Forex brokers seeking Australian license on the rise – ASIC report

Forex brokers seeking Australian license on the rise – ASIC report

- in All News, Regulation
Australia

The number of entities seeking to obtain a financial service license to operate a retail margin forex broker business in Australia has increased, the Australian Securities and Investments Commission (ASIC) said on Wednesday in its latest enforcement report for the second half of 2015. Many of the candidate-licensees have an ultimate objective of operating in the Asian marketplace.

The regulator did no provide figures to back its finding.

The ASIC ordered in the second half of 2015 financial service providers to pay $149 million in compensation and remediation for consumers and investors. Infringement notices paid during the six-month period were $969,200.

The regulator commenced 105 investigations in the second half of 2015 and completed 86. As a result, 42 criminal charges were laid, six people were charged criminal proceedings, and 27 individuals were removed from providing financial services. The broker issued 20 infringement notices during the period under review.

In comparison, in the first half of 2015, compensation/remediation payments exceeded $12 million and infringement notices paid were $652,800. A comparison of key indicators from the enforcement results in the two halves of 2015 follows:

H2 2015

H1 2015

Investigations commenced

105

136

Investigations completed

86

137

Persons charged in criminal proceedings

6

10

Criminal charges laid

42

82

Infringement notices issued

20

52

Infringement notices paid

$969,200

$652,800

Compensation / remediation

$149m

$12m

“ASIC does everything in its power to detect and take action against those who break the law, to ensure consumers can have trust and confidence in our financial markets and financial services industry. This report highlights our strong recent enforcement record and ongoing areas of focus,” said ASIC Commissioner Greg Tanzer.

The regulator published data about several enforcement priorities on which it focused. These are market integrity, corporate governance, financial services, and small business enforcement. Following is more data about AICS’s four priority axes:

ASIC H2 2015 enforcement report

In 2016, the regulator intends to pay a close attention especially to Austrlian companies’ poor corporate governance and corporate culture. It will focus on the following issues:

  • companies with poor corporate governance;
  • issues concerning related party transactions;
  • inadequate company disclosure; and
  • financial reporting and accounting fraud.

As a global challenge, the regulator pointed the increasing volumes of electronic forensic data and the use of technology, such as encryption, cloud computing, virtualisation and new technology devices. The ASIC is among the leading regulatory bodies in the field of digital forensics.

It said the volume of electronic data that organizations and entities create and store has been increasing and the Australian watchdog expects the volume it receives to increase to 425 terabytes (TB) of data per year by 2020.

ASIC H2 2015 enforcement report forensic data

In Australia, financial investment companies, including forex brokers, are forbidden to operate without a local license. Investors who engage with unregulated brokers put their funds at risk. The regulator maintains a register with all authorized entities and regularly issues warnings against unauthorized entities.

You can access the full ASIC report by following this link.

Source: ASIC

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