Interactive Brokers to Refund $1.5 Million in Fees & Commissions in Australia

The Australian Securities and Investments Commission (ASIC) has issued an announcement outlining that Interactive Brokers (NASDAQ:IBKR) is preparing to refund more than 3,000 of its Australian customers with the fees and commissions which they paid to the broker for retail margin loans.

The company will refund about $1.5 million to its customers and in addition pay $100,000 to the Financial Rights Legal Center which deals with matters of educating the Australian public about financial services and consumer rights.

Interactive Brokers (NASDAQ:IBKR) has been engaged in a voluntary undertaking with ASIC since August 2013 when it agreed not to issue nor increase any new or existing margin loans. The company has also wound down its facilities and is currently not offering margin lending facilities to 'natural person' clients in Australia.

ASIC Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term of Margin Lending

The regulation of margin lending began on January 1st, 2010, with the introduction of the Corporations Legislation Amendment Act, which required issuers of margin lending to be regulated by ASIC through an Australian Financial Service (AFS) license. In addition, under the Australian regulatory environment, every client’s creditworthiness has to match his risk profile.

ASIC Commissioner Greg Tanzer said in the announcement, “Margin loans come with unique risks and will not be suitable for all consumers. It is therefore important that they be provided by appropriately licensed or authorised companies. Providers must also comply with their responsible lending Obligations Obligations In finance, an obligation is a financial responsibility where the terms of a contract must be met. Should an obligation between parties fail then the party who is at default may face legal action. In this scenario, the guilty party will not only have to agree to pay the set amount to fulfill the contractual arrangement but may also be responsible for covering all legal proceedings cost. Routine payments or outstanding debt of any kind are considered financial obligations, so if someone owes you In finance, an obligation is a financial responsibility where the terms of a contract must be met. Should an obligation between parties fail then the party who is at default may face legal action. In this scenario, the guilty party will not only have to agree to pay the set amount to fulfill the contractual arrangement but may also be responsible for covering all legal proceedings cost. Routine payments or outstanding debt of any kind are considered financial obligations, so if someone owes you Read this Term when issuing margin loans.”

PricewaterhouseCoopers will be reporting on its verification of the refund process to ASIC and IB.