Disliked{quote} As the article said, it's not an attempt to remove B-booking. By definition: any time the broker is fully exposed to your trade, there is a conflict of interest. Once again, this will come down to the details, the keywords used in definitions and the general process of legislation which will be a consultative process involving both sides of the debate. When you dissect even the vague comments in this article, you can already see where the grey areas will be fought. {quote} In other words... any B- Booking activity should not be done in breach...Ignored
Second, regarding Australian brokers and ASIC, I am NOT putting down Australian brokers or ASIC. They both do have merit BUT I am just pointing out the difference the fact that it DOES allow the brokers to use clients' funds in their hedging operations AND towards the margin used in hedging, two things that ARE explicitly forbidden by other regulatory bodies like FCA in UK does make it easier for b-booking brokers to exist and exist with more risk to the clients. And regarding speculations, I did NOT say brokers are allowed to use client funds in their own speculative operations. All I am saying is they ARE allowed to engage in speculative operations in general and NOT disclose about it which is true. I am NOT picking on IC Markets per se but their PDS and the PDS of any b-booking brokers in Australia is the standard that is allowed under ASIC which reflects exactly what is allowed under ASIC.
Third, with regards to regulators, I am aware of their aspirations and limitations and also many times their hidden agenda when it comes to regulating financial markets. And even though retail fx might not have been designated as a "legitimate investment product" to begin with, there is no reason WHY retail fx cannot be developed into one if it can be properly regulated with unfair dealing practices eliminated or mitigated just like with other financial instruments. Maybe this ESMA proposal can be a good start.
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