Following ASIC's announcement yesterday of its new regulation on data regulation for regulated brokers, Australian regulators continue to make more news today that their brokers may have violated the laws of China and the European Union in providing OTC derivatives to overseas retail traders.
Time node
Before the end of April, brokers requested written replies to ASIC detailing measures taken to comply with regulatory requirements for overseas customers.
Before May 7, brokers need to e-mail the number of customers they have in each jurisdiction.
Regulatory focus
China and the EU are the main concerns of Australian regulators.
Regulatory impact
At present, there are 63 Australian brokers in China. This week, the platforms that have cancelled ASIC regulatory licences are UTRADE, ESA ASIA and Baofu International.
Today, OANDA and Lotte Securities announced the suspension of Chinese customers'cash inflows.
Causes of events
The Chinese authorities notified Australian financial institutions that some Australian brokers were not authorized to offer foreign exchange margin transactions in China.
According to Chinese law, "it is illegal for any institution to engage in foreign exchange margin trading in China without authorization; it is also illegal for any client to entrust an unauthorized institution to engage in foreign exchange margin trading.
Event impact
ASIC has officially notified relevant brokers that any violation of overseas laws will be subject to strict scrutiny by regulators. ASIC said it would consider whether brokers violated overseas laws while violating the "efficient, honest and fair" service requirements of Australian law.
At the same time, ASIC is also examining whether AFS licensed securities firms make misleading or deceptive statements about the scope, application process or application purpose of the AFS license.
ASIC also said that brokers should not "make misleading or deceptive statements about the scope or application or effect of their AFS licenses in their marketing materials, websites, social media platforms and disclosure documents."
The EU regulatory framework for retail foreign exchange and spread contracts includes anti-tax avoidance provisions. Brokers who actively solicit customers to transfer to their Australian subsidiaries, as well as brokers who promote products outside ESMA's CFDS regulatory framework, are said to have violated these rules.
Failure to comply with these requirements may lead to regulatory action. ASIC emphasizes actions taken under section 915C of the Company Act 2001.
Time node
Before the end of April, brokers requested written replies to ASIC detailing measures taken to comply with regulatory requirements for overseas customers.
Before May 7, brokers need to e-mail the number of customers they have in each jurisdiction.
Regulatory focus
China and the EU are the main concerns of Australian regulators.
Regulatory impact
At present, there are 63 Australian brokers in China. This week, the platforms that have cancelled ASIC regulatory licences are UTRADE, ESA ASIA and Baofu International.
Today, OANDA and Lotte Securities announced the suspension of Chinese customers'cash inflows.
Causes of events
The Chinese authorities notified Australian financial institutions that some Australian brokers were not authorized to offer foreign exchange margin transactions in China.
According to Chinese law, "it is illegal for any institution to engage in foreign exchange margin trading in China without authorization; it is also illegal for any client to entrust an unauthorized institution to engage in foreign exchange margin trading.
Event impact
ASIC has officially notified relevant brokers that any violation of overseas laws will be subject to strict scrutiny by regulators. ASIC said it would consider whether brokers violated overseas laws while violating the "efficient, honest and fair" service requirements of Australian law.
At the same time, ASIC is also examining whether AFS licensed securities firms make misleading or deceptive statements about the scope, application process or application purpose of the AFS license.
ASIC also said that brokers should not "make misleading or deceptive statements about the scope or application or effect of their AFS licenses in their marketing materials, websites, social media platforms and disclosure documents."
The EU regulatory framework for retail foreign exchange and spread contracts includes anti-tax avoidance provisions. Brokers who actively solicit customers to transfer to their Australian subsidiaries, as well as brokers who promote products outside ESMA's CFDS regulatory framework, are said to have violated these rules.
Failure to comply with these requirements may lead to regulatory action. ASIC emphasizes actions taken under section 915C of the Company Act 2001.