Margin close-out

COBS 22.5 says the firm must not let net equity in the account fall below 50% of the margin required to maintain the open restricted speculative investments. If it does fall below that level, the firm must close the open position or positions as soon as market conditions allow. Net equity means the client's net profit and loss on open positions plus the deposited margin. The firm must explain how the level is calculated before the client opens a first position, and again before a change to the terms. Making a margin call, or using a discretionary right to close, does not replace this duty. The firm still has to meet the client's-best-interests rule and the best-execution rule when it closes. ASIC requires standardised close-out for retail CFDs. Its 2020 announcement describes that as a circuit breaker before all or most of the investment is lost, and does not restate the percentage in the press release.