Five global investment banks are facing a cartel class action lawsuit after a suit was filed at the Federal Court yesterday, via InvestorDaily.
Maurice
Blackburn Lawyers, who is also taking on AMP in a class action, have
launched the suit against UBS, Barclays, Citibank, Royal Bank of
Scotland and JP Morgan, claiming the banks colluded to rig foreign
exchange rates.
The suit alleges that between January 2008 and 15
October 2013, traders in chat rooms bearing names such as ‘The Cartel’
and ‘The Mafia’ communicated directly with each other to coordinate the
manipulation of FX benchmark rates.
“The chat rooms included
those named ‘The Cartel’, ‘The Mafia’, ‘One Team’, ‘One Dream’, ‘The
Players’, ‘The Three Musketeers’, ‘A Co-Operative’, ‘The A-Team’, ‘The
Sterling Lads’, ‘The Essex Express’ and ‘The Three Way Banana Split’,”
according to Maurice Blackburn’s statement of claim.
It is
alleged that the actions resulted in the pricing of ‘spreads’ and the
triggering of client stop loss orders and limit orders.
“Sharing
with each, alternatively one or more, of the other respondents, and/or
one or more of the other cartel participants, information in relation to
trade in FX Instruments with respect to one or more of the affected
currencies, including in relation to trade volumes and/or trade
strategy,” said the statement of claim.
The alleged conduct has
been the subject of extensive regulatory and private enforcement action
worldwide including settlements in the US and Canada resulting in the
payment of US$2.3 billion and CA$107 million respectively.
Some
of the allegedly affected currencies include the Australia, Canadian,
New Zealand and US dollar as well as the Russian ruble, Indian rupee,
the Euro and the British pound.
Maurice Blackburns principal
lawyer Kimi Nishimura said that the cartel behaviour could have affected
a number of Australian business and investors.
“Australian
businesses and investors – particularly medium to large importers,
exporters, institutional investors and businesses with operations
overseas – have been affected by the distortion of the FX market by
these banks.
“Such cartel behaviour cheats Australian businesses
in circumstances where they may already have been vulnerable to currency
fluctuations,” she said.
The class action will be represented by
lead plaintiff J.Wisbey and Associates, a medical equipment importer,
but is open to any customers that brought or sold currency during the
period where total value of transactions exceeded over $500,000.
Spokespeople for the banks involved did not issue a statement at time of writing.
The NSW Supreme Court has selected law firm Maurice Blackburn to be the one to take a shareholder class action against AMP following last year’s royal commission; via InvestorDaily.
Five
law firms, Maurice Blackburn, Slater & Gordon, Phi Finney McDonald
and Shine Lawyers, all filed class action lawsuits against the financial
services company seeking compensation on behalf of shareholders.
The
actions followed a drop in AMP’s share price after testimony at the
royal commission last year, which was followed by the resignation of
AMP’s then chief executive and chairwoman and the dismissal of its
general counsel after criticism of his handling of a report by Clayton
Utz.
NSW Supreme Court Judge Julie Ward chose Maurice Blackburn,
whose funding model under their “no win, no pay” promise she considered
the best.
“In the present case the combination of: absence of a
separate funding commission; the incentive created by an uplift in fees
only once a specified resolution sum is achieved; the comparable return
based on standardised assumptions and the fact that no common fund order
is being sought, seems to me to point in favour of the [Maurice
Blackburn] funding model,” Judge Ward said.
The case against AMP alleges AMP engaged in misleading and deceptive conduct and breached its Corporations Act obligations when it failed to disclose its practice of charging fees for no service and in its interactions with ASIC.
An
AMP spokesperson welcomed the decision to permit only one class action
to proceed and said they would defend against the proceedings.
“AMP
will continue to vigorously defend the class action proceeding. AMP
denies the allegation that it had information that was required to be
disclosed to the market regarding ‘fees for no service’ and AMP’s
interactions with ASIC (including in respect of the Clayton Utz
report).”
AMP also noted that Maurice Blackburn had been ordered to pay millions in security for AMP’s legal costs.
“The selected class action has been ordered to pay $5 million in security for AMP’s costs,” said AMP
A
class action by Slater & Gordon will be consolidated into the
Maurice Blackburn case but with the latter running the litigation
alone.
Maurice Blackburn’s national head of class actions Andrew
Watson was pleased with the result and said he looked forward to getting
on with the job.
