From Australia to the Bahamas
The ASIC have announced that they don’t want any of the brokerage firms situated in Australia to cater non-Australian clients. Chinese media outlets have claimed Forex Broker FXCM is transferring Chinese traders from Australia to the Bahamas. According to a report announced on 3rd of October by Sohu, a media outlet located in Beijing, clients that were trading with FXCM were forced to leave Australia. Sohu stated that traders were notified via an email from FXCM that they had until October 19th to apply for a new trading account with FXCM in the Bahamas.
The trading account transfers will occur at the beginning of November. Although Sohu’s report concentrated on Chinese traders, it’s probable that the Australian branch for FXCM will be moving all of its non-Australian clients to other entities.
What Happened in Australia and ASIC?
This is because of pressure from Australian authorities that has been on the rise for the past. In April, the Australian Securities and Investments Commission (ASIC) said that brokers, including FXCM, should stop interacting professionally with international clients.
Although this applies to all international consumers, ASIC decided to release this particular statement because of a direct result of pressure from the Chinese government. Since the ASIC issued that order, some brokerage companies actually followed through and done what the ASIC asked them to do.
Several brokerage companies, including FXCM, have notified their traders via email that they would not be able to reach their Australian branches; this means that the traders would have to set up shop somewhere else but with the same company, if they choose.
However, not all of the brokerage firms followed in FXCM’s footsteps.
As a contrasting example, IC Markets stated that they would move traders’ accounts to its Seychelles branch. However, soon after, the brokerage firm returned to its senses and backpedaled by stating that customers will be able to continue to trade with their Australian branch, despite the ASIC’s statement.
ASIC specifically instructed brokerage firms in Australia to stop offering their financial services to foreign clients or non-Australian clients by the end of June, but that did not appear to have been implemented. Brokerage firms are still uncertain and dubious on whether to follow through and transfer clients away from their Australian branch, or if they should just ignore the statement and continue the way they used to.
FXCM decided to follow through, and transfer all of their foreign clients from the Australian branch and to the Bahamas.