ASIC reminds managed discretionary account providers about new license requirements

Maria Nikolova

From today, MDA providers without the required AFS licence authorisations must cease providing MDAs.

The Australian Securities & Investments Commission (ASIC) has reminded managed discretionary account (MDA) providers of their new license obligations that come into force today. In a notice, published on its website today, ASIC informs all managed discretionary account (MDA) providers must now have an Australian financial services (AFS) licence, with an MDA-specific ‘dealing by issue’ licence authorisation.

The new rules stipulate that, from today, MDA providers that do not have the required AFS licence authorisations have to stop providing MDAs until they have obtained those authorisations.

The regulator explains that an MDA is a facility where client portfolio assets are managed on an individual basis by an MDA provider at the MDA provider’s discretion (subject to any limitation agreed with the client). MDAs are often used by financial advisers and varying terminology is used to refer to these products, such as separately managed accounts, individually managed accounts, investment advisory programs or managed discretionary portfolio services.

ASIC first informed market participants of the revised AFS licence requirements in September 2016. Since then, 59 AFS licensees have applied for authorisation to operate as an MDA provider to transition and there are 244 licensees who have an MDA specific ‘dealing by issue’ authorisation.

The Australian regulator says it will conduct reviews to check that MDA providers hold the relevant AFS licence authorisations and will take action if unlicensed activity is identified.

Let’s recall that, on September 29, 2016, ASIC updated its regulatory guidance on its relief for MDAs with the publication of revised Regulatory Guide 179 Managed discretionary accounts.

MDA providers that relied on ASIC’s no action position for MDAs operated on a regulated platform have had two years (that is, until today) to transition to the revised requirements and either obtain the necessary AFS licence authorisation or stop their MDA activities.

Read this next

Retail FX

US Retail FX brokers suffer steep fall in client deposits, Trading.com racked up $46K

Retail FX deposits at US brokerages, which have been struggling to eke out a profit in a strict regulatory environment, dropped in March 2022 by $35 million, CFTC data showed.

Retail FX

eToro supports Immutable X (IMX), Livepeer (LPT) and Cartesi (CTSI)

Israeli social trading network eToro has added support for trading three new tokens. Immutable X (IMX), Livepeer (LPT) and Cartesi (CTSI) are the next coins to join eToro’s list of featured digital assets.

Executive Moves

LiquidityBook hires Fintech veteran Jonathan Cross to lead EMEA business

LiquidityBook, a provider of FIX and OMS trading solutions for both the buy and sell-side, has added Jonathan Cross to its business team for the EMEA region.

Retail FX

Interactive Brokers’ traders now have direct access to TradingView

Professional charting and trading platform, TradingView has integrated the US-listed brokerage firm Interactive Brokers as the latest online trading partner.

Digital Assets

This Web3 infrastructure provider is on the verge of a radical upgrade

The crypto industry fueled the anticipation of the arrival of web3 with the introduction of Decentralized Finance, Metaverse, and more. And today, that web3 is finding support from various developers looking to build and develop the space to extract the most benefits out of it.

Digital Assets

Crypto bots: trading assistant 

The cryptocurrency market is a volatile one, with huge gains and dramatic dips. However, the most informed traders can use automated tools to maximize profits while minimizing risks. 

Retail FX

Cryptos Seed Review – What Makes This Broker Stand Out (2022)

Read our Cryptos Seed review today to learn all you need to know about Cryptos Seed before signing up with the broker(cryptos-seed.com) – by Finance Feeds.

Institutional FX

Citadel goes live with FX NDFs trades on LCH ForexClear

“This builds on the strong growth at the service, which has historically been driven by a focus on margin efficiencies that will only increase with Phase 6 of the uncleared margin rules in September 2022.”

Digital Assets

Crypto platform Bitfrost registers as VASP in Gibraltar ahead of DLT License

“We’re now looking at the next steps necessary to obtain authorisation to operate as a fully regulated DLT or Virtual Asset Service Provider.”

<