The Australian market has been an interesting one. On the one hand, it is one of the most robust financial asset trading markets around the world; on the other, more and more regulation is being added to the trading and competitive markets as time passes. The updates to the industry regulations are frequent. Today, the regulatory landscape is very different from what it used to be. Exploring this landscape takes a lot of time and effort, which is why guides through the market, reviewing the regulations and limitations that the industries will be encountering in AU are important. Today, we are going to be discussing several industries in terms of Australian regulation. While we are at it, we are going to attempt how this regulation has shaped the market and what the changes that are intended might be bringing to the industry in the future.
The source of Australian regulation in terms of the financial industry is the Australian Securities and Investment Commission. The regulatory body is authorized to license or refuse to license financial companies from across the entirety of the AU. In order to qualify for the license, these companies would have to be able to satisfy several baseline demands from the regulatory body. Specifically, they will have to have installed a certain range of customer and client protection, guaranteed safety of safety and fairness of trading, and comply with a large range of other, related and important regulation. ASIC is the body in charge of the retail trade across all of Austalia and thus is the body we will be looking at in order to identify the baselines regulation, as related to the retail markets and beyond.
While the regulations are many, there are some key requirements that a broker needs to fulfill in order to be provided with a license. The first of these requirements, out of the long list of Australian regulation, is the need to have operating capital of at least one million USD. This requirement is in place as a way to ensure that all of the financial transactions the broker will be dealing with during retail trade can be covered without issue. Although, one million is the bare minimum and only the smallest brokers will be able to operate effectively at this level.
Taking the regulation one step further, it is required of all broker to be working with tier-1 banks. This means guaranteeing that the funds that the users deposit into their account are kept separately from the broker accounts and the broker has no access to them. This way, ASIC ensures that there is no way users will lose their funds to malicious activity by a broker, or simply protecting the funds from business use by the broker. Finally, in order to protect the customers, ASIC also has investor compensation schemes installed into their license requirements, which guarantee that the users will be able to get their funds back, in the case of the broker becoming insolvent at some point during their operation.
The Australian Interactive Gambling Act
Australian regulation does not only concern financial markets. There are regulations related to other competitive markets as well, with the iGaming sector being one of the industries that are greatly affected by the introduced regulations and limiting it in the way it can exist. The Australian Interactive Gambling act is the all-encompassing and comprehensive piece of legislation that covers the iGaming sector. The act was designed in the early 2000s and has been in effect ever since, working in order to protect the consumers from dangerous entities and to protect the interests of the online gaming websites and venues.
There are several layers to how the act operates and several ways in which it protects the entirety of the industry from itself. The most important and one that should be noted first is that the act prohibits local gambling venues from providing Australian clients with their services. Only companies that are located outside of Australia are permitted to provide the iGaming services to Australian citizens. This is why you will be able to access PlayAmo online casino with ease, but will not be able to access any Australian casino. In a way, this restriction exists in order to prevent any kind of Australian firm from dominating the market with ease and to make it a little hard for Australians to get access to websites such as these.
Although, the Australian regulatory initiative on the iGaming market does not end there. It also requires those casinos that do end up providing their services within Australia to comply with certain requirements. Specifically, certain user protection requirements that are not much different from the requirements imposed on brokers. Keeping user accounts separate from the online casino account to prevent the casino from using the user funds for business processes. They also incentivize the creation of programs that would allow users to retain their funds in case the casino is not solvent, so on and so on. With such a large chunk of the Australian population enjoying gambling as their pass time, it is not surprising that the government is interested in keeping them protected from blunders and mistakes that might arise in such situations, which is why Australian regulation is so strict in imposing its rules upon casinos.
Additionally, there are provisions within the act that prohibit certain types of wagering services in and out of Australia. These services are listed simply but are important to be aware of, in order to avoid any kind of scams that might be offering them in Australia. Gambling services that are prohibited from being provided in AU are those which are offered in the course of conducting business, such as using gambling for marketing purposes and the like. Additionally, services that would be provided to clients using internet carriage services, broadcasting services, datacasting services or other possible content services are all prohibited. This prevents gambling from entering every facet of the Australian lives and protects them from gambling addiction or manipulation of their desire to gambling in order to gain something from them.
How does ACMA enforce the IGA?
Something that the ACMA does in order to enforce and deter bad faith actions from iGaming services provides is get in touch with foreign licensing bodies in order to report any kind of misconduct. This ