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

Eurotrader taps MahiMarkets’ cross-asset trading technology for pricing and risk management

Eurotrader has tapped MahiMarkets’ cross-asset trading technology to manage its pricing and risk management on its fully licensed and regulated retail brokerage operation covering forex, stocks, indices, and commodities. 

Technology

STT doubles user base as Sterling OMS adopted by TradeZero, Avenue, Banco C6

Sterling Trading Tech (STT) has announced record growth of its order management system (OMS) offering, doubling its user base throughout the second half of 2022.

Retail FX

CMC Invest announces flexible stocks and shares ISAs amid changes in UK policy

In addition to a flexible ISA, the Plus plan provides members with a USD currency wallet for their general investment account (GIA), alongside the default GBP wallet that comes with all CMC Invest accounts. This means users will hold both a GBP wallet and a USD wallet. Saving customers money on FX fees.

Executive Moves

The Trading Pit snatches Skilling Daniela Egli from Skilling to lead Cyprus operation

“We feel privileged to have Daniela join The Trading Pit and bring her extensive expertise to our prop trading firm. We are confident in The Trading Pit’s ambition to provide the ultimate global trading environment for talented traders to enhance their skills and eventually become professional fund managers.”

Industry News

Worldpay taps SheerID to allow merchants to better target their audiences

SheerID verifies over 2.5 billion people via 20,000 authoritative data sources; provides global insights from hundreds of the world’s leading brands, and never shares or sells customer data.

Crypto Insider

Cardano (ADA) Price For 2022-23: Buy Cardano With NAGAX

Cardano (ADA) is probably one of the most renowned and well-known cryptocurrencies out there at the moment and is currently available on the majority of the crypto exchanges and platforms in the market.

Retail FX

ACY Securities recognized by Salvation Army NSW for its support to charity work

““Sitting in the backyard of those family friends, to see the devastation the floods had brought, was a real eye-opener, and a testimony to the Salvos who were on the ground helping every one of those in need during the recent NSW floods.”

Executive Moves

BNP Paribas announces senior executives of Global Markets Americas division

French bank BNP Paribas has appointed several senior executives to its Global Markets Americas division, demonstrating its ambition to grow its Global Equities, Global Credit, and Global Macro franchises in the region. 

Technology

Match-Trade expands partnership with Takeprofit Tech

California-based FX technology provider Match-Trade Technologies has expanded its partnership with fintech software developer Takeprofit Tech.

<