IC Markets’ Australian subsidiary recently announced that it intends to stop providing service to clients who reside outside of Australia at the end of the month. The retail broker informed clients of this development by way of an email which stated that it could no longer guarantee the provision of trading service to individuals who do not reside within Australia.
This makes IC Markets the third broker regulated by the Australian Securities and Investments Commission (ASIC) to halt the acceptance of clients outside of Australia in the last month. Recently, Vantage FX and IFGM each sent an email out to clients, informing them that their account would soon be closed or migrated over to non-regulated subsidiaries.
The email sent to clients by IC Markets served as notice about the upcoming changes, with the the broker announcing that it would automatically migrate all non-Australian clients over to their subsidiary, True ECN Trading Ltd., which is the business name of IC Markets Seychelles. Clients were given the option to opt-out of the migration, but were told that if they did not, they would not be allowed to actively trade after the 30th of June.
True ECN Trading Ltd. is regulated by the Financial Services Authority of Seychelles. As such, it will still be able to provide the same high leverage available to clients trading with IC Markets. Clients quickly took to social media to voice their concerns over the change, with many remaining undecided as to whether or not to accept the migration and continue trading with the Seychelles-based subsidiary. Many did exhibit relief at the fact that there would be no change to the maximum leverage ratio.
In the email shown below, IC Markets makes it clear that the migration would be seamless for clients and that their account balances, open positions and existing orders would not be impacted. The brokerage went on to add that clients would still be able to access their trade history and that all clients would be able to continue trading as usual once the migration is completed.
What was the reasoning behind this change? For months now, the Australian Securities and Investments Commission (ASIC) has been pressuring retail Forex trading firms to halt their business dealings outside of Australia. Specifically, ASIC has voiced concerns over brokerages accepting clients residing within China.
As of this past April, ASIC was given intervention powers by Australian parliament. This very well may mean that leverage caps and marketing restrictions similar to those seen in the European market may soon make their way into the Australian market. The implementation of such changes, along with the impact of this current move on the part of IC Markets remains to be seen.