One week ago, Australian Securities and Investments Commission (ASIC), in accordance with the new Product Intervention Law, was granted with a set of ‘tools’ that can be applied if brokers offer their products to wrong customers.

ASIC has already started to actively use its new powers. The regulator has issued a data collection notice to brokers, requiring a great deal of information. Companies regulated in Australia are required to provide ASIC with all types of information, including client numbers, for the period of time since December 2017 till March 2019. Among other things, the report also needs to divide clients by type, place of residence, as well as indication of amount of client’s funds held in each jurisdiction.

Additional attention to European clients

According to the data which the ASIC has requested from brokers and the reporting period, it seems that the regulator is seeking to understand how ESMA’s regulation affected the local market. The brokers are also required to disclose to the regulator how many clients were transferred from overseas entities between January 2018 and March 2019.

Insights

In accordance with the latest changes, brokers are obliged to inform the ASIC whether their employees’ compensation is related in some way to deposits, trading volumes or profits and losses of clients. The overall information requested, including 2017 and 2018 turnovers, revenues by asset class, position details, swap rates, and many more are turning this report into a nightmare of every local broker.

ASIC has also requested information in regards to the manner of how the business is conducted – A-book and B-book division, usage of a hybrid model and what are the criteria for assignment of clients to one of the models. Liquidity partnerships, hedging counterparts, white label agreements, referral agents and every other aspect of a broker’s business is to presented for inspection.

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