Negative Balance Protection and Abuse Trading Policy
Article 1: Purpose and scope of application
1.1 This policy aims to clarify the applicable conditions of Negative Balance Protection (NBP) and stipulate AFT’s rights to identify, prevent, investigate and deal with abusive transactions using the negative balance protection mechanism.
1.2 Negative Balance Protection is designed to protect eligible clients from liability for qualified negative trading account balances arising from market fluctuations and trading activities in accordance with applicable laws and contractual terms.
1.3 Negative balance protection shall not be construed as allowing customers to intentionally exploit leveraged trading conditions, coordinated trading arrangements or account structures to transfer artificially engineered trading losses to AFT.
1.4 Eligibility for negative balance protection depends on the contracting entity to which the customer belongs, customer classification, account type, applicable financial products, contract terms and relevant regulatory requirements.
1.5 No provision of this policy shall exclude, limit or override mandatory customer protection requirements stipulated by applicable laws.
Article 2: Abuse of negative balance protection is prohibited
2.1 Customers shall not intentionally design, organize or participate in trading arrangements with the purpose of using the negative balance protection mechanism to obtain improper economic benefits or artificially transfer transaction risks.
2.2 If there is sufficient evidence to prove the existence of concerted arrangements, improper purposes or contractual breaches, the following activities may be deemed to be abusive transactions:
a. Reverse positions in related accounts
Establish trading positions in opposite directions or with economic correlation through multiple accounts, causing one account to incur trading losses exceeding the deposit amount, while retaining corresponding gains in other accounts.
b. Cross-account or cross-platform trading arrangements
Coordinate trading activities using different trading accounts, actual beneficiaries, related parties or third-party trading platforms to transfer engineered trading losses to AFT.
c. Deliberate abuse of maximum leverage
Deliberately use extreme leverage, concentrated positions or insufficient account funds, and cooperate with coordinated trading arrangements to trigger negative balance protection, while retaining corresponding economic interests in other accounts or trading arrangements.
d. Concealing account relationships
Use undisclosed beneficial owner relationships, third-party accounts, misleading information or other deceptive arrangements to circumvent AFT's trading restrictions or risk management measures.
e. Risk avoidance control measures
Intentionally circumvent applicable leverage limits, margin requirements, position limits or other lawful risk management measures by structuring transactions or spreading risk exposure across multiple accounts.
2.3 High leverage trading, normal hedging, news trading, weekend positions or negative balances do not alone constitute conclusive evidence of abusive trading.
2.4 AFT will comprehensively consider the overall transaction model, account relationships, transaction records, existing evidence and applicable contractual obligations to evaluate suspected abusive transactions.
Article 3: Leverage, Margin and Risk Exposure Management
3.1 To the extent permitted by applicable laws and contractual requirements, AFT reserves the right to adjust trading conditions based on market fluctuations, liquidity conditions, abnormal trading exposures and account risks.
3.2 Risk control measures may include:
a. Reduce the maximum leverage ratio for an account or specific financial product.
b. Increase initial margin or maintenance margin requirements.
c. Implement High Margin Requirements (HMR).
d. Limit single order size, overall position, or total account risk exposure.
e. Restrict new trading positions.
f. Implement temporary trading restrictions during periods of higher market risk.
g. Implement margin-related forced liquidation measures in accordance with applicable trading rules.
3.3 AFT may implement enhanced risk controls on weekends, public holidays, before and after the release of major economic data, when market liquidity is insufficient or when extreme fluctuations are expected.
3.4 For accounts with recurring negative balances, unusually concentrated leverage risk exposures, or signs of reasonable coordinated abuse, AFT may implement enhanced monitoring and risk management measures.
3.5 All adjustments shall comply with applicable notification requirements, contractual agreements and mandatory regulatory obligations.
Article 4: Investigation of related accounts and coordinated transactions
4.1 The AFT may investigate suspected coordinated trading activities involving multiple accounts, related parties or common beneficial beneficiaries.
4.2 Subject to applicable privacy and data protection requirements, relevant evidence may include:
a. Transaction direction, execution time, position size and associated profit and loss model.
b. Common actual beneficiary or account collaborative control relationship.
c. Device identification, IP address, login behavior and other available account-related indicators.
d. Deposit and withdrawal behavior patterns.
e. Recurring negative balances and corresponding income arrangements.
