HighLow Markets, a binary options broker based in Sydney, joins the list of brokers who are preparing for the upcoming product intervention measures of the Australian Securities and Investments Commission (ASIC).
This Monday, the firm sent out an email to its clients based outside of Australia, informing them that it will no longer be supporting offshore customer accounts, citing recent regulatory changes as its motivation.
As a result, the broker will not register new traders from outside Australia, and any existing trading accounts based outside of the country will be closed. The changes are effective immediately.
“We apologise for having to take this action and thank you for choosing HighLow Markets. If regulatory circumstances change in the future, please be assured we will notify you as a matter of course.”
As Finance Magnates reported, ASIC is planning to ban products which it deems toxic. As was the case in Europe, the main products in the regulator’s radar are binary options and contracts-for-difference (CFDs).
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In June, the Aussie watchdog released a consultation paper on its proposed measures, seeking public input until August 7, 2019. The regulator aims to release its final regulatory guide in September 2019.
This means brokers such as HighLow Markets will need to drastically change their business operations. The impact this could have on the industry could be similar to what happened in Europe – brokers closing down, moving offshore and retail clients looking elsewhere for higher leverage.
A further, separate ASIC consultation on its proposed guidance on the design and distribution obligations will commence later this year.
ASIC clamps down on the retail trading industry
Brokers in Australia haven’t just had to prepare for upcoming product intervention measures. They have also had to deal with ASIC asking Australian retail brokers to suspend onboarding clients from overseas, where the firms are not regulated.
Following this, brokers such as IFGM, who was the first broker in Australia to begin closing accounts of select clients it on-boarded from overseas, and Vantage FX stopped servicing clients outside of the country.