ASIC Reports “High Incidence” of CFD Broker Misconduct

The Aussie regulator made the comments in its recently published annual report

The Australian Securities and Investments Commission released its annual report for the 2018/19 fiscal year on Thursday.

The report contains a couple of interesting references to the retail trading industry.

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First off, it describes the process that led to it canceling the license of AGM Markets in November of last year. Yossef Ashkenazi, the company’s CEO, was also banned from working in financial services for eight years and forbidden from leaving Australia.

According to the report, ASIC asked nine different foreign regulators for help with its investigation into AGM Markets.

That was likely to include Israeli and Cypriot authorities as the broker had ties to both countries.

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On a broader level, ASIC’s report also details some of the supervisory measures, focused on the retail trading industry, that the Australian regulator has taken over the past twelve months.

Regulation coming

One line in the report will be particularly worrying for retail brokers.

“We continue to respond to a high incidence of misconduct in the retail OTC derivatives sector, involving large client losses,” wrote the regulator.

Why should this be worrying? Well, as most of our readers know, European regulators used client losses as the girder on which to build their own set of leverage-restricting regulations.

ASIC has been making similar noises for the past twelve months. As a result, the report isn’t likely to provide retail brokers with any surprises. It is, however, more evidence that the Aussie regulator is very likely moving towards introducing regulations akin to those now in place across the European Union.

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