Online brokerage stops selling margin loans
A US-based online brokerage has ceased providing new margin loans to its Australian clients following an Australian Securities and Investments Commission (ASIC) investigation into the conditions of its Australian financial services licence (AFSL).
Interactive Brokers LLC’s current AFSL authorises it to deal in securities, derivatives and foreign exchange contracts, but the regulator raised concerns that its licence authorisation did not allow it to provide margin-lending facilities.
The company has advised its clients of this decision and made them aware of their potential rights, ASIC stated.
The regulator added that individual clients might wish to seek legal advice on their personal circumstances.
Interactive Brokers has since applied to vary its licence to deal in margin lending facilities.
ASIC’s inquiries into the brokerage business are continuing.
The regulation of margin lending started on 1 January 2010. Issuers of, and advisers dealing with, margin lending facilities require a licence to offer such services and products.
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