Financial planners may have an easier time fulfilling their clients’ international asset allocation after a new accord was forged by ASIC and United States Securities and Exchange Commission (SEC).
The two regulators signed a mutual recognition agreement late on Monday that will form the groundwork for Australian and US investors to easily access stocks in each other’s markets.
Under the agreement, broker-dealers would be allowed to operate in both countries without separate regulation, saving compliance costs and time in setting up business.
ASIC and SEC would be conducting joint supervision of both markets, offer investors protection and regulating the products sold.
It is understood the deal will allow Australian retail investors to trade US stocks more easily through their broker.
For example, Commsec currently uses Bank of New York (BNY) to offer Australians access to US stocks.
Under the deal, CommSec can purchase US stocks directly for its clients, instead of by more costly means such as the use of BNY.
The accord will help better-position Australia as an international finance hub, Investment and Financial Services Association (IFSA) chief executive Richard Gilbert said.
“We hope with the benefit of practical experience under this agreement, both countries will see fit to expand the scope of mutual recognition to also include the cross-border offer of collective investment vehicles,” Gilbert said.
