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ASIC issues warning to online brokers
- — 17 August, 2000 15:48
According to the commission, which this week released the results of a survey it conducted of 29 Australian-based online trading websites, two-thirds of sites did not provide adequate information on dispute resolution procedures.
Roughly 20 per cent of all trades in Australia are conducted via the internet, ASIC said.
The director of ASIC's national markets unit, Clair Grose, said that retail traders were too often compelled to lodge complaints with ASIC itself when they found complaints were being handled too slowly, if at all, by their web brokers.
"Execution only" services are not sufficient for a stockbroker to offer via its website, she said.
She said that even online brokers with functioning complaints-handling procedures in place needed to fully disclose those processes on their websites.
ASIC encourages web brokers to include information on their sites pertaining to the dangers of "speculative day trading". Grose cited instances of brokers offering one-day trading loans of up to $25,000, without issuing any warnings.
Grose urged online brokers to clearly identify the parties that represented the ASX and the contact telephone numbers of those parties.
Of the 29 online brokers surveyed, 17 are listed on the Australian Stock Exchange. The other 12 are trading portals independently owned by financial services companies.