1. Purpose and scope
This Policy explains how GCC Brokers treats a trading account whose equity falls below zero — a "negative balance" — and the limited circumstances in which the Company absorbs that shortfall.
It forms part of, and must be read together with, the Client Agreement (Terms & Conditions), the Risk Disclosure and the Weekend Risk Policy. Where this Policy and the Client Agreement conflict, the Client Agreement prevails.
This Policy applies to retail clients of the Contracting Entity with which you hold your account. It does not apply to professional or institutional clients, or to accounts operating under separately agreed terms.
2. How a negative balance arises
Trading on margin means your losses are not limited to the funds you have deposited. Where the market moves sharply against an open position — in particular across a weekend gap, a news event, or a period of thin liquidity — prices can move past the level at which your position would ordinarily have been closed. Your position may then be closed at a materially worse price than the stop-out level, leaving equity below zero.
A negative balance is a debt owed by you to the Company.
3. The protection
Where a retail account is left with a negative balance, the Company will automatically credit the account to bring the balance to zero, up to a maximum of USD 100 (or the equivalent in the account's currency) per occurrence.
This adjustment is applied automatically. You do not need to request it, and no application or correspondence is required.
4. Beyond the threshold
Any shortfall exceeding USD 100 is not written off. It remains payable by you in full.
Where a negative balance exceeds the threshold, the Company will:
- retain the debit balance on the account;
- notify you of the amount outstanding;
- be entitled to set that amount off against any funds or credits held in any other account you hold with the Company; and
- be entitled to demand payment and to pursue recovery of the debt through any lawful means, including legal proceedings and the recovery of the Company's costs of doing so.
The Company may, at its sole discretion and without setting any precedent, reduce or waive a shortfall in an individual case. Any such decision is made without admission of liability and does not create an entitlement in any other case or for any other client.
5. Your responsibility
Negative balance protection is a limited backstop against an exceptional outcome. It is not a substitute for managing your own risk, and it does not transfer responsibility for your positions to the Company.
You remain solely responsible at all times for:
- maintaining sufficient margin to support your open positions;
- monitoring your account, particularly ahead of market closures and scheduled economic events;
- setting and maintaining any stop-loss or other risk controls you consider appropriate; and
- responding to any margin or risk notice the Company sends you.
The Company does not monitor your account on your behalf, does not provide investment advice, and gives no assurance that any position will be closed at any particular level.
6. What the Company does to reduce the risk in advance
The Company operates a number of measures intended to reduce the likelihood of a negative balance arising. These are applied at the Company's discretion, for the protection of the Company and its clients generally. They are precautionary, they are not guarantees, and the absence of any measure in a given instance does not create liability on the part of the Company or relieve you of your obligations.
Those measures include:
- automatic stop-out of positions when the account's margin level falls to the stop-out level applicable to it — with a margin call raised at an earlier level as a warning;
- pre-weekend margin monitoring, and notice to clients whose free margin is thin relative to their open exposure, as described in the Weekend Risk Policy;
- adjusted margin requirements on individual instruments, account types or groups, including ahead of weekends, holidays and scheduled events of expected volatility;
- hedging or reduction of exposure on an account that has been notified and has not acted, as described in the Weekend Risk Policy; and
- restriction of trading in individual instruments during periods of disorderly market conditions.
The Company may add, withdraw or vary these measures at any time without notice.
7. Circumstances in which protection does not apply
The Company may decline to apply negative balance protection, and may recover the full shortfall regardless of amount, where the negative balance arises from or is connected with:
- abusive, manipulative or prohibited trading as defined in the Client Agreement, including latency or price-feed exploitation, arbitrage against erroneous quotes, and coordinated trading across accounts;
- trading intended to exploit the protection itself, including deliberately taking positions that could not be supported by the account's equity;
- a breach of the Client Agreement; or
- fraud, or the provision of false or misleading information to the Company.
Where accounts are held by the same client, or by connected clients acting together, the Company may treat them as a single account for the purposes of this Policy.
8. Regulatory status
Negative balance protection is offered by the Company as a matter of contract. It is not a compensation scheme, it is not a guarantee, and it is not provided under, or backed by, any statutory or regulatory investor-protection arrangement in any jurisdiction. Where your account is held with an unregulated Contracting Entity, no regulatory compensation scheme applies to it at all.
9. Changes to this Policy
The Company may amend this Policy at any time by publishing an updated version on its website. The version published at the time of the relevant event applies.