Australian customers of Interactive Brokers (NASDAQ:IBKR) will be reimbursed with the fees and commissions paid to the brokerage for retail margin loans during the period between July 2010 and August 2013.
The Australian Securities and Investments Commission (ASIC) has issued an announcement outlining that Interactive Brokers is preparing to refund more than 3,000 of its Australian customers with the fees and commissions paid to the broker for retail margin loans.
Interactive Brokers Australia
The company will refund around $1.5 million to its customers, in addition to paying $100,000 to the Financial Rights Legal Centre, a community legal centre specialising in educating the Australian public on financial services matters.
Interactive Brokers has been engaged in a voluntary undertaking with ASIC since August 2013 when it agreed not to issue nor increase any new or existing margin loans. The company has also wound down its facilities and is currently not offering margin lending facilities to ‘natural person’ clients in Australia.
ASIC Regulation of Margin Lending
The regulation of margin lending began on January 1st, 2010, with the introduction of the Corporations Legislation Amendment Act, which required issuers of margin lending to be regulated by ASIC through an Australian financial services licence (AFSL). In addition, under the Australian regulatory environment, every client’s creditworthiness has to match his risk profile.
PricewaterhouseCoopers will be reporting on its verification of the refund process to ASIC and IB.
– Read the full ASIC announcement at: http://asic.gov.au/about-asic/media-centre/find-a-media-release/2014-releases/14-336mr-asic-investigation-leads-to-interactive-brokers-refunding-15-million-to-australian-customers/