Natalia Zakharova is the Head of Sales at FXOpen and believes in equal trading opportunities for all market participants. She has spent the majority of her career in the FX industry and is known for her strategic business development, marketing and sales expertise. We spoke to Natalia about the new contacts for difference (CFD) restrictions that came into force this week in Australia, as well implications for trader activity, regulatory reporting and the state of cryptocurrency trading among customers in the APAC region.
Q: Hi Natalia, thanks for joining us. Much has been said and anticipated by the industry about the forthcoming contracts for difference (CFD) restrictions for ASIC licensed brokers – when the possibility first came about of such restrictions, we saw some brokers develop a strategy to move some of their customers offshore, particularly those from APAC countries. How has FXOPEN changed its strategy for the Australia-regulated entity in this respect?
A: Our strategy for our ASIC-regulated entity didn’t change at all. As a group of brokers operating under FXOpen brand, we aim to offer a wide range of products and cater to very different clients. This particular restriction was expected and we are pleased to say that there are FXOpen brokers which are not affected by this change – so we didn’t need to change our strategy.
Q: Following CFD restrictions in the United Kingdom we saw that any short-term impacts on trading volumes and trading interest from clients were later offset by healthy revenue and boosts to other key financial metrics for the UK-regulated CFD brokers as the months and years went on. Can we expect the same scenario for Australian brokers or does this phenomenon really depend on what each individual company is doing to alleviate any negative impacts of CFD restrictions?
A: We definitely expect the same scenario as we already had this experience with our FCA-regulated entity where volumes picked up in about a year’s time. In fact, we expect the negative impact to be more muted this time as most clients are better prepared for the change this time, it is no longer regarded as a negative thing for trading as it used to, and finally because this is the only leverage you can get across regulated CFD jurisdictions favoured by brokers and their clients in 2021. We are also looking to introduce additional features such as a new platform, extra analytics and integration with Trading View.
Q: FXOPEN, along with another ASIC regulated broker, recently announced the launch of professional trading accounts. Besides possibly allowing such customers to continue trading with the same leverage on CFD products as before, what other advantages do such accounts offer to traders? And do you foresee increased competition among AU brokers in regards to such “professional traders” given the possible incentives or advantages to experienced traders that such types of accounts provide?
While we offer no incentives for applying for professional status to our clients, such traders are indeed a lucrative client base for most brokers, especially for ECN brokers like FXOpen. We will be launching a new platform TickTrader very shortly. It is aimed at professional traders and has a range of sophisticated features required for advanced trading and offers a great alternative to MT4. We also continue to segregate professional client funds although it is not required by ASIC. This is a common strategy that we follow across our regulated entities to add extra security for the clients.
Q: We have received word that RTS 27 reports have indeed been cancelled by the regulatory authorities in Europe for a period of 2 years. However, RTS 28 reports will still have to be filed. How likely do you think it is that Australia’s Securities and Investment Commission (ASIC) will follow suit? If such changes do occur, with they have a meaningful impact on the reduction of resources allocated to regulatory reporting and upkeep, so to say, for FXOPEN?
A: We do not think that ASIC might follow suit in the next couple of months, however, should they decide to, it will not be a problem for us as we already do this for our regulated entities.
Q: Attempts to regulate digital currency trading products, namely crypto CFDs, have gained traction recently, with the United Kingdom unexpectedly instituting an all-out ban on such products for the time being. What are your expectations for such trading products’ regulation in Australia, given your experience in that jurisdiction, and if restrictions or a ban do come into play, how will FXOPEN handle such “roadblocks”?
A: Speaking from experience I would say that ASIC usually wait and assess European and US practices before adopting them in Australia. Since United Kingdom is the only major jurisdiction to prohibit crypto CFDs for retail traders, we do not expect them to be banned in the foreseeable future. However, everything related to cryptos can change very quickly, so should it happen, it will not come as a surprise.