Author: Livia Tay, MY
Last Updated: March 17, 2025
In the world of trading, risk management and the adherence to strict ethical and legal practices are essential for maintaining the integrity of the market and the safety of all participants. As part of the Terms and Conditions (TNC) for using a trading platform, clear guidelines around risk management and prohibited practices are necessary to ensure that clients trade responsibly and ethically. This article provides an overview of the key risk management provisions and prohibited practices outlined in the TNC to help traders understand their responsibilities and the rules they must follow.
Chapter J: Prohibited Trading Practices - Clause 42
-
Risk Warning (Clause 45)
- CFD trading involves high risk, and clients must acknowledge that losses can exceed deposits.
- CFD trading involves high risk, and clients must acknowledge that losses can exceed deposits.
-
Prohibited Trading (Clause 42)
- Arbitrage trading – Exploiting price differences for unfair gains.
- Abusive trading strategies – Market manipulation, scalping strategies that disrupt pricing.
- Misuse of Islamic accounts – Clients found abusing swap-free conditions may have their accounts revoked (Clause 16.2).
-
Event of Default (Clause 37)
3a. If a client violates the agreement (e.g., insufficient margin, fraud, failure to pay fees), Lirunex may:
3a1. Close open positions.
3a2. Terminate the account.
3a3. Impose additional trading restrictions.
Risk management and the prevention of prohibited practices are integral aspects of the Terms and Conditions (TNC) for any trading platform. By adhering to the provisions related to margin, leverage, risk warnings, and ethical conduct, both clients and the platform can maintain a fair, transparent, and secure trading environment. Understanding these rules not only helps protect individual traders but also contributes to the integrity of the overall trading ecosystem.