CFD’s have been available to retail customers in the UK since the early 90’s, however it took much longer for CFD’s to be introduced in Australia. Early on CFD’s were favored as a way for hedge funds and investors to hedge their trades cheaply and efficiently. However as the 90’s progressed it became clear that Contracts for Difference had huge potential as an over-the-counter instrument. However it wasn’t until 2002 that Aussies could trade contracts for difference, since their introduction Contracts for difference have become increasingly popular. With the Australian Stock Exchange offering 50 exchange traded Contract for differences on the 50 biggest Aussie Stocks. These Exchange traded CFD’s haven’t stopped the big CFD providers from thriving in the Australian market with many of the big names being British based companies.

Recently, a number of providers have acquired ASIC (including FSA regulated Plus500) licences to both take advantage of the growing Australian market and as a way to gain a presence in the Oceania/Pacific area. All of this has been occurring against the backdrop of increased regulation. In order to legally accept Australian clients a Contract for difference provider must be regulated by ASIC. ASIC is short for the Australian Securities and Investment Commission who are responsible for regulating securities and investment in Australia. In mid 2012 ASIC announced new tougher regulation for those providing over the counter instruments to put ASIC regulation on par with British and Singaporean financial regulation. These changes have to be implemented by the 31st of January 2013. 

ASIC is also the regulator for other financial services, not necessarily binary options or CFD brokers. For instance, ASIC regulate commercial foreign exchange firms that provide FX hedging options (these firms don’t allow speculative trading for the purpose of profit, but rather focus on international payments). You can read about payment providers in Australia here.

The main changes to the regulation include increased capital requirements and greater liquidity requirements. The idea is to protect Australian citizens from being victims of another MF Global etc. This has be to a step in the right direction and will certainly reassure those who have already deposited money with an ASIC regulated broker or those who are planning to do so. It appears that ASIC may have found the right mix between being tough and avoiding driving away business.

The Australian CFD market is likely to continue to grow for several years and these new regulatory guidelines bring Australia closer into line with general international over the counter financial regulation.

Social trading has been a huge growth area in the past couple of years with a number of brokerages offering significant social trading features and others such as eToro building their entire business around Social Trading. So it something of a shock that OANDA has decided enough is enough and pulled its social trading platform less than a year after its launch. 

OANDA’s social trading platform fxUnity, was one of the few platforms in the industry to be powered by proprietary technology with the majority of brokerages opting for a third party solution such as FXJunction. However OANDA’s FxUnity platform hasn’t been particularly popular and has received some pretty stringent criticism from those who have used the platform.  

Traders using the fxUnity platform have been requested to close all open positions by 5pm on the 8th of March 2013. All trades that remain open at that time will be automatically closed by OANDA. All funds deposited with the fxUnity platform can be either withdrawn or transferred to a standard OANDA account. 

There has been no comment from OANDA whether this marks the end of social trading at OANDA in general or whether OANDA will seek a third party solution. The number of competing social trading networks out there in the market place at the current time makes it very difficult for a new social trading network to reach the critical mass needed to really take off. 

Today FxPro has made a move to consolidate their Forex business by shutting down their Australian office. The office only opened a year ago and half ago but FxPro have made the decision to shut down operations those attempting to open new accounts at FxPro.com.au are greeted with the following message: 

It was only a few years ago when the Gaming industry was making some of the big sports sponsorship deals. It now seems that Sport Sponsorship has garnered significant attention from a number of FX and OTC financial instrument providers. Earlier this month Alpari announced a multi year multi million pound deal to become the Shirt sponsor of Premier League team West Ham United. Alpari have always been a big fan of Sport sponsorship having also sponsored the New York Nets and Knicks.  

Alpari aren’t alone in targeting big name sports sponsorship’s; FSA regulated brokerage FX Pro has been the proud Sponsor of Fulham FC since 2011. FX Pro’s deal with Fulham runs out at the end of the 2012/13 Season. However that particular deal is only one part of FXPro’s Sports Sponsorship package with FXPro also being the main sponsor of the Asian Champions League as well as being the naming rights partner of the Australian Super League Rugby. In addition to these current sponsorship agreements FXPro previously had various sponsorship agreements with a number of different bodies and organisations in the world of Motor Sport. 

Sports sponsorship seems to make a lot of sense for FX companies, just as it does to those in the gaming industry. Sport Sponsorship reaches a predominately male audience (Forex products are predominately used by Males). Plus there seems to be a sense in which Sports fans are both competitive and less risk averse than many of their peers. A number of different sports have been the primary targets for those wanting to advertise Foreign exchange products and each for distinct reasons. 

• Football: Premier League football in particular has been a target for the FX Industry. Not only do such advertisements reach a large audience in Europe, they also gain great exposure in Asia which is a rapidly expanding market for those offering Foreign Exchange services. 
• Motor Sports: Motor Sports and Formula 1 in particular have been targeted as well. Motor Sport has a global fan base as well as attracting a clientele with above average disposable income.  
• Sailing: Some Forex companies have very cleverly chosen to provide sponsorship for Sailing teams and events. Those who follow Sailing again tend to have more disposable income as well as a greater interest financial products.