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Screenshot of a breaking news alert e-mail from Q2 2017
Gretchen Friemann of the Australian Business Review has some details on some newly talked about requirements from Australian Forex brokerage regulator, the Australian Securities & Investment Commission (ASIC). The rule changes are said to have come as a result of the damage to brokers around the globe caused by the Swiss franc shock, which is still being felt across the FX industry landscape almost 3 weeks after the spike.
In a statement to The Australian, a spokesman for ASIC stressed the moves in the Swiss currency had produced a “very changed environment”. He said: “From a licensing perspective, we will look to have regards to these recent events when considering applications by proposed new entrants to the market. This includes considering the implications of such events on the licence applicant’s business model and their risk-management processes.”
While no concrete requirements were mentioned, we will continue to monitor any new concrete sets of requirements coming from regulators which will effect the FX brokerage sector. Currently, ASIC regulated FX brokers must hold $1.1 million on their balance sheet as a buffer against any losses, this is one requirement that is rumored to be looked at.
However, If you have been following the Swiss franc fall out, you are aware that Aussie based brokerage houses were relatively unscathed from the CHF spike, many of the damages occurred in other jurisdictions. For a leading Australian based brokerage perspective, check out a LeapRate interview conducted yesterday with AxiTrader CEO Goran Drapac, who spoke on these exact matters.
For the Australian Business Review article, click here.