In an email sent out this week seen by Finance Magnates, the Australian regulator reminded all of its licensees about their financial and client money reporting obligations under the Corporations Act 2001 (Cth) (the Act).
Namely, the authority highlighted that retail OTC derivatives issuers need to notify ASIC if they have any material adverse changes to their financial positions when compared to what was last reported to the regulator.
Specifically, financial firms must notify ASIC and give particulars of the event as soon as practicable and no longer than three business days after it becomes aware of the event.
A volatile week for FX
As Finance Magnates reported, this past week has brought a lot of volatility to the trading markets, particularly foreign exchange (forex). Large swings in the price of major currencies can be problematic for brokers and traders alike. Back in June of 2016, following the big Brexit vote, many brokers struggled to meet their customers' demand as there was a squeeze on Liquidity .
Flash crash events can cause financial harm to forex brokers. Historically, these types of situations have led to clients receiving margin calls and having positions closed out at a Negative Balance. Furthermore, large changes in major currencies can cause hundreds of millions in losses.
ASIC reminds firms of their obligations
In Australia, a retail OTC derivative issuer must have net tangible assets of the greater of $1,000,000 and 10 percent of its average revenue, at all times. From this, 50 percent of the required NTA must be held in cash or cash equivalents and 50 percent in liquid assets.
"Where the NTA of a retail OTC derivative issuer falls below 110% of its required NTA, the issuer must lodge a written report with ASIC that specifies the NTA of the issuer as at the date of the report within 3 business days after becoming aware of the event; and on the first day of every month after becoming aware until, as at the last day of the preceding month, the NTA is greater than 110% of the required NTA," the regulator said in the email.
"Where the NTA of a retail OTC derivative issuer is at any time less than the required NTA, the issuer must not enter into a transaction with any person to whom it provides financial services that could give rise to further liabilities (contingent or otherwise) unless the issuer certifies in writing that there is no reason to believe that:
(a) the entity will not comply with s912A of the Act; and
(b) there is or will be a deficiency in any accounts maintained by the issuer for the purposes of section 981B."
Do Aussie brokers need the reminder?
Speaking to Finance Magnates, Sophie Gerber, a Director at Sophie Grace and TRAction Fintech said: "The financial requirements apply at any given point in time so it is valuable to have a robust system for monitoring compliance with NTA so that any intra day swings with a negative impact can be identified and motivated before any triggers are hit."
"A prudent and well run broker always has their compliance requirements front of mind, particularly in the ASIC environment where there is a lot of regulatory pressure. Hopefully there are no brokers who 'needed' a reminder as such however it is good to receive a reminder from ASIC nonetheless."
In an email sent out this week seen by Finance Magnates, the Australian regulator reminded all of its licensees about their financial and client money reporting obligations under the Corporations Act 2001 (Cth) (the Act).
Namely, the authority highlighted that retail OTC derivatives issuers need to notify ASIC if they have any material adverse changes to their financial positions when compared to what was last reported to the regulator.
Specifically, financial firms must notify ASIC and give particulars of the event as soon as practicable and no longer than three business days after it becomes aware of the event.
A volatile week for FX
As Finance Magnates reported, this past week has brought a lot of volatility to the trading markets, particularly foreign exchange (forex). Large swings in the price of major currencies can be problematic for brokers and traders alike. Back in June of 2016, following the big Brexit vote, many brokers struggled to meet their customers' demand as there was a squeeze on Liquidity .
Flash crash events can cause financial harm to forex brokers. Historically, these types of situations have led to clients receiving margin calls and having positions closed out at a Negative Balance. Furthermore, large changes in major currencies can cause hundreds of millions in losses.
ASIC reminds firms of their obligations
In Australia, a retail OTC derivative issuer must have net tangible assets of the greater of $1,000,000 and 10 percent of its average revenue, at all times. From this, 50 percent of the required NTA must be held in cash or cash equivalents and 50 percent in liquid assets.
"Where the NTA of a retail OTC derivative issuer falls below 110% of its required NTA, the issuer must lodge a written report with ASIC that specifies the NTA of the issuer as at the date of the report within 3 business days after becoming aware of the event; and on the first day of every month after becoming aware until, as at the last day of the preceding month, the NTA is greater than 110% of the required NTA," the regulator said in the email.
"Where the NTA of a retail OTC derivative issuer is at any time less than the required NTA, the issuer must not enter into a transaction with any person to whom it provides financial services that could give rise to further liabilities (contingent or otherwise) unless the issuer certifies in writing that there is no reason to believe that:
(a) the entity will not comply with s912A of the Act; and
(b) there is or will be a deficiency in any accounts maintained by the issuer for the purposes of section 981B."
Do Aussie brokers need the reminder?
Speaking to Finance Magnates, Sophie Gerber, a Director at Sophie Grace and TRAction Fintech said: "The financial requirements apply at any given point in time so it is valuable to have a robust system for monitoring compliance with NTA so that any intra day swings with a negative impact can be identified and motivated before any triggers are hit."
"A prudent and well run broker always has their compliance requirements front of mind, particularly in the ASIC environment where there is a lot of regulatory pressure. Hopefully there are no brokers who 'needed' a reminder as such however it is good to receive a reminder from ASIC nonetheless."
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
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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/
👍 Facebook: https://www.facebook.com/financemagnates/
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Don't miss out on our latest videos, interviews, and event coverage.
🔔 Subscribe to our YouTube channel for more!🔔
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/
👍 Facebook: https://www.facebook.com/financemagnates/
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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
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.
📣 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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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:
🔗 LinkedIn: https://www.linkedin.com/company/financemagnates/
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