The Australian Securities and Investments Commission (ASIC) has become the latest regulator to embark on a crusade against binary options brokerages which are providing their services in the country without authorization. The watchdog has expressed to a number of regulated and unregulated brokerages that they are not allowed to advertise and onboard Australian residents.
ASIC is highlighting in its announcement that the unlicensed client on-boarding and advertising activity of binary options brokers and affiliates in Australia has increased substantially. The watchdog has issued notices to 40 companies which have been engaging in unregulated activities.
In contrast to most regulators that have gone after binary options providers in the past, ASIC is going after the marketing subsidiaries of some brokers as well as some affiliate websites themselves.
The ASIC went on to contact binary option review websites, binary option trading signal providers, binary option broker affiliate websites as well as forex and CFDs brokers and managed FX service providers.
The regulator divided the companies which it approached into two groups. The first set of companies have expressed their willingness to get more information about licensing their services in the country. The second group has not replied to ASIC’s attempts at contact.
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A total of 21 providers have adhered to the request from ASIC to stop offering their services to Australian clients, demonstrating commitment from the side of the brokerages to operate as licensed financial services providers.
The websites in question have also had to remove from their pages any references to Australia and cease marketing campaigns directed at Australian investors. With additional disclaimers for Australian clients on websites and mobile apps, and the blocking of the process of signing up for an account, ASIC is likely to consider any applications on the part of these binary brokers.
In addition, the companies have adhered to the recommendations of ASIC to educate their introducing brokers and affiliates to stop targeting Australian investors and to close down existing Australian accounts.
Some of the companies which have adhered to the ASIC request have expressed interest in obtaining the appropriate financial services regulation to onboard clients in Australia. The regulator states that it has provided the companies with information about the process of getting an Australian Financial Services (AFS) license.
Commenting on the move by the regulator, ASIC’s Commissioner Cathie Armour said: “The dramatic increase in unlicensed conduct – particularly in entities offering binary options – is of real concern to ASIC.”
“We remind investors to be wary of advertising on websites or unsolicited calls or emails by people offering these types of products, and to verify that product providers are appropriately licensed or authorized before dealing with them,” Mrs Armour added.