“We are pleased that the Court accepted that
Maurice Blackburn’s funding model could help deliver the best returns to
group members. We look forward to getting on with the important job of
obtaining a recovery for affected AMP shareholders.”
Class
actions typically take a long time to reach a conclusion with the next
date set for next week for a directions hearing, which is a largely
procedural issue.
Aussie Home Loans boss James Symond has described the mortgage industry’s mammoth lobbying efforts as a “case book study” in uniting a competitive industry – via InvestorDaily.
Few
sectors of the financial services universe had more riding on the 2019
federal election than mortgage broking. A Labor victory would have been a
devasting blow to the third-party channel, which is responsible for
helping most Aussies secure finance to buy a home.
“The industry
banded together. You couldn’t be prouder of them all. This is a case
book study of an industry that felt vulnerable and came together and
stepped up to defend itself,” Mr Symond told Investor Daily. “You had
individual mortgage brokers working in small businesses around the
country having one-on-one meetings with MPs,” he said.
Regardless
of what their individual political views might have been, this election
was deeply personal for mortgages brokers, who earn an average of
around $86,000 – far from what some might consider the “big end of town”
that Labor was hell bent on destroying. Shorten effectively galvanised a
formidable opposition in the third-party channel by failing to back
down on remuneration changes.
After the Hayne royal commission
recommended scrapping broker commissions, the industry quickly united to
lobby both sides of the government. The result saw an enlightened
coalition confirm no changes would be made to broker remuneration.
Labor, on the other hand, would act on Hayne’s view and ban trail
commissions while introducing a higher cap of 1.1 per cent on upfront
commissions.
With
the opinion polls prior to the election pointing to a Labor victory,
the mortgage industry was making one hell of a gamble.
“It was
very much a bet, because we couldn’t infiltrate Labor,” Mr Symond said.
“With the Liberals, we got onto the right people who listened, who were
open to being educated about how the mortgage broking industry operates
and its value to consumers. But Labor was simply not interested.
“We got lucky that the coalition got back in. We don’t have to worry about the fact that Labor wouldn’t listen.”
It
was a major misstep for Labor not to interact with the mortgage broking
fraternity, given the opposition’s strong stance on economic matters.
Negative gearing reforms were a major policy for Labor, which could have
easily won over an army of mortgage brokers and the first-home buyers
they represent by coming to the table on remuneration. Linking
affordability and home ownership with the value proposition of a
mortgage broker is easy enough to spin.
On the flipside, those
with negatively geared properties who use the services of a broker would
be highly unlikely to vote for a Shorten government. Including many
brokers themselves.
“Labor had their own agenda,” Mr Symond said. “They didn’t give a hoot about mortgage brokers.”
“Thankfully the coalition got in, because it would’ve been a different story if they didn’t. We have some stability now.”
The
broking industry has the government on its side and will continue to
drive competition in the mortgage market – something that was in serious
jeopardy if Labor had succeeded and scrapped trail commissions.
In
addition to Aussie Home Loans, listed broking businesses like Mortgage
Choice, AFG and Yellow Brick Road – which recently confirmed that it is
doubling down on mortgages – will be the obvious beneficiaries of the
Coalition’s win.
What will be interesting to watch is how the
major banks react. While they have historically moved as a group, the
question hanging over the broking industry has led them in different
directions in recent years.
The royal commission and the 2019
federal election were arguably the final battles in a multiyear campaign
that has ultimately sealed a victory for the third-party channel and
the millions of home buyers it serves.
Brisbane group Blue Sky Alternative Investments has gone into receivership following the breach of its $47.7 million loan facility from US-based Oaktree Capital Partners., via InvestorDaily.
The fund is now considering its options including a wind-down and a return of capital to shareholders.
“This
appointment is necessary if Blue Sky is to maintain its investment
teams, key clients and stabilise the operations and capital structure of
the business,” Blue Sky told its shareholders.
The
company added its administration follows “a period of significant
instability and uncertainty for all stakeholders, including further
commentary regarding possible class actions, turnover of senior
corporate executives and departure of certain partners. There is
considerable work to be undertaken in the immediate future.”
Blue
Sky had $2.8 billion in fee earning assets under management as of 31
March, down from its half year result of $3 billion as reported at the
end of December.
Blue Sky has now paused
trading, but closed on Friday with its shares at 18 cents. They had once
reached $14.99 in November 2017.
