Australia’s ASIC: 30 OTC derivatives, forex brokers applied for license in H2 2015

Australia’s ASIC: 30 OTC derivatives, forex brokers applied for license in H2 2015

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The Australian Securities and Investments Commission (ASIC) received 30 applications from entities seeking to be licensed as over-the-counter (OTC) derivatives and forex retail brokers in the 1 July-31 December 2015 period, the regulator said in a report on Tuesday. In addition, five of these entities also applied for license for make-a-market authorization for OTC derivatives or forex contracts.

“ASIC is seeking to ensure that there is a robust compliance culture in place when businesses set up or vary their license. We are continuing to pay close attention to license applications in the areas of retail OTC derivatives and limited licensing,” ASIC Deputy Chairman Peter Kell said. “ASIC also has a focus on licensing issues in the broader fintech sector, including marketplace lending, digital (robo) advice and crowd sourced funding,” he added.

The total number of applications the ASIC received in the second half of 2015 was 1,879, some 47% of which were related to an Australian financial services (AFS) license and 35% related to an Australian credit license. Of the total, 35% applications were for new license application and 47% were regarding an existing license.

This is the third report-overview of licensing and professional registration applications that the ASIC publishes.  The first one was publishes such reports since May 2015.

Generally, the number of approved applications (36% of all) during the six-month period was lower compared to the previous two half-years for which data was collected and one of the reasons were the novelty and complexity of the OTC and forex application process.

Meanwhile, the ASIC canceled 98 AFS licenses and 192 credit licenses during the period under review.

The regulator notes that some financial groups are after an AFS license in order to give the appearance that non-licensed group companies are regulated by the ASIC. Meanwhile, others seek to obtain an ASIC license by acquiring Australia-licensed units, often doing this as a way to circumvent ASIC’s assessment of their competency or appropriateness to hold a license.

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.

We strongly advise you to only deal with regulated forex brokers, authorized by reputable regulatory bodies like ASIC, CySec, FCA, and CFTC/NFA, among others.

Source: ASIC

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