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Australian Securities and Investments Commission (ASIC) Brokers 2024

Written By

Tobias Robinson

Written By

Tobias Robinson

Tobias is a partner at DayTrading.com, director of a UK limited company and active trader. He has over 25 years of experience in the financial industry and contributed via CySec to the regulatory response to digital options and CFD trading in Europe. Toby’s expertise and dedication to financial education make him a trusted voice in the industry, including a BBC investigation into digital options.

» Tobias Robinson Profile Page

Fact Checked By

William Berg

Fact Checked By

William Berg

William contributes to several investment websites, leveraging his experience as a consultant for IPOs in the Nordic market and background providing localization for forex trading software. William has worked as a writer and fact-checker for a long row of financial publications.

» William Berg Profile Page

Updated

Aug 13, 2024

Brokers regulated by the Australian Securities and Investments Commission (ASIC) must abide by a range of measures to protect the interests of retail investors. This guide explains how the ASIC improves the financial system in Australia, alongside the agency’s history and safety protocols. Our team have also listed the leading ASIC-registered brokers.

What is ASIC?

So before looking at basic rules and regulations on trading and of the markets in general, what precisely is the ASIC? They are an independent governmental and regulatory body. The purpose of the Australian Securities and Investment Commission is to protect Australian consumers and investors. Their role sees them responsible for the following duties:

• Implementing and enforcing the law
• Processing, storing and managing information efficiently
• Encouraging confident and informed investor participation
• Maintaining and improving the performance of Australia’s financial system
• Promptly making public relevant data and information about companies and bodies

The organisational structure of the Australian Securities and Investments Commission is relatively straightforward. The regulatory body reports to the treasurer, who is responsible for the administration of the subsequent legislation:

• Corporations Act, 2001
• Insurance Contracts Act, 1984
• National Consumer Credit Protection Act, 2009

History

ASIC was originally the Australian Securities Commission (ASC) and came to life on January 1st, 1991 after the 1989 ASC Act. Initially, the idea was to unite regulators in Australia by replacing the National Companies and Securities Commission and the Corporate Affairs offices.

It wasn’t until July 1st, 1998 that the regulator became the Australian Securities & Investments Commission (ASIC). At this point, the website, databases and legislation also became concerned with consumer protection, insurance and deposit-taking.

The Australian Securities and Investment Commission 2001 regulations were a substantial stride towards effectively overseeing and improving the financial system. However, in its more recent history, ASIC has taken on responsibilities for:

• 2002 – Credit
• 2009 – The Australian Stock Exchange
• 2011 – Chi-X

It’s also worth mentioning that on March 15th, 2011, ASIC launched a consumer website called MoneySmart. Putting regulations to the side, this website aims to help individuals make smart financial decisions by providing a range of unbiased tools and information.

Powers

Day trading with brokers in line with ASIC regulations should afford you a certain degree of protection. However, they also enact responsive regulations and follow guides for enforcing their powers across a number of services. In fact, their regulatory and enforcement powers include:

• Issuing infringement notices when there is a breach of the law
• Seeking out penalties from courts and proceeding with prosecutions
• Creating and implementing rules that ensure the integrity of financial markets
• Banning and preventing people from participating in credit activities or offering financial services
• Investigating breaches of the law, including requiring suspects to produce books or undergo examination

Australian Market Regulation Feed

One service of particular importance is the Australian Market Regulation Feed. To monitor trading activity, brokers and market operators have to facilitate access to ASIC’s Integrated Market Surveillance System. This means brokers and other relevant bodies in the registry must allow daily access to:

• All orders, trades and quotes that are processed and circulated by the trading engine
• All messages related to trading sessions, product price and status

This is just one of the Australian Securities and Investments Commission’s services that helps to protect the interests of consumers and traders.

Criticisms

Despite the Australian Securities and Investments Commission undertaking many successful investigations and functions, it hasn’t all been without problems. For example:

• In recent years ASIC has faced criticism from consumers for inaction in protecting customers from larger financial institutions.
• 2015-2016 saw ASIC taken to court by those who suffered at the hands of the Storm Financial Collapse. It was thought ASIC’s inaction was enough to warrant malfeasance.
• ASIC failed to act against Australia’s Financial Ombudsman Service when they released misleading file notes during the discovery phase in a Victorian Supreme Court case.
• It took over five years of Australia’s major banks rigging interest rates before ASIC took action.
• The Australian Securities and Investments Commission registration process could be made simpler, while guidance on navigating the registry could be improved.

Why does this matter to day traders who are concerned with their specific market regulations? It’s important because it suggests ASIC may not be as effective and reliable as they claim to be. As a result, it could be argued that ASIC may fail to detect or act when ASIC regulated brokers breach rules and regulations.

Final Thoughts

ASIC regulations and rules around day trading are in place to protect consumers. Their extensive scope, in theory, allows them to keep brokers in check and traders somewhat secure from scams and fraudulent activities.

However, it’s also worth noting there have been criticisms levelled at ASIC in recent years, suggesting their regulations may not be quite as reliable and comprehensive as initially thought.