Coronavirus stops changes in Australian leverage

In the middle of last year, Australian financial supervision ASIC announced reducing financial leverage on the CFD / Forex market. The coronavirus pandemic has limited these plans, however - at least for now. The regulator will now focus on counteracting the crisis and protecting retail investors from the fraudsters who emerge in these difficult times. The next deadline for making a decision on the leverage is September 30.09.2020, XNUMX. There is even a chance that ASIC I will give it up.

Australians wanted their ESMA

The ASIC plan assumed not only a limitation of leverage, but also a ban on offering binary options, introduction of specific guidelines on information about possible risk and protection against negative balance. The changes were to be similar to those announced earlier by the European regulator ESMA.

The reduced financial leverage in the project looks like this:

• 1: 20 - for currency pairs and gold,
• 1: 15 - for stock indexes,
• 1: 10 - for goods (excluding gold),
• 1: 5 - for other assets (including CFDs on shares),
• 1: 2 - for cryptocurrencies.

Check it out: Brokers offering stock CFD trading - Summary

The changes were to come into force at the beginning of 2020, but the date of their introduction was postponed. Also because the brokers immediately announced the transfer of their client accounts to the Seychelles. Strong voices of protest came from broker Pepperstone, who clearly indicated that this decision would bring more harm than good.

Now the leverage reduction has been shifted once again. This time the cause is coronavirus.

The pandemic stopped the lever

The Australian Securities and Investment Commission (ASIC) announces that its main field of activity today will be counteracting the economic crisis, which may be a consequence of a pandemic. It also wants to protect individual investors from fraudsters who want to take advantage of the coronavirus pandemic confusion.

Most representatives of the financial sector in Australia agree with the setting of new priorities.

“The product intervention proposal has already been identified as having a significant negative impact on tax revenues for the Australian economy, with a large number of Australian CFD providers being taxpayers and stable employers. Offshoring clients to other jurisdictions means less tax revenues for the Australian Government and job cuts. As the Australian government continues to announce costly stimulus packages to protect the economy from the coronavirus, it seems reasonable for the Treasury and regulators to delay measures that reduce tax revenues for the government - says Sophie Gerber, director of Sophie Grace and TRAction Fintech, cited by Finance Magnates.

Will the situation be good enough for the fall of Australia to bring initial ideas? Or maybe they will give up them completely? We will find out in six months.