Following the announcement last week by the Australian Securities and Investments Commission (ASIC) regarding new restrictions on retail CFDs in the country, the regulator has begun to receive responses from several prominent online brokerages, according to Finance Magnates.
Interestingly, most of the responses were of a positive nature and noted that the brokerages welcome the changes, with some indicating they do not foresee any material impact to their business as a result of the new CFD restrictions.
Plus500 CEO, David Zruia said: “we welcome these new regulations being introduced by ASIC, which are broadly as expected following the announcement of its consultation in August 2019. The regulations will be rapidly and seamlessly adopted by Plus500. The Company is already compliant in most of the areas covered by the proposed regulation, and we will further adapt our business model where additional changes are required.”
IG Group commented that “the measures, which will take effect from 29 March 2021 and apply to retail clients only, are broadly consistent with those proposed by ASIC in its initial consultation. The leverage restrictions are now in line with those already implemented by the European Securities and Markets Authority in August 2018.”
CMC Markets for its part signalled a change in acquisition strategy, indicating that they will focus on ‘high quality, experienced clients’ in an effort to avoid impacts on profitability, which in fiscal year 2020 had 23% of the it’s net operating income generated by CFD trading.
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