Sneak Peek: TRAction Fintech and Australia's Coming Reporting Rules

Following the 2008/09 global financial crisis, one of the results was the initiation of more rules surrounding over the counter (OTC) derivative trades. In relation to the Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term and CFD market, this has meant the rollout of reporting requirements across several jurisdictions.

The most notable of these reporting rules are those that have been set forth in the EU through the European Markets Infrastructure Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term (EMIR) that was initiated by the European Securities and Market Authority (ESMA). With the new EMIR reporting laws, it has led to any institution (even non-financial firms) in the EU that is involved with certain types of derivatives to report their trades to a trade repository such as the Depository Trust & Clearing Corporation (DTCC).

Following the initiation of reporting requirements for retail brokers in the EU, among the next jurisdictions set to rollout new rules for margin forex and CFD trading is in Australia. Supervised by the Australian Securities and Investments Commission (ASIC), brokers will be required to report their forex and CFD trades starting on October 12th. Similar to other jurisdictions, the DTCC has been designated by the ASIC as the trade repository for brokers to report to.

With the initiation of reporting rules taking place around the globe, initial feedback has been the difficulties of matching reports from trading platforms to trade repository formats. As a solution, several products in the EU have sprung up to assist firms with converting their trading reports to satisfy EMIR requirements. With the requirements for forex and CFD brokers coming in Australia, a new firm, TRAction Fintech has recently launched to provide reporting services.

Headed by Quinn Perrot, former executive at AxiTrader and Sophie Gerber who also operates a compliance legal consultancy firm for brokers, TRAction Fintech will be offering an automated solution for Australian brokers to report their trades to the DTCC. Speaking about the new venture with Finance Magnates, Gerber explained that TRAction Fintech has “custom built a software suite to connect to MetaTrader.” The product then “extract, covert, reconcile and submit the relevant trades and positions required under the OTC Derivatives reporting rules.” Gerber added that for brokers using platforms other than MT4, TRAction Fintech will work with them to customize the extraction and conversion of data. .

Explaining the friction involved with reporting, Gerber stated, “If a broker works on their own, they need to extract data from MT4 or other platforms and covert into the DTCC format.” She added that the difficulty is due to a “mismatch between MT4 and DTCC requirements.”

As the October 12th date approaches, Gerber stated that there are currently around 35 ASIC regulated retail brokers that will begin to fall under the new reporting requirements. In terms of TRAction Fintech, Gerber cited that the product will be available as a volume-based offering with prices similar to those being charged by the DTCC.