Australia (for now) without Forex product intervention

It was supposed to be even stricter than in the European Union, but in the recently published strategic goals of the Australian financial market regulator (ASIC), it is in vain to look for details about product intervention, i.e. a significant reduction in leverage on Forex market i CFD for individual investors.

ASIC's strategic goals are set for the period 2020–2024. In the document that has just been released, we can find fairly general information for the next four years of the commission's operation. First of all, it contains many references to the coronavirus pandemic and all the perturbations that have swept through the financial markets in connection with it. What's more - experts predict that this is not the end of above-average volatility in the markets, so Australians are going to counteract the negative effects of these events.

The strategic document for 2020-2021 is more precise. It also lacks what most investors are waiting for, or what most individual investors fear - i.e. the announced change in the amount of financial leverage.

Australian surveillance and the effects of COVID-19

According to ASIC, the epidemic will develop dynamically. And the commission's task will be to counteract any negative effects and consequences of the lack of an effective cure for the coronavirus, which is expected to affect the global economy and financial markets.

ASIC's priorities for the next four years are:

• maintaining constant stability of the financial system,
• effective protection of consumers and individual investors against losses in the period of increased market volatility,
• supporting Australian businesses and entrepreneurs in responding to the effects of the coronavirus pandemic,
• continuous identification and combating unfair and harmful behavior of companies operating on the market that will want to take advantage of the situation to unfair behavior towards individual investors,
• building ASIC organizational capacity in difficult times,
• other measures to maintain investor confidence in the financial market.

ASIC will also work to reduce misconduct in the financial and  suing companies that use unfair practices. In addition to a firm stance against frauds and manipulators, the regulator also set itself the goal of protecting pensioners' money.

“Our main goal for the next four years is to ensure confidence in the financial system that, even under the stress of major turbulence, can remain fair, strong and efficient. Trust is the basis of the country's economic recovery " - underlines Hames Shipton, president of ASIC.

There will be no product intervention?

W published documents there is even no mention of the previously announced product intervention. And this despite the fact that they have already been read very carefully by many investors for whom this information was crucial.

We can read about product intervention only in the table that specifies ASIC activities. However, there is only a sub-point "Product intervention power" with the entry N / A (i.e. not applicable).

Where did the ideas of limitations come from?

The fact that we cannot read about product intervention on any of the pages of the strategy published by ASIC does not mean, however, that it will not happen. After all, it would fit in practically each of the points considered to be the main guidelines of the commission for the next four years - from restoring confidence in the financial market, through protecting individual investors, to securing the capital raised by retirees.

What changes were planned? Originally even more decisive than those introduced by the intervention ESMA in the European Union. On all currency pairs, the leverage for individual investors was supposed to reach 1:20, which met with huge opposition in the industry. Since then, the team has quietened significantly and there is less and less indication that the public discussion on this topic will return in the near future.