EXCLUSIVE: ASIC Leverage Restrictions May Come Through Before End of 2020

Source: Fazzaco 2020-06-15

In the Key Updates From Global Regulatory Frameworks session held on June 10 as a part of Virtual Vision Finance, Sophie Gerber, the co-CEO and director of TRAction Fintech, talked about the actions taken by Australian Securities and Investments Commission (ASIC) during this time of adversity. It seemed like ASIC had no sign of loosening its regulation on the market.

ASIC Haven’t Dropped Product Intervention Measures

In August, 2019, ASIC proposed a leverage limit for currency pairs at 20:1, lower than ESMA, and with only 60 market makers in the country, the regulator received at least 400 pieces of feedbacks, according to Gerber.

Despite client losses, “it does seem ASIC haven’t dropped the issue,” Gerber Noted.

“They certainly have indicated in their revised priorities, since they released revised priorities, based on what’s happening with coronavirus. But the delay of this consultation paper and leverage restrictions wasn’t included in that. So they are not ruling it out. So I think we can still expect to see that come through probably sometime before the end of the year.”

Also, the Federal Court’s recent decision has affirmed ASIC’s use of its power in relation to short-term lending, which would “give confidence to ASIC to go ahead with the product intervention.”

ASIC License May See a Flowback

When asked about the difficulty in getting license from ASIC, Gerber emphasized “tenacity” might be the most important because they “waited for two and half years for ASIC to approve their application.”

As for licence transaction, she also noted that “there was a gap in the market” because “there’s not many people left selling, but many people want to buy.” She added, “(There was) the news out of Bahamas last week that licensing is going to have leverage restrictions on this as well, and I think we are probably starting seeing a flowback to places like CySEC and ASIC for licensing and onboarding. So I think the value frankly is probably gonna go up, rather than down from here.”

It has been reported that ASIC broker license price hit $4 million after European Securities and Markets Authority (ESMA) conducted leverage restrictions.

Virtual Vision Finance

ASIC

ASIC Ban

EXCLUSIVE: ASIC Leverage Restrictions May Come Through Before End of 2020

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