The company reported a $25.7 million loss for the half year, which it attributed to its business restructuring costs.
Mark
Korda and Jarod Villani of advisory and investment firm KordaMentha
have been appointed as receivers and managers, while Bradley Hellen and
Nigel Markley of Pilot Managers will be acting as voluntary
administrators.
KordaMentha partner Mark Korda said the appointment would not affect the day-to-day operating activities of the asset manager.
“Our
objective during the first phase of the receivership is to stabilise
the business as a strategic assessment is undertaken,” Mr Korda said.
“Existing
management and key contacts for relevant stakeholders, employees and
unitholders will continue to be in place as normal.
“It
will allow greater flexibility for the restructure of Blue Sky and seek
to ensure the future of the business as an alternative asset investment
management platform.”
Oaktree had given the Brisbane-based asset manager the loan facility in September last year.
The
US investment group’s managing director Byron Beath resigned as a
director on the Blue Sky board as the loan breach was announced to the
market
A new report has found that APRA has “downplayed” and “dismissed” competition risks associated with its regulatory reforms, according to a new report, via InvestorDaily.
A new report commissioned by the Customer Owned Banking Association (COBA) and compiled by Pegasus Economics – titled Reconciling Prudential Regulation with Competition – has found that changes to the regulatory capital framework have undermined competition in the mortgage market.
According
to the report, the Australian Prudential Regulation Authority (APRA)
did not give enough credence to competition risks when applying the
internal ratings basis (IRB) method for calculating risk weights
provided for under Basel II – a banking regulations framework designed
to promote financial stability.
The report found that under Basel
II, credit and operating risk weights determined under the standard
method were “much higher” than those under the IRB method used by the
major banks.
Research from the Reserve Bank of Australia was
cited, in which the central bank found that at the end of June 2015, the
average risk weight of residential mortgage exposures using the IRB
method was 17 per cent, compared to 40 per cent using the standardised
approach used by smaller lenders.
The
report noted that as a result of the disparity, higher costs were
incurred by lenders using the standard method, which influenced the
pricing of lending products and, in turn, reduced competitiveness with
major banks.
According to the report, due to the imbalance, the
major banks have enjoyed a funding cost advantage in excess of $1,000
annually on a residential mortgage of $400,000.
“APRA downplayed
as well as dismissed competition concerns during its implementation of
Basel II and did not follow due process by completing the required
competition assessment checklist in the Regulation Impact Statement it
prepared for Basel II,” the report noted.
“The actions of APRA, in turn, implies the competition-fragility view of banking is endemic to the organisation.
“The
outcomes arising from the interaction of the global financial crisis
(GFC), coupled with the implementation of Basel II, vindicates the
criticisms of Basel II from a competition perspective.”
The report
went on to state: “Through its implementation of Basel II, APRA put
smaller ADIs at a major competitive disadvantage and undermined
competitive neutrality.
“The available evidence suggests the
interaction of the GFC combined with the implementation of Basel II
provided a major fillip to the major banks to the detriment of other
ADIs.”
In addition, the report found that APRA’s decision to
increase the average risk weight for IRB banks from an average of 16 per
cent to a minimum of 25 per cent has prompted some lenders to engage in
“cream skimming” by targeting home loans with the lowest risk profile,
which focused competitive pressures on “high-demand” borrowers.
“Cream
skimming has adverse consequences as it skews the level of risk in
house lending away from the major banks and towards other ADIs who have
to deal with an adversely selected and far riskier group of home loan
applicants,” the report noted.
With APRA set to release a draft
revised capital framework, the COBA-commissioned report called for
policy measures that would ensure regulation does not continue to
“stifle” competition in the banking sector.
The recommendations include:
Addressing
the lack of coordination between prudential regulation and competition
policy and overcoming the “competition-fragility view” of banking, which
the report stated would ensure that competition considerations are
given due deliberation in prudential regulatory policy decisions through
a statutory secondary competition objective for APRA.
Compelling
IRB banks to hold more capital, which the report stated would reduce
the fragility of the banking system and ensure benefits achieved from
injecting greater competition into the banking system can be realised.
Increasing
granularity for risk weights for banks using the standardised approach,
which would “improve competition in home lending”.
Reflecting
on the findings of the report, COBA CEO Michael Lawrence said it’s
“timely” given the “acute need for a competitive and efficient home
lending market”.
