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#1 22-04-2019 13:59:12

johnedward
Admin & Trader
From: Paris - France
Registered: 21-12-2009
Posts: 2497
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China is behind the ASIC's recent crusade

China is behind the ASIC's recent crusade


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As we recently posted, Australia's ASIC is ordering brokerages to turn away foreign traders when the company isn't registered in the trader's domestic territory.

Although we initially thought this was to fight off European forex brokers, it seems like the Chinese are the genuine object of this effort. 

Why? To maintain good international relations with each other

China is Australia's main trade partner, so this seems to explain why Australia has been able to avoid economic downturns for the last 30 years or so. It would appear that China has demanded protective measures from the ASIC.   

Unusually, the ASIC didn't first contact relevant companies for a discussion on this. It straight out asked brokerage companies to submit tons of inside client information and ban foreign traders from opening trading accounts.

These crazy events have led some legal specialists to suggest that the brokers should combat the ASIC legally.

Arbitration isn't possible at this time

Even though much of this comes as a surprise, the result means the end of any possible arbitrage scenarios.

In addition, tech companies, distributors and licensers will soon feel the brunt of the regulatory agency's stick, which will cut down on business volumes. As of last week, the issuing of broker liceses is close to zero, as demand is falling short of the offer. 

Traders to take their business elsewhere?

Like last year, traders will once again seek out foreign brokers, many of whom offer little account or capital guarantees.

Aussie brokerages without foreign offices are likely going to seek out new ways to overcome the regulator's harsh new restrictions.

Meanwhile, Europe's brokerages are happy. They won't lose any more business to their Australian counterparts.

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