July 2010 – ASIC issue Regulatory Guide 212 urging clear segregation of client funds and better investor education and disclosure as to the risks of investing with providers who do not voluntarily segregate client funds.
2H 2011 – The collapse of MF Global illustrates the problem of Australia’s inadequate client protection laws with hundreds of investors left exposed to potential losses. CFD Forum members and media highlight the dangers to everyday investors and the need for legislative reform.
November 2011 (Then) Financial Services Minster Bill Shorten announces a that Treasury will conduct a consultation process on Handling and use of client money in relation to over-the-counter derivatives noting that “the recent collapse of MF Global throws these issues into sharp relief”.
2012 Treasury receives 105 submissions in response to this discussion paper, including the MF Global Client Support Group who strongly recommend improving Australian regulations and ensuring client funds are segregated, while noting that” the problems … arise from one error in regulatory law, that is, that the broker firm is currently able to use client monies to margin or deal in the firm’s own positions”.
February 2012 The Australian CFD Forum established (extended to the CFD and FX Forum in 2014) as an industry initiative to encourage better overall standards of client protection and service.
December 2012 A comprehensive ASIC report highlights weaknesses in client money handling practices at some firms, and warns retail investors.
2013 The CFD Forum provide Treasury with a report on developing a better client protection environment, including recommending a legislative reform package
October 2013: An Australian regulated FX broker, GTL Tradeup, goes into liquidation, imperilling investors funds.
May 2014 The ACCC authorise the CFD Forum’s voluntary best practice standards noting “The standards are likely to result in enhanced consumer protection for those people who choose to invest in CFDs”
January 2015 The sudden devaluation of the Swiss currency causes major strains and losses for many retail investors around the world, and causes significant stress to UK and US firms, vividly illustrating the risks that investors face in a similar situation in Australia.
May 2015 to today: Stockbroker BBY goes into administration and early reports indicate $16 million of client funds missing and the probability of client funds being used for other purposes.
August 2015: ASIC publicly calls for changes to the Corporations Act to better protect client money.