ASIC crackdown on OTC derivative providers
The Australian Securities and Investments Commission (ASIC) is warning of the dramatic increase in unlicensed conduct by retail over-the-counter (OTC) derivative providers.
ASIC's compliance investigation found that retail OTC providers were trying to expand their new customer markets, by offering complex and risky products such as binary options.
ASIC found both licensed participants, and other OTC participants, especially binary option providers, offered financial services to retail investors (through an online platform or website) without appropriate licensing or authorisation.
The corporate watchdog raised concerns with 40 unlicensed providers. Of those, 21 agreed to take remedial action to ensure they no longer provided financial services in Australia, until they became authorised or licensed.
A further nine companies avoided responding to ASICs concerns, but changed their websites and removed references to Australia.
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