryptocurrencies.

Japan recognised cryptocurrency exchanges earlier this year, effectively giving some cryptocurrencies legal status as a means of settlement, helping to boost bitcoin trading among Japanese retail investors.

Reporting by Takahiko Wada, Writing by Hideyuki Sano; Editing by Jacqueline Wong

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