The Australian Securities and Investments Commission (ASIC) has guided its licensed retail OTC derivatives issuer XTrade.au Pty Ltd to change the way the brokerage handles client money. The Australian subsidiary of XTrade has successfully revamped its payment processes to comply with the requirements of the regulator.
ASIC has issued a communique this morning announcing that the company has been guided to implement changes to the ways it handles payments. The watchdog states that it was concerned that XTrade’s parent company was depositing a ‘buffer’ into the client trust account to cover any potential shortfalls.
Challenges for brokerages have been related to client settlement challenges arising from dealings with local banks. Daily settlement facilities from Australian banks have been too hard to obtain for some new entrants into the market. Some firms have been doing reconciliation on a daily basis while banks weren’t providing daily settlements.
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Commenting to Finance Magnates, a company spokesperson stated: “XTrade is fully compliant with the Australian regulatory framework and ASIC’s announcement has not affected our business in any way.”
In the meantime XTtrade has managed to secure for its clients a new lucrative deposit option: PayPal. The company has already activated for its clients one of the most renowned online payments systems, an effort which brokerages know to be very time consuming.
Clients of XTrade are already able to deposit via PayPal using the cashier system of the brokerage. For the time being the deposit option is available for clients who have registered their accounts with the European subsidiary of XTrade.