4.3 The same IP address, device or similar transaction time itself is not enough to independently prove customer abuse, and other supporting evidence is still needed.
4.4 AFT may require customers to provide reasonable explanations or supporting information regarding account ownership, trading activities and related fund arrangements.
Article 5: Preventive measures and temporary restrictions
5.1 When AFT has reasonable grounds to suspect that an account has engaged in abusive trading activities or material breaches of applicable trading conditions, it may implement preventive measures commensurate with the level of risk.
5.2 Relevant measures may include:
a. Restrict new trading orders.
b. Reduce leverage or increase margin requirements.
c. Temporarily suspend specific trading permissions.
d. Initiate enhanced account monitoring or formal investigation.
e. Implement legal and appropriate restrictions on funds directly related to the disputed transaction when there is a valid legal or contractual basis.
5.3 Temporary restrictive measures do not mean that AFT has finally determined that the customer has violated regulations.
5.4 AFT will review the necessity and appropriateness of relevant restrictive measures, and adjust or lift the measures in accordance with applicable laws and contractual obligations.
Article 6: Abuse of Transaction Processing, Contractual Remedies and Broker Rights
6.1 If the investigation confirms that the customer has committed fraud, material misrepresentation, illegal account arrangements or other contractual breaches, AFT may exercise applicable contractual and legal remedy rights.
6.2 To the extent permitted by applicable laws and valid contract terms, processing measures may include:
a. Suspend or terminate trading services and related customer agreements.
b. Cancel non-mandatory promotional benefits, bonuses or other contract rewards directly related to confirmed violations.
c. Correct or cancel the affected transaction where expressly permitted by the valid transaction terms and applicable law.
d. Claim compensation in accordance with the law for proven losses caused by fraud or breach of contract.
e. Exercise legally valid rights of set-off or other contractual remedies in accordance with the law.
6.3 For accounts that are not subject to statutory mandatory negative balance protection, AFT may apply the eligibility conditions and exclusions for negative balance protection in accordance with valid contracts.
6.4 For customers who are entitled to mandatory negative balance protection by law, AFT shall not automatically deny or cancel their statutory protection simply because the customer uses high leverage, has a negative balance, or is under investigation.
6.5 AFT shall not arbitrarily confiscate legitimate trading profits or client deposits unrelated to violations.
6.6 Any fund adjustments, recovery measures or claims for damages must have a valid and enforceable contractual or legal basis.
Article 7: Market conditions and special trading conditions
7.1 When special market conditions occur, AFT may adjust applicable trading conditions, including:
a. Major economic or geopolitical events.
b. During market closing and reopening periods.
c. Market liquidity drops significantly.
d. Abnormal price gaps or market fluctuations.
e. The trading risk exposure is unusually concentrated.
7.2 Adjustment measures may involve leverage ratios, margin requirements, position limits, trading permissions and applicable margin liquidation parameters.
7.3 AFT will implement adjustments in accordance with applicable customer agreements, product specifications and legal requirements, and notify customers as required.
7.4 The forced liquidation mechanism and margin risk control do not guarantee that orders can be completed at a specific price, nor do they guarantee that slippage, market gaps or negative balance risks will be completely avoided.
Article 8: Investigation, notification and dispute resolution
8.1 AFT may investigate suspected trading abuses and require customers to provide relevant supporting materials.
8.2 Investigation and final processing decisions should be based on reasonable and verifiable evidence rather than isolated transaction characteristics or unsubstantiated speculation.
8.3 Where permitted by law, AFT will explain material adverse decisions and their main basis to affected customers.
8.4 The Client may challenge the relevant decision through AFT’s official complaints procedure and reserves other dispute resolution rights under applicable law.
8.5 Preliminary investigations or allegations of abuse by themselves do not directly constitute the final determination that the customer has violated the regulations, is liable for compensation, or has a debt.
Article 9: Effectiveness and Revision
9.1 Once this policy is officially announced by AFT, it will become effective in accordance with applicable notices, consents and contractual requirements.
9.2 This policy serves as a supplementary document to the applicable customer agreements, trading conditions and product specifications.
9.3 AFT may amend this policy in accordance with applicable law and contractual notification requirements.
9.4 If there is a conflict between this policy and mandatory legal or regulatory requirements, the relevant mandatory requirements shall prevail.