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#1 05-08-2019 09:22:53

johnedward
Admin & Trader
From: Paris - France
Registered: 21-12-2009
Posts: 2561
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How do ASIC requirements affect brokers that have foreign clients?

How do the ASIC requirements affect brokers that have foreign clients?


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In 2019, we've been seeing much more harsh rules worldwide. The ASIC just elected to copy ESMA's actions which are supposedly aimed at improving conditions for traders. However, a few Australian brokerages are against any new rules. And meanwhile, some brokers are shifting their activities - and their clients - offshore.

Australian Securities and Investments Commission rules: what do they mean?

Although the Aussie homeland was once considered a relaxed environment for brokerages, this is now in the past. The Australian Securities and Investments Commission just implemented harsh requirements and is asking brokerages to hand over a large quantity of data on their clients and their practices.

The Australian Securities and Investments Commission also requires information about brokers' business strategy, its A-Book and B-Book allocations, and the reasoning used to assign traders to the various books. In other countries, their is a shift towards greater transparency AND regulation. This encompasses everything, branding, bank partnerships, business operations, etc.

Are Australian brokers still allowed to market to traders located abroad?

In recent months, we've seen brokers "fleeing" (particularly those who are targeting Chinese or Japanese clients) to more lenient countries (Belize, Cayman Islands, Vanuatu, etc.). A few brokerages are still testing the waters and keeping a watchful eye over their competitors, even though some of them have applied for foreign licences just in case. The Australian Securities and Investments Commission also asks brokerages to prove that their business activities do not infringe upon local legislation.

What happens in foreign countries?

The Australian Securities and Investments Commission's approach also affects foreign jurisdictions. Belize, for example, is currently questioning its licensing practices. Vanuatu also now has new rules that require the president of a brokerage to live in the country at least half of the year.

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