Shifting FX, CFD Segregation Laws in Australia Garner OANDA Endorsement

Multi-asset brokerage OANDA has found itself facing a number of new regulatory changes across multiple jurisdictions, with the latest alterations coming in Australia, with the country’s Federal government moving forward with a new law on foreign Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term (FX) and contracts-for-difference (CFD) providers.

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The Australian government recently embarked on a regulatory initiative that supported the segregation of client funds amongst FX and CFD providers. The announcement comes the same week that saw the UK and its Financial Conduct Authority (FCA) institute a wide range of changes to its leverage requirements.

Minimal Changes Needed

In both instances, OANDA has supported the measures of each respective regulator, with the new mandates largely falling in line with its current practices. For example, 75% of trading done via OANDA’s European subsidiary based in London, OANDA Europe, has been transacted by clients that use 1:50 or lower Leverage Leverage In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders Read this Term.

OANDA’s endorsement of the new measures in Australia also coincide with its membership of the CFD Forum, which acts as an industry body dedicated to enhancing the efficient operation, transparency, and overall investor understanding and confidence in the Australian CFD market.

According to Stephen Andrews, Managing Director at OANDA Australia, in a recent statement on the regulations: “We fully support the government’s move to introduce the mandatory segregation of client funds. This new law will bring Australia in line with other international markets that ensure client funds are protected and secure.”

“We welcome this legislation as it will not only safeguard investors but it will also ensure that Australian FX and CFD markets are underpinned by a strong regulatory framework,” he added.