In anticipation of leverage changes for Forex and CFD trading in Australia, the Australian Securities and Investments Commission (ASIC) has updated its regulations regarding wholesale investors. Following the change, the so-called ‘price and value test’ is no longer being used to classify such investors as wholesale.
Specifically, the price and value test provided by s 761G(7)(a) of the Corporations Act 2001 (Cth) allows licensees to classify clients as wholesale where the price or value of a financial product provided to a person exceeds AU$500,000. The amended regulations do not affect other wholesale investor tests.
As such, the regulator is going away with a policy that let customers who are trading volumes of $500K or more to operate as wholesale traders. This signals that future changes to leverage on Forex and CFD will be universal and impact all segments of traders in Australia, much like in other regions, including Europe and the UK.