Australian forex brokers between transferring clients or continuing

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Australian forex brokers between transferring clients or continuingAs the deadline for Australian forex brokers to submit a large amount of data to the Australian Securities and Investments Commission (ASIC) is approaching, the brokers' strategic approach to dealing with the situation is quite different.

Some companies have been subject to regulatory demands from the Australian watchdog. They proactively inform their overseas clients of closing their accounts. And the latest group of companies who have joined this team are some of the leading names in the forex brokerage industry.

Over the past two days, AxiTrader, IC Markets and OANDA Australia have become the latest companies to inform their overseas clients that their accounts will face serious changes. The first two mentioned have offered their clients to transfer their accounts to offshore affiliates in Saint Vincent and Seychelles respectively.

As far as we know, there are quite a number of other companies that seem to be continuing business as usual, at least when it comes to non-Chinese customers.

official legal documents

Earlier this year, ASIC required brokers to provide the regulator with legal documents that enable companies to do business with overseas clients. We can confirm that many companies have acquired those documents as required, allowing them to serve clients outside of Australia. Some brokers even obtained documents showing ASIC that they are legally allowed to operate in China.

The relationship between Australian and Chinese regulators over recent months has become detrimental to the industry, and many brokers believe ASIC is largely abusing its powers. However, the Australian watchdog is preparing to enforce product intervention powers in the near future.

While both AxiTrader and IC Markets indicate that clients can maintain their accounts in Australia, the companies do not provide any guarantees to traders whether or not they will be able to maintain the same trading conditions and in particular the leverage.

While some ASIC-regulated brokers have resisted some of the regulator's demands, others are choosing a safer method and telling foreign clients about the migration for their accounts. Clients do not need to take any actions to migrate their accounts to the brokers' overseas branches.

However, if they do not wish to migrate, they should opt out by filling out an online form. Some Australian brokers have chosen to apply for European licenses over the past few months, and it can be said that they are able to advertise their services in the EU.

China and..Hong Kong

While the ASIC regulated brokers have been divided around the rest of the world, their operations in China have declined in the recent period. Companies are looking for ways to continue operating, but most have faced pressure from local authorities and significant obstacles, especially when it comes to taking money from China.

According to an email from OANDA Australia to a customer in Hong Kong, the company is stopping serving its customers in the region. The client was not given the opportunity to roll over the account, as the broker implicitly states that all positions must be closed no later than July 12.

Australian forex brokers between transferring clients or continuing
Photo: OANDA Australia letter to customers in Hong Kong

OANDA Australia also states that it will automatically close the account before July 19. After escalating tensions between China and Hong Kong, it appears that brokers are reassessing their presence in China's Special Administrative Region.

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