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ASIC is Implementing New Rules for Foreign Brokers

ASIC, the Australian Securities and Investments Commission, seeks to enhance regulations for global financial firms operating in Australia. Starting October 2024, foreign brokers dealing with Australian retail clients may need to report domestic transactions to local authorities.

ASIC introduced derivative transaction guidelines in November 2020, providing further details in a May 2022 consultation paper. Sophie Gerber, Principal at Sophie Grace and Co-CEO of TRAction Fintech, anticipates increased enforcement by ASIC for brokers targeting Australian clients. This move addresses regulatory gaps, as some brokers wrongly assume exemption from Australian registration requirements. Non-compliance may result in cease-and-desist orders under new regulations.

However, the market has undergone significant changes since ASIC's 2015 regulations. The revised rules reflect ASIC's increased focus on Australian retail clients dealing with foreign brokers. ASIC ensures broad applicability, requiring any business operating in Australia, accepting or having accepted Australian retail clients, to understand and comply with the standards.

Sophie Gerber predicts a shift in how foreign brokers engage with Australian clients under the new regulations. The implementation aligns with the impending EMIR Refit in Q1 2024, allowing multinational corporations to streamline changes to transaction reporting. ASIC's recent restrictions on the retail trading industry, including marketing and leverage limits, indicate a global trend in regulatory control.


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