“Following the financial services royal
commission, there’s a renewed focus on how regulators and government can
improve competition in banking and ensure major banks are accountable
without reducing financial stability,” Mr Lawrence said.
He
added: “The rules on risk weights mean there is too large a gap between
the amount of capital that smaller banks must hold compared to the major
banks.
“The report says APRA should be looking to close the gap
in risk weights and it should ensure that it does so in a way that
prevents the major banks cream-skimming the lowest-risk home loans.”
Mr
Lawrence recently welcomed the passage of the Treasury Laws Amendment
(Mutual Entities) Bill 2019 through both houses of Parliament.
The
bill includes a new definition for a mutual entity as a company where
each member has no more than one vote, changes to demutualisation rules
to ensure that it is only triggered by an intended demutualisation, not
by other acts such as capital raising, and the creation of a
mutual-specific instrument that can be used to raise capital.
COBA
has also published a ‘Comptetition Agenda’ahead of the federal
election, designed to promote pro-competitive reform in the banking
sector.
A damning new report recommending extensive reform in the financial sector has taken aim at fund managers that pay a sponsorship fee to have their product offered on wraps and platforms, via InvestorDaily.
In its 60-page report entitled Professionalising Financial Advice,
the CFA Institute and CFA Societies Australia detailed their concerns
over the practice where some platforms or adviser groups place ‘wraps’
around existing funds and then market their own ‘products’ to clients as
a way to access certain funds or investment managers.
“This
allows the adviser to charge higher fees than would apply if the client
was given direct access to the underlying investment product,” the
report noted.
While the royal commission final report did not cover platform fees in detail, Hayne’s interim report stated:
Licensees
may and often do include third party manufacturers of products on their
approved product lists (including the approved product lists maintained
by platforms) but, much more often than not, advisers recommend that
clients use products that are manufactured by entities associated with
the advice licensee with which the adviser works.
Related
to this practice is the issue of fund managers paying a ‘sponsorship
fee’ or ‘shelf space fee’ to have their products offered on platforms,
the CFA Institute said.
“This means that even if a firm claims to
be independent and use ‘open architecture’ (offering access to all
products), the best products are not necessarily those that are put in
front of a client seeking advice.”
In its comments on platforms,
the interim report of the Hayne royal commission noted that the charging
of platform fees evoked comparisons with “fees for no service” because
the default setting seemed too often to be “set and forget”.
“Charging
platform fees evoked comparison with inappropriate advice because, very
often, the platform that an adviser recommended the client use was a
platform provided by an entity associated with the licensee with which
the adviser was aligned or by which the adviser was employed and the
arrangements were allowed to stay in operation despite the platform not
remaining cost-competitive” said Mr Hayne in his interim report.
“Both
the practice of ‘set and forget’ and the ways in which fees for, and
services provided by, platforms could remain unaltered over time show
that customers using platform services exert little or no effective
competitive pressure on platform operators.”
The CFA Institute
argues that, just as when recommending investment products, financial
advisers should have the client’s best interest in mind when
recommending an investment platform.
“This is consistent with the
financial services regime which treats platforms as financial products
and hence best interest must be observed when one is recommended.”
The CFA Institute also warned about fund managers paying to have their products rated by rating agencies.
“The
conflict is obvious – an agency is being paid by a fund manager to rate
that manager’s fund offerings. [A] fund manager also may shop around to
find an agency that will provide them with a better rating. They then
pay this rating firm and advertise the resulting rating of their funds
in their marketing material,” the report said.
The inaugural review of the Notifiable Data Breaches Scheme has revealed that the finance sector is one of the most at-risk sectors when it comes to data breaches, via InvestorDaily.
The
Notifiable Data Breaches Scheme was set up over a year ago when it
became a legal requirement for entities to carry out an assessment
whenever they suspected that there had been a data breach.
The
report, that looks back over the scheme’s last 12 months, found that the
finance sector had the second highest number of data breach
notifications under the scheme.
In 12 months the NDB reported 964
notifications of which 134 were made by the finance sector with human
error accounting for 41 per cent of the data breaches.
“The
consistent presence of the health and finance sectors at the top of the
rankings throughout the year likely reflects the scale of data holdings,
volume of processing activities and/or sensitivity of the personal
information held by those sectors, as well as those sectors’ higher
preparedness to report data breaches,” said the report.
The
scheme is clearly working given that data breach notifications went
from 127 under the voluntary scheme in 2018-19 to 722 as a result of the
compulsory scheme.
