21 October, AtoZForex, Lagos – The Australian financial regulator is regarded as one of the most reliable world over. This status has again been proved by newly highlighted measures in the government paper on “Improving Australia’s financial system Government response to the Financial System Inquiry”. Amongst other things, the government addressed in this paper its response to the Financial System Inquiry, outlining steps to bolster protection for client funds held at brokers.
This is a welcome development as ASIC also publicly called for reform with ASIC Chairman Greg Medcraft telling the Parliamentary Joint Committee on Corporations and Financial Services in August this year that ASIC: “have raised the matter with Treasury that the law needs to be amended so client monies can’t be co-mingled”.
Australia CFD & FX Forum bid
These steps also support the bid of the CFD & FX Forum Members, which includes: CMC Markets, GAIN, IG Markets and OANDA. This forum is growing in relevance as these above mentioned members handle about two-thirds of the volume of CFD’s traded in Australia and have been pushing for better client fund safety.
The forum has already led the way for better consumer protection in the Australian financial market by segregating funds and instituting other voluntary actions to improve investor protection and service through their ACCC authorised Best Practice Standards.
Government finally addresses issue
Forum Co-Founder Tamas Szabo of IG Markets said: “This is good news for both investors and Australia’s international standing as a well-regulated financial centre. The CFD & FX Forum has consistently called for reform and better investor protection and we are pleased Government is finally addressing this.”
Fellow CFD & FX Forum Director Paul Casey, Head of Compliance at CMC Markets added: “The issue has been extensively examined by ASIC and Treasury in recent years. Legislative reform to benefit and better protect investors is straightforward and should be introduced as soon as possible.”
As earlier outlined in the previous article on the subject, the government paper has clarified that the Government will develop legislative amendments to improve protections for client monies held in relation to derivatives. These improvements are needed to ensure that investors’ monies are adequately protected when held by intermediaries, which is scheduled to be developed by end-2015.
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