ACCC proposes to authorise best practice standards in the provision of contracts for difference

2 April 2014

The Australian Competition and Consumer Commission has issued a draft determination proposing to grant authorisation to enable current and future members of the Australian CFD Forum to make and give effect to a number of proposed best practice standards in the provision of contracts for difference (CFD).

The ACCC has issued the draft determination for five years.

Broadly, the proposed standards have been developed by the Australian CFD Forum to raise the level of compliance with existing regulatory guidance and in some cases to go above and beyond the regulatory benchmarks.

The proposed standards cover topics such as advertising and promotional material, the protection of client money and credit risk monitoring, minimum capital adequacy requirements and due diligence requirements for dealing with intermediaries.

“The ACCC considers that the proposed arrangements are likely to result in public benefit, including enhanced consumer protection and reduced information costs,” ACCC Deputy Chair Delia Rickard said.

“The ACCC received submissions from some interested parties who were concerned that the proposed Standards would affect CFD issuers differently, depending on the particular business model they applied.”

“However, the ACCC considers that the proposed arrangements are unlikely to result in significant public detriment, particularly as membership of the Australian CFD Forum and hence compliance with the proposed standards is voluntary,” Ms Rickard said.

Authorisation provides statutory protection from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010.

The ACCC’s draft determination is not an endorsement of CFDs as an investment strategy or of a particular model for issuing CFDs. Further, the draft determination should not be seen as advocating any particular regulatory standard to apply to CFDs.

The ACCC will now seek submissions from interested parties in relation to its draft determination, before making a final decision.

Further information on the draft determination is available on the public register.

Release number: 
MR 070/14
ACCC Infocentre: 

Use this form to make a general enquiry.

Media enquiries: 
Media Team - 1300 138 917,