ASIC Decrees Tsunami Prompts Brokers to Look for Client Insurance

The tsunami which stormed through the Australian brokerage industry last week is leaving local firms scratching their heads about their next move. While some companies are reportedly looking to explore legal options to fight the latest decisions of the Australian Securities and Investments Commission (ASIC ASIC The Australian Securities and Investments Commission (ASIC) is the prime regulator in Australia for corporate, markets, financial services, and consumer credit. It is empowered under the financial service laws to facilitate, regulate, and enforce Australian financial laws. The Australian Commission was set up and is administered under the Australian Securities and Investment Commission Act of 2001. ASIC was initially the Australian Securities Commission based on the 1989 ASC Act. Initially, the The Australian Securities and Investments Commission (ASIC) is the prime regulator in Australia for corporate, markets, financial services, and consumer credit. It is empowered under the financial service laws to facilitate, regulate, and enforce Australian financial laws. The Australian Commission was set up and is administered under the Australian Securities and Investment Commission Act of 2001. ASIC was initially the Australian Securities Commission based on the 1989 ASC Act. Initially, the Read this Term) to force them to drop clients from overseas, other options are on the radar, too.

Finance Magnates can confirm that a number of Australian brokers have been exploring additional insurance schemes to protect their overseas clients. This is tied to a broad-based move of clients from Australia to other jurisdictions offshore.

A senior compliance officer of a brokerage company with an ASIC license confirmed to Finance Magnates that the company is looking for alternatives for its clients outside of Australia.

With the recent shift of the European market in the same direction, offshore regulatory jurisdictions are now getting popular with Australian brokers too. Labuan and Vanuatu are probably the hottest destinations in the region, however, the latter has lately become much less attractive.

Convincing Clients

In the meantime, brokers need to put in an extra effort in order to convince their clients to move to offshore subsidiaries. One strategy is to seek additional insurance on client funds; a move aimed to secure more stringent protection of the deposits which customers make with their brokers.

According to insurance industry professionals with knowledge of the matter, the London insurance market uses professional consultants to conduct due diligence on the broker interested in buying the insurance.

The assessment includes the financial strength of the firm, regulatory filings, and risk procedures as well as looking at the macro environment of each jurisdiction and the capital and regulatory requirements and other factors.

Since the client funds are the goal of the insurance, however, the focus of providers in on a broker’s handling of Client Money Client Money Client money refers to the money or margin – which may be any currency in the form of cash, check, draft, or electronic transfer – that a firm receives or holds for a client. Money held by a firm in the form of a stakeholder, which is are not payable on demand or immediately due, also refers to client money. The definition of client money does not apply to money held by businesses that operate in its own name on behalf of a client. Although the client does have to be in agreement before this arr Client money refers to the money or margin – which may be any currency in the form of cash, check, draft, or electronic transfer – that a firm receives or holds for a client. Money held by a firm in the form of a stakeholder, which is are not payable on demand or immediately due, also refers to client money. The definition of client money does not apply to money held by businesses that operate in its own name on behalf of a client. Although the client does have to be in agreement before this arr Read this Term funds. Segregation and appropriate reporting procedures are playing a large part in the decision to sell an additional insurance policy to the broker.