Will ASIC delay leverage restrictions amid coronavirus pandemic

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Will ASIC delay leverage restrictions amid coronavirus pandemicThe Australian Securities and Investments Commission (ASIC) announced last March that it would shift its priorities amid the current coronavirus pandemic, and refocus its regulatory efforts to deal with the challenges created by the global crisis.

The Australian regulator will refocus its efforts until at least September 30, 2020. During this time, it will dedicate its resources to responding to the pandemic, addressing situations that have a risk of significant harm to consumers, serious violations of law, risks to market integrity and time-sensitive issues. For this reason, the ASIC commented Immediately a number of short-term activities that you consider not critical at the moment.

Will ASIC Defer Leverage Restrictions?

After the March statement from the ASIC, in the domain of foreign exchange (forex) and contracts for difference (CFD), one question arose - will the regulator delay the implementation of leverage restrictions? As the regulator reported, in August last year, the agency released an advisory paper on proposed product intervention measures. Unlike ESMA, ASIC said it will not distinguish between major and minor currency pairs. Instead, the agency proposes a limit of one leverage for all 20:1 currency pairs.

Is now the time for organizational change?

When asked if now was the right time for the Australian regulator to implement the regulatory changes, Gerber explained: “The product intervention proposal has already been highlighted as it has a significant negative impact on tax revenue for the Australian economy, with Australian CFD providers being large taxpayers and stable employers. Moving clients overseas to other jurisdictions means lower tax revenue for the Australian government and a job shift. "With the Australian government's expensive stimulus packages continuing to be announced to protect the economy from the coronavirus, it may seem reasonable for the Treasury and regulators to delay actions that would reduce the government's tax revenue."

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