The government is working on a new regulation to prevent Turkish citizens from investing in leveraged foreign exchange markets through firms based abroad, Deputy PM Nurettin Canikli said.
Canikli said the Turkish government was fully entitled to introduce laws to bar its citizens from executing transactions via forex brokers operating outside the country.
“There will be legislative efforts over the following days. If Turkish citizens visit -- without permission -- an internet site or domain abroad, which provides foreign exchange trading services, we will block access to those sites," Canikli said.
"We will not allow any such access which would mean bypassing a regulation in place."
The Capital Markets Board of Turkey had announced on Feb. 10 a new set of measures in a bid to protect small investors from high FX volatility in markets. Accordingly, traders are now required to place a minimum account deposit of 50,000 Turkish liras ($13,400), while maximum leverage has been restricted to 10:1.
Leveraged FX trading enables investors to trade in amounts much higher than their current deposits. But high leverage in these markets is risky business, which usually results in small and novice investors losing all their deposits.
The profit/loss ratio of FX trading accounts has been around 4:1 recently.