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The Interest in over the counter(OTC) foreign exchange (forex) trading is mounting among retail investor in Australia. That’s according to a speech on Wednesday by Cathie Armour, commissioner of the Australian Securities and Investments commission(ASIC). On Wednesday at the ACI redefining conduct in FX markets seminar in Sydney there was an Verbal communication , Armour eminent that the number of retail clients trading OTC derivatives has doubled in the past two years.
Following a assessment in April 2019, ASIC found that there are now more than 60 contracts for difference (CFD) and binary options issuers licensed in Australia. The annual revenue for OTC derivatives was $21 trillion. The regulator found that 1 million investors are participating in this markets, 99 percent of which are retail consumers. For the OTC derivatives 675 million transactions were made in 2018. For the Forex products it was more than 60 percent and 426 million This is considerably higher than the regulator’s preceding review when there was only 165 million transactions in FX products.
The Armour notes that for FX products, there has been a large upstick in interest. Not only that, but this enlargement has been much faster than the growth in the number of CFD or binary options transactions over the same period. In Armour’s own words The ASIC commissioner also barbed out quite a few flaws in the Clients reside offshore and many forex issuers offer Leverage of 400:1 and higher, which provides $2 million exposure on a $5000 investment,
That’s astounding disclosure. We will prolong to review the data we have gathered and will address the Key themes and concerns that occur from the analysis.
We see that products or practices in this sector have resulted in or likely to consequence in, Significant consumer harm then we will address this harm using the full range of power available to us . The Armour also stated that ASIC has lately closed its consultation period for its proposed product intercession measures. The Supervisory body plans to execute these temporary measures once it has review the Criticism.