Powered by MOMENTUM MEDIA

Interactive Brokers to refund investors

By Reporter
 — 1 minute read

US-based online brokerage firm Interactive Brokers has agreed to refund approximately $1.5 million in fees and commission payments to Australian retail margin lending customers.

The refunds are part of an enforceable undertaking (EU) with ASIC.

An investigation by the regulator found Interactive Brokers did not hold an Australian financial services licence which authorised the provision of margin loans between July 2010 and August 2013.

Advertisement
Advertisement

During the period, approximately 3,000 retail customers took out a margin loan with Interactive Brokers.

Under the terms of the EU, Interactive Brokers admitted it had contravened the Corporations Act 2001 by not holding an authorisation under its licence to provide margin loans.

Along with the $1.5 million in refunds to retail investors, Interactive Brokers has also agreed to pay $100,000 to the Financial Rights Legal Centre for the "purposes of consumer education concerning financial services and consumer rights in Australia".

Interactive Brokers has engaged PricewaterhouseCoopers to ensure that the customer refunds are calculated and paid in accordance with the terms agreed to in the EU.

ASIC commissioner Greg Tanzer said margin loans come with "unique risks and will not be suitable for all consumers".

"It is therefore important that they be provided by appropriately licensed or authorised companies," Mr Tanzer said.

"Providers must also comply with their responsible lending obligations when issuing margin loans," he said.

The ifa Excellence Awards are back in 2021 and nominations are now open!

This prestigious accolade recognises exceptional professionals within the financial advice industry, shining a light on the outstanding achievements from the nation's best and brightest. If this sounds like you or someone you know, then nominate today for the ifa Excellence Awards 2021! ifa.com.au/excellence-awards

 

Interactive Brokers to refund investors
investordaily image
ID logo

 

related articles

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.