The Australian Securities and Investments Commission announced Thursday it has identified significant compliance failures across nine online brokers offering complex products including short-dated exchange-traded options, futures, and fractional shares to retail clients. The review, conducted between March and June, examined Interactive Brokers Australia, Moomoo Securities Australia, Sharesies Australia, Stakeshop AFSL, tastytrade Australia, Tiger Brokers, Totality Wealth, Trading 212 AU, and Webull Securities Australia.
ASIC found brokers failed to adequately define target markets for complex products, used poorly designed client questionnaires that allowed unlimited retakes, and offered promotional incentives that obscured risk warnings. Five firms improved practices during the review, while two suspended new options client onboarding. One provider has since exited Australia, and ASIC has flagged potential enforcement action against others. The regulator stressed that product governance obligations extend beyond initial onboarding throughout the entire client relationship.
FXnCO Insight
Brokers offering leveraged retail products should immediately audit their client screening processes and target market definitions, as ASIC’s expanded scrutiny now reaches well beyond CFDs into exchange-traded derivatives.
Source: Finance Magnates