ASIC review to put 'neobrokers' on notice
Australia’s online share trading platforms are bracing for a regulatory blitz as ASIC wraps up a two-year investigation into them.
The new generation of investment and share trading apps that exploded in popularity during the coronavirus pandemic are in the crosshairs of ASIC, with the corporate watchdog finalising a two-year review into the once red-hot sector.
A final report, expected to be published by the regulator in coming weeks, will seek to put the industry on notice and convey to Australia’s most prominent 'neobrokers' that their business practices are subject to close scrutiny, according to several sources familiar with the matter.
Chief among ASIC’s concerns are deceptive and misleading conduct in the industry, the proliferation of financial advice and information online, and insufficient internal compliance and supervision.
With the pandemic boom having long subsided and trading volumes falling away amid higher interest rates and cost of living, the regulator is increasingly worried that neobrokers will resort to products such as CFDs and cryptocurrency trading to supplement faltering revenues, which may pose unsuitable risks for most retail traders.