The report also acknowledged that the finance
sector had a great financial reward for cyber criminals which they
attributed to the rise in attacks in recent years.
“Accordingly, a
high proportion of finance sector breaches—56 per cent—were attributed
to malicious or criminal attacks,” it said.
Despite this, contact
information was the most common form of personal information disclosed
through data breaches, with 86 per cent of notifications.
Over
half of all breaches (60 per cent) across the regulated entities were
attributed to malicious or criminal attacks with phishing continuing to
be the most common method.
There was also 28 per cent of cyber
incidents where credentials were obtained by unknown means as the
entities had not detected any phishing-based compromise.
Fortunately,
83 per cent of breaches affected fewer than 1,000 people with most
attacks affecting just one person, but there were 19 attacks where an
unknown number of people were affected.
The Australian
information and privacy commissioner Angelene Falk, who operates the
scheme, said that many entities were actively engaged with the scheme to
create better practices.
“Many entities have taken a proactive
approach in engaging with the OAIC, and we have been able to work
constructively with those in their response.
“As the year has
progressed, some maturation has been evident in entities assessing the
likely consequences of a data breach and in their subsequent
notification processes,” she said.
Moving forward Ms Falk said that she expected entities to take proactive steps to prevent breaches.
For
the finance industry, steps are already being taken with the
introduction of APRA’s prudential standard on information security which
will help ensure the finance sector’s resilience to information
security incidents.
“I encourage entities regulated by the Privacy Act
to review the report and use the learnings to enhance their prevention
and response strategies for the benefit of all Australians,” said Ms
Falk
A
review of APRA’s 2013 superannuation prudential framework has found it
met its original objectives but must keep evolving to ensure members’
interests are protected.
APRA commenced a post-implementation
review of the framework introduced as part of 2013’s Stronger Super
reforms in May last year, to assess how it had performed in the five
years since it was introduced. Until the package of 13 prudential
standards, supporting guidance and reporting standards came into force,
registrable superannuation entity (RSE) licensees were not subject to
legally binding prudential standards in the same way as other
APRA-regulated entities.
The review found the prudential framework
had materially lifted industry practices in key areas as governance,
risk management and outsourcing. But it also highlighted the need for
APRA to continue strengthening prudential requirements in several areas,
including board appointment processes, management of conflicts of
interest and life insurance in superannuation.
APRA’s review
stated that appropriately managing conflicts of duty and interest is
critical to ensuring that RSE licensees comply with their overarching
obligation to act in the best interests of members.
“However, the Royal Commission noted a number of
areas where RSE licensees appeared not to have managed their conflicts
of interest appropriately, particularly with respect to related party
arrangements,” the regulator said.
While APRA’s review found that
the key procedural requirements of its conflcits management framework
(SPS 521) have “generally been met at an industry-wide level”, the
regulator said it is not clear that the importance of effectively
managing all potential conflicts of interest through a members’ best
interests’ lens is embedded within the culture of all RSE licensees.
APRA’s
proposed enhancements to mitigate conflicts of interest in
superannuation include requiring RSE licensees to explicitly assess the
impact of conflicts of interest on member outcomes and introducing a
two-stage process for the consideration of conflicts of interest.
“First establish interests held, then establish whether those interests give rise to a conflict,” the regulator said.
APRA’s
thematic review noted that policies underlying the conflicts management
framework were in some instances too narrowly focused on conflicts
arising in relation to responsible persons and did not cover conflicts
arising for the RSE licensee as a whole.
“This narrow approach
undertaken by some RSE licensees tended to be characterised by a lack of
consideration of how these conflicts might be perceived by external
stakeholders,” the regulator said.
“The thematic review also
noted that, in many cases, the conflict identification process relied
solely on self-identification by directors or responsible persons, with
no independent review undertaken. It also found a lack of consistency
across the industry in the identification and management of conflicts
when dealing with intra-group services and product providers and other
related parties. These inconsistencies arose, in part, due to
inadequacies in the conflicts management framework for these types of
RSE licensees.”
APRA Deputy Chair Helen Rowell said it was
important that the prudential framework continued to evolve as the
industry developed and regulatory priorities changed.
“The
Stronger Super reforms deliberately focused on ensuring superannuation
trustees that often manage billions of dollars on behalf of members had
the necessary frameworks in place to effectively administer the
fundamentals of operating their business,” Mrs Rowell said.
“As
the industry has matured and lifted its practices, we have shifted our
emphasis to ensuring trustees are focused on enhancing member outcomes,
especially with last December’s package of reforms.
“We are
already taking steps to strengthen the prudential framework in many of
the areas highlighted by the review, and we will look to make further
changes to incorporate its findings as we progress our superannuation
policy priorities. This will include consideration of measures to
address relevant recommendations in the financial services Royal
Commission report and the report on the Productivity Commission’s
superannuation review.”
The latest global bank ratings from S&P Global Market Intelligence has once again concluded that China’s big four state-backed banks are the world’s largest, via InvestorDaily.
The
big four – Industrial & Commercial Bank of China, China
Construction Bank Corp, Agricultural Bank of China and Bank of China –
posted a combined $13.647 trillion in assets, up $1.727 trillion since
last year.
A weakened dollar hampered the US bank’s rankings with
Wells Fargo & Co being pushed out by France’s Credit Agricole Group
to take the number 10 spot.
Strengthening currencies assisted a
number of banks in the Asia-Pacific region, with the Chinese yuan
appreciating by 6.81 per cent against the US dollar in 2017.
This
let the four Chinese banks post $13.637 trillion, which was up 14.43
per cent from 2016. Had the yuan remained flat against the dollar, the
institutions would only have posted US$12.768 trillion in assets.
JP Morgan Chase & Co took out number 6 but
would have taken number 4 if the company reported under IFRS, which
requires the gross value of derivative assets to be reported, rather
than the net value which it currently reports.
Eighteen of the
top 100 banks are based in China with $23.761 trillion in assets,
followed by the US with 11 banks holding $12.196 trillion and then Japan
with eight banks at $10.534 trillion.
The largest bank in
Australia was Commonwealth Bank with $751.39 billion in assets taking
out number 43, down from last years 42.
ANZ came in next at spot
45, falling two spots from 2017’s 43 and then Westpac took out spot 47
which was up from last year’s 48 and NAB came in at 50, down from 49.
In
the Asia-Pacific region, three of Australia’s big four took out spots
in the top 20, with CBA, ANZ and Westpac taking out rankings 18, 19 and
20 respectively. NAB, meanwhile, was just behind in spot 22. The big
four were the only Australian banks to make it into the top 50 for the
Asia-Pacific region.
China again dominated the top 50 with 21
institutions, followed by Japan and South Korea who had eight and six
institutions respectively.
There were two new comers to the list,
one from Taiwan, CTBC Financial Holding which placed 46 with US$180.03
billion in assets and Indian-based HDFC which took out number 50 with
$169.53 billion.
ASIC has warned Australian financial services licensees that offer over-the-counter derivatives to retail investors located overseas could be breaking laws abroad, with Chinese authorities having alerted the watchdog that some online platforms have engaged in illegal activity, via InvestorDaily.
Regulators
in jurisdictions including Europe, Japan, North America and China have
restricted or prohibited the provision of certain OTC derivatives, such
as binary options, margin foreign exchange and other contracts for
difference (CFDs) to mitigate harm to retail investors.
ASIC has
expressed concern that some OTC derivative issuers that hold AFSLs may
be marketing or soliciting overseas clients to open accounts with
Australia-based licensees on the basis of avoiding overseas intervention
measures.
The regulator said is it considering whether breaching
overseas laws is consistent with obligations under Australian law to
provide services ‘efficiently, honestly and fairly’.
ASIC is also
considering whether it will see AFSL holders could be making misleading
or deceptive statements about the scope or effect of their license.
“AFS licensees who break the law in overseas
jurisdictions, or who mislead retail investors about their services
undermine the integrity of the Australian licensing regime,”
commissioner Cathie Armour said.
“ASIC will not tolerate that conduct.”
Chinese
authorities have already informed ASIC that “some online platforms are
illegally engaged in forex margin trading activities”.
Under Chinese law, no institution or agency has approval to carry out margin foreign exchange trading.
Temporary
product intervention measures have also been extended in Europe by the
European Securities and Markets Authority, with authorities in the UK
and Germany introducing permanent measures including anti-avoidance
provisions.
“AFS licensees offering OTC derivatives to overseas
retail clients should, as a matter of priority, seek advice on the
legality of their offerings to these clients,” commissioner Armour said.
“Any non-compliant activities should cease immediately and be notified to ASIC and the relevant overseas authorities.”
