Australia wants to introduce its own regulations "ESMA"

Australian financial supervision, ASIC, presented a project that provides for the introduction of product intervention for Forex / CFD instruments similar to European ones. As a result of the changes, the amount of financial leverage is to be reduced, as well as greater retailer protection.

Consultations until October 1

ASIC proposes to limit the leverage to a maximum of 1: 20, introduce a ban on offering binary options instruments, introduce protection against negative balance, as well as limit marketing and harmonize risk disclosure obligations. These are almost the twin ideas he introduced pan-European ESMA regulator last year.

The proposed leverage is to be:

• 1: 20 - for currency pairs and gold,
• 1: 15 - for stock indexes,
• 1: 10 - for goods (excluding gold),
• 1: 5 - for other assets (including CFDs on shares),
• 1: 2 - for cryptocurrencies.

The deadline for consultation and discussion on the project expires on October 1 this year. If there are no new ideas, there is a good chance that the changes will come into force this year.

Escape to Seychelles?

Australia, as a country with less than 25 million inhabitants, has proved to be an extremely absorbent market. The relatively large number of brokers operating there, high service standards and (so far) high leverage, according to some estimates, attracted over a million traders from around the world. Will it suddenly change now?

It is known that Australian brokers are not sitting with arms folded. Larger companies already in June this year announced the possibility of transferring their clients' accounts on unchanged (and sometimes more preferential) conditions to another jurisdiction such as Seychelles or St. Vincent and the Grenadines. In this way, Australians want to maintain the current trading conditions for customers while maintaining the same standard of service.

ASIC message available here.