in Standard-Head.php
A US-based online brokerage has stopped providing new margin loans to its Australian clients after ASIC raised concerns that its licence authorisation did not allow it to provide margin lending facilities.
Interactive Brokers LLC (IB) has advised its clients of this decision and made them aware of their potential rights. Individual clients may wish to seek legal advice on their personal circumstances.
IB's existing Australian financial services licence authorises it to deal in securities, derivatives and foreign exchange contracts. It has since applied to ASIC to vary its licence to deal in margin lending facilities.
ASIC's inquiries into IB are continuing. ASIC has no further comment at this time.
BackgroundA margin loan lets people borrow money to invest and uses their shares or managed funds as security.
The regulation of margin lending started on 1 January 2010. Issuers of, and advisers on, margin lending facilities need a licence to offer such services.