ASIC calls out retail OTC derivatives providers

— 1 minute read

The corporate regulator has taken action against 40 unlicensed retail over-the-counter (OTC) derivative providers, the majority of whom are binary options issuers.

In a statement released yesterday, ASIC warned of a “dramatic increase” in the amount of unlicensed conduct by retail OTC derivative providers operating in the Australian market.

ASIC has been vocal about the failings of the OTC retail derivatives market, going as far to label the retail OTC market ‘non-compliant’ on 22 June 2016.


Yesterday’s statement identified 40 unlicensed providers, 21 of whom have agreed to co-operate with ASIC to take “remedial steps to ensure they are no longer providing financial services in Australia until they are appropriately licensed or authorised”.

“The majority are binary option issuers but also contacted were some binary option review websites, binary option trading signal providers, binary option broker affiliate websites, margin FX providers and managed FX service providers,” ASIC said.

Remedial actions included removing references to Australia on their websites, ceasing marketing campaigns directed at Australian investors, ceasing marketing campaigns directed at Australian investors and closing down existing Australian accounts.

Some of the 40 entities contacts have indicated a desire to become properly licensed in Australia, while nine have not responded to ASIC but appear to have made “some changes” to their websites (including removing references to Australia).

ASIC commissioner Cathie Armour said the “dramatic increase in unlicensed conduct, particularly in entities offering binary options, is of real concern to ASIC”.

“We remind investors to be wary of advertising on websites or unsolicited calls or emails by people offering these types of products, and to verify that product providers are appropriately licensed or authorised before dealing with them,” she said.


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ASIC calls out retail OTC derivatives providers
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