ASIC Prioritizes Monitoring of CFDs and Binary Options Compliances

The Australian Securities and Investments Commission (ASIC) published on Thursday its four-year corporate plan for 2021 to 2025, outlining its priorities on the distribution of retail over-the-counter derivatives, especially on the contracts for difference (CFDs) and binary options.

The regulator pointed out three key actions on its intervention in the retail OTC derivatives industry. First, it will ‘monitor compliance with the contracts for difference and binary options product intervention orders’.

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Additionally, the Aussie watchdog imposed an 18-month ban on the retail sale and distribution of binary options in April and will later decide whether to extend the ban or make it permanent.

“Assess the effectiveness of the orders in reducing harm, areas of possible avoidance, and whether the orders should be extended,” the regulator noted as its second key action.

A No Tolerance Policy

In addition, ASIC has become vigilant in the financial services industry and is actively taking action against any regulatory violations. “Take regulatory action, including enforcement action where warranted, to address misconduct,” as the third key action shows its willingness to ramp up market surveillance.

The agency kept its actions on the retail OTC derivatives market under the stage 2 priority level.

The regulator stressed that it will use the regulatory tool to supervise and enforce any actions on violators. Meanwhile, the agency is now focusing on the booming cryptocurrency industry and has issued a warning against unlicensed exchanges offering services to Aussie traders.

“We will continue to take opportunities to support businesses through more efficient regulation. At the same time, we will continue to be vigilant in protecting consumers and investors from harm,” ASIC Chairman, Joe Longo said.