Exclusive: Some Australian Brokers Gearing Up for a Fight Against ASIC

2 mins read

This week will be remembered by the forex and CFDs brokerage industry in Australia for a long while. Starting from the newly minted product intervention powers of the Australian Securities and Investments Commission (ASIC) late last week, and evolving into a massive data-collection effort on the part of the regulator, Friday brings yet more news.

The wording of the letter sent out to Australian brokers by the ASIC’s OTC products compliance team is also mandating firms to take steps to close the open positions of existing clients from overseas jurisdictions where the broker is not licensed by the end of May.

 Australian Brokers

Rumor on the street is that the latest drastic steps mandated by the local regulator are prompting firms to seek high-level legal advice. The general view of industry insiders from Australia is that the latest “orders” from the ASIC are not legal or viable and that they should be resisted.

Brokers are mandated to send a written answer to the ASIC before the end of April, elaborating on the steps taken to comply with the regulator’s request regarding overseas clients. Each Firm also needs to send by email the number of clients it has in each jurisdiction by May 7, 2019. Yesterday’s media release by the regulator highlighted China and the EU as the main focus for the Australian watchdog.

Australian brokers are warned that failure to comply with the requests could result in actions from the regulator. The ASIC highlights actions under section 915C of the Corporations Act 2001.

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