Foreign financial services companies offering their services in Australia will have to adjust to new and improved rules that the Australian Securities and Investments Commission (ASIC) will be pushing for in the near future. The regulator has landed on February 2024 as the starting time frame for its reforms, a date after which all foreign brokers and fin companies will be mandated to report all their transactions directly to ASIC.
Sophie Gerber, Co-CEO of TRAction Fintech and Principal of the Sophie Grace legal firm, explained that any financial company, be it a broker or otherwise, that targets Australian clients will have to step it up and make sure it fully complies with the relevant Australian laws and regulations.
It was in November 2020 that ASIC first propose these reforms in a consolation paper at that time, clearing these up on top of coming up with new rules in a consecutive paper from May 2022. The new reforms are finalized and ready to be implemented as per a paper published last month.
Currently, offshore and foreign financial services companies can onboard Aussie clients without any consequences, which is especially lucrative for brokers without a license from ASIC that don’t have to comply with local regulations, many of which attempt to curb risky investor behavior. The implication of the new rules will require all such foreign businesses to comply with the local rules, or face a cease and desist order.
ASIC has to keep up with the expanding markets industry, while also retaining is reputation without compromising certain tenants. These new regulations will be major, just as big or bigger than past monumental choices, like the one to restrict retail leverages to 1:30, or choices concerned with marketing strategies.