Australian Regulator to Focus on Proactive Checks of Retail FX Brokers

ASIC secured a total of of $149 million in compensation and remediation for investors and consumers.

The Australian Securities and Investments (ASIC) has today released its enforcement report for the period between the 1st of July and the 31st of December 2015. According to the document the regulator has been particularly active in protecting consumers across the financial services industry in Australia.

The figures released in the report show that ASIC has successfully recovered about $149 million in compensation and remediation for investors and consumers of financial services.

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ASIC, financial regulation
ASIC Report H2 2015, Key Figures, Source: ASIC

Increasing Demand for an AFS License by Retail FX Brokers

ASIC’s report highlights that the Australian watchdog is seeming increasing demand by businesses willing to operate as a retail margin FX broker in the country. In addition the report also highlights that a number of the licensees are using their permission to operate in the Asian marketplace.

With the caution that retail foreign exchange trading is a risky form of investing, ASIC states that it is undertaking a proactive stance when in comes to the conduct of retail foreign exchange brokers that are holding an AFS.

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ASIC is focusing its efforts on brokers that are not adequately disclosing the risks associated with trading and is aiming to ensure that clients are adequately informed about the inherent conflicts of interest and risk management practices.

FX Manipulation and Poor Culture in the Industry

The Australian regulator continues emphasizing on an important matter for the industry as a whole, by saying that the culture in the financial sector has remained poor. Both large and small companies are continuing provide bad advice to their clients without any repercussions, while financial benchmark and FX markets manipulation are continuing to make headlines in Australia and globally.

ASIC, Financial regulation
Market Integrity Results by Misconduct Type in percentages, Source: ASIC

Over the past six months the regulator has secured a total of $149 million in compensation and remediation for investors and consumers of financial services. The watchdog has also banned 27 individuals from the industry and laid 42 criminal charges. Six people have been charged in criminal proceedings in the second half of 2015 when ASIC commenced 105 investigations, 86 of which it has completed.

ASIC, Financial regulation
Financial Services Results by Misconduct Type, in percentages, Source: ASIC

In 2016 the financial regulator of Australia will be focusing on ensuring the integrity of financial market benchmarks.

Commenting on the report, ASIC’s Commissioner Greg Tanzer said: “ASIC does everything in its power to detect and take action against those who break the law, to ensure consumers can have trust and confidence in our financial markets and financial services industry. This report highlights our strong recent enforcement record and ongoing areas of focus.”

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