ASIC is preparing to take charge of market supervision from the ASX within a few months, bolstering the corporate regulator’s power when it comes to scrutinising trading and monitoring stockbrokers. The ASIC deputy chairman, Belinda Gibson, said the regulator was planning to issue a discussion paper within two months warning about the high-risk instruments.

The $350 million CFD market grew by almost 25 per cent last year, but many investors might not understand the risks they are taking, Ms Gibson said, after speaking at a Stockbrokers Association of Australia Conference yesterday. CFDs allow investors to bet on movements in the prices of assets such as shares, currencies or commodities, and require only a small amount of up-front capital.

They were developed for sophisticated players, but have become popular with retail investors. ”We do have a concern whether a lot of people in the CFD market do understand this is a leveraged play into equities and they really understand counterparty risk with CFD providers,” Ms Gibson said.

Separately, ASIC revealed in taking charge of supervision it will be able to contact clients of stockbrokers directly if it believes suspect trading has taken place. Under the present rules, the ASX is limited only to investigating brokers and then refers the matter to the corporate regulator. The new arrangement will allow ASIC to move quicker to question investors if it suspects matters ranging from insider trading to front running of shares have occurred.

ASIC Keeping An Eye On CFD Growth – SMH

ASIC Keeping An Eye On CFD Growth – The Age

ASIC Keeping An Eye On CFD Growth – Australian

Filed under: CFD News by LearnCFDs.com
No Comments »

In IG’s year-end trading update the company said that pre-tax profits for the 12 months to May 31 would be £162 million once a one-off £5 million charge is ignored — or about 12 per cent higher than consensus forecasts. The shares surged more than 10 per cent.

More volatile prices present more opportunities for IG’s clients to make money, prompting a surge in new account openings and a pick-up in trading. So it is that IG’s revenues in the UK rose 17 per cent in the last quarter of its financial year — an impressive feat, given tougher year-on-year comparisons, and persistent fears that IG had stopped growing in its most mature market. There was progress, too, in Japan, where, after a series of false starts, IG appears to be gaining momentum. Fourth-quarter revenues from the country were up 60 per cent on the previous quarter, with volatility — this time in currencies — again playing a significant part.

The attraction for now is that IG continues to grow at home and abroad — especially in Australia, Germany and France, now sizeable markets. Such expansion also brings steadily higher operating margins: aside from the initial marketing expenditure, IG can add new customers at little extra cost.

IG Group CFD Profit Increase

Filed under: CFD News by LearnCFDs.com
No Comments »

High Net Worth Investors are turning to Contracts for Difference (CFDs), according to a survey conducted by Investment Trends. The survey focused on investors with $1 million or more in investable assets outside their home. Investors indicated the most likely products they would invest in were exchange-traded funds, contracts for difference (CFDs), and commodity and resources funds. Johnston said the strong interest in CFDs was surprising as these instruments are not commonly used by HNW investors,  costs but said it came off a relatively low base.

Filed under: CFD News by LearnCFDs.com
No Comments »