Though getting PI insurance is difficult, companies need to pay close attention to other insurance requirements.
The recent landmark fines imposed by the Australian courts against three CFD providers totaling $75million is a timely reminder to ensure that your firm has an adequately structured insurance program that can respond to these losses.
Professional Indemnity (PI) insurance is mandated by ASIC for those AFSL holders providing services to retail clients. On the recent ASIC Market Liaison Forum, Cathie Armour of ASIC acknowledged that the difficulty of
obtaining PI insurance is an issue they are aware of and are having a look at. ASIC noted that it has not come to any particular conclusions, having for a number of years now reviewed whether this type of insurance is the best way to achieve the goals of the financial system.
A question regarding the potential for use of alternative arrangements, which is outlined in ASIC’s RG126 was met with a qualified response, noting that ASIC considers for the retail OTC derivatives market, it is really important that PI insurance is in place. Likewise, no details were given to attendees about what, for other financial services participants such as Stock Brokers, would qualify as acceptable alternative arrangements.
What Else Am I Missing?
However, the distraction of the PI insurance issues means that many CFD brokers overlook other valuable insurances, especially given the escalating costs and difficulties of the PI insurance, which they are required by law to have, leaving themselves exposed.
To make it simple, we have a look at what is covered by other types of insurance policies, which you may not have considered:
• Directors and Officers’
• Statutory Liability
Directors and Officers
Whilst Directors and Officers (D&O) Liability insurance affords some protection for fines and penalties, broadly speaking, this cover extends only to fines imposed against the individual directors and others classified as officers under the Corporations Act. D&O policies do not generally extend to fines against the entity, which was the case with AGM and the other entities under their AFSL, which were dealing in CFDs.
Additionally, pre-Hayne Royal Commission a number of Professional Indemnity policies included, albeit sub-limited, extensions for fines and penalties against the Insured. However, post-Hayne we have largely seen this cover removed.
Whilst the fines imposed against the three CFD providers does not reflect the average risk for many firms, it is vitally important for AFSL holders to manage their exposure to regulatory risk – a good way to do this is via a stand-alone Statutory Liability policy.
Statutory Liability
A Statutory Liability policy can provide cover for the company, senior management and employees for allegations of wrongful breaches of key legislation in the course of providing professional services and may extend to supplementary legal expenses.
We encourage you to review your current insurance program with your insurance broker so that you are comfortable with your inclusions and exclusions.
Ben Glover is the Founder and Managing Director of Insight Risk Advisers.
The recent landmark fines imposed by the Australian courts against three CFD providers totaling $75million is a timely reminder to ensure that your firm has an adequately structured insurance program that can respond to these losses.
Professional Indemnity (PI) insurance is mandated by ASIC for those AFSL holders providing services to retail clients. On the recent ASIC Market Liaison Forum, Cathie Armour of ASIC acknowledged that the difficulty of
obtaining PI insurance is an issue they are aware of and are having a look at. ASIC noted that it has not come to any particular conclusions, having for a number of years now reviewed whether this type of insurance is the best way to achieve the goals of the financial system.
A question regarding the potential for use of alternative arrangements, which is outlined in ASIC’s RG126 was met with a qualified response, noting that ASIC considers for the retail OTC derivatives market, it is really important that PI insurance is in place. Likewise, no details were given to attendees about what, for other financial services participants such as Stock Brokers, would qualify as acceptable alternative arrangements.
What Else Am I Missing?
However, the distraction of the PI insurance issues means that many CFD brokers overlook other valuable insurances, especially given the escalating costs and difficulties of the PI insurance, which they are required by law to have, leaving themselves exposed.
To make it simple, we have a look at what is covered by other types of insurance policies, which you may not have considered:
• Directors and Officers’
• Statutory Liability
Directors and Officers
Whilst Directors and Officers (D&O) Liability insurance affords some protection for fines and penalties, broadly speaking, this cover extends only to fines imposed against the individual directors and others classified as officers under the Corporations Act. D&O policies do not generally extend to fines against the entity, which was the case with AGM and the other entities under their AFSL, which were dealing in CFDs.
Additionally, pre-Hayne Royal Commission a number of Professional Indemnity policies included, albeit sub-limited, extensions for fines and penalties against the Insured. However, post-Hayne we have largely seen this cover removed.
Whilst the fines imposed against the three CFD providers does not reflect the average risk for many firms, it is vitally important for AFSL holders to manage their exposure to regulatory risk – a good way to do this is via a stand-alone Statutory Liability policy.
Statutory Liability
A Statutory Liability policy can provide cover for the company, senior management and employees for allegations of wrongful breaches of key legislation in the course of providing professional services and may extend to supplementary legal expenses.
We encourage you to review your current insurance program with your insurance broker so that you are comfortable with your inclusions and exclusions.
Ben Glover is the Founder and Managing Director of Insight Risk Advisers.
Interactive Brokers Expands Offerings with Daily Options on French Stocks
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/company/financemagnates/
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Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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