ASIC annual report shows high incidence of brokers misconduct


As outlined in the ASIC annual report, the regulator will continue to respond to a high incidence of misconduct in the retail OTC derivatives sector.

October 17, 2019, | AtoZ Markets –  The Australian Securities and Investments Commission (ASIC) has released its Annual Report for the 2018-19 financial year on Thursday. The report tabled in the Australian Parliament contains a record of ASIC’s activities and performance for the previous financial year.

The report also made references to the retail trading industry.

ASIC annual report highlights its action against AGM Markets

The annual report describes the process that led to it canceling the license of AGM Markets in November 2018. Yossef Asheknazi, former AGM’s CEO, was also banned from providing financial services for eight years and forbidden from leaving Australia.

Furthermore, ASIC’s report details that nine different foreign regulators helped in investigating the retail OTC derivative issuer. The regulator found that AGM’s financial services business involved core elements of unconscionability and unmanaged conflicts of interest. The retail broker also used a business model that undermined key conduct requirements.

Above all, the ASIC annual report highlights how the regulator battled a high level of misconduct in the retail OTC derivatives sector over the past twelve months.

Retail brokers should expect regulation

One of the comments made in the ASIC annual report has triggered apprehension among retail brokers.

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

Why is this a serious concern? As you may have known, the European regulators build their own set of leverage-restricting regulations using client losses.

The Aussie regulator has also been giving similar signals for the past twelve months. As a result, the annual report isn’t expected to take retail brokers by surprise. Nevertheless, more evidence that ASIC is most likely moving towards introducing regulations akin to those now in place across the European Union.

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