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ASIC finds several forex brokers in violation of client money handling requirements.


Recently the ASIC(Australian Securities and Investments Commission) released the results of its investigation into client money handling and reconciliation practices by issuers of OTC CFDs and margin FX.

 ASIC embarked on a industry wide investigation last December(2011) and is halfway done as of the beginning of June. The ASIC is the first majour regulator in the world to undertake a majour review of it's registrants after the 2008 financial crisis.


The ASIC has so far discovered the following issues with several registrants:

  • Eight firms failed to allocate client money into the designated trust account.
  • Six firms failed to pay money into appropriate account within the allowed time(within one business day).

The official press release by ASIC regarding the investigation can be read here

The ASIC has not yet released which firms were in vilation of the rules, however they have followed up with all member firms and educated them on how to properly handle client money and what is considered good practice.

 The ASIC commissioner Greg Tanzer stressed that ASIC regulated firms are bound to comply with the client money provisions:

 “The client money provisions are an important safeguard to protect the interests of retail investors…ASIC expects issuers to know and comply with their obligations under the law and to put in place effective measures and supervisory arrangements to ensure these obligations are met.”

Mr Tanzer said the announcement should serve as a warning to those issuers who aren’t complying with the law.

Australia was the first major world financial CFD trading in a centralized exchange where no counter party risk exists. The CFD trading is offered by London Multi Asset Exchange.

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