ASIC comes up with reporting rules for foreign brokers targeting Aussie clients
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The Australian Securities and Investment Commission (ASIC) is tightening the reporting rules for foreign financial firms operating in Australia. The financial markets regulator plans to ramp up enforcement efforts to ensure that Aussie brokerage companies comply with Australian laws.
ASIC creates reporting rules for foreign brokers
The ASIC has said that from October 2024, foreign brokerage platforms operating in the country will have to report local transactions to the Aussie regulatory body. The derivatives transaction rules reported by the ASIC were first proposed as part of derivatives transactions rules highlighted in a consultation paper published in November 2020.
The ASIC later came up with clarifications in another consultation paper released in May 2022. The regulatory body has finalized the new rules on the matter, according to a response paper published last month.
A principal at the Sophie Grace law firm, Sophie Gerber, explained the ASIC’s new reporting rules, saying that the regulatory body now required brokers targeting Aussie clients to comply with the Australian regulatory framework.
“Incorporating reporting requirements into these scenarios where a firm comes within the parameters of ASIC regulation is an important additional regulatory tool because it creates scope for ASIC to see the extent of this activity, which would be difficult for them to ascertain otherwise,” Gerber said.
ASIC’s commitment to regulatory compliance
The ASIC is showing much commitment to ensuring that brokerage companies are compliant with the set regulatory guidelines. Once these rules are enacted, the Aussie regulator will require all the firms to comply. It could issue a cease and desist order to firms operating outside the regulatory guidelines.
The ASIC oversees the activities done by all financial service companies that have received an Australia Financial Services (AFS) license. However, no law in place bars foreign brokerage platforms from extending their services to clients based in Australia.
The existing ASIC guidelines were initially drafted in 2015, and since then, the cryptocurrency market has witnessed significant changes. The rewriting of these rules shows that the regulator has a broader interest in the transaction activities of retail clients based in Australia and foreign brokerage platforms.
The new rules published by the ASIC are also broad, requiring any company conducting its operations in Australia and targeting Australian clients to review the new requirements to sustain their operations in the country.
The ASIC’s release of these new reporting guidelines aligns with the EMIT Refit, which will also be implemented in early 2024. The guidelines will allow global crypto firms to allocate resources to transaction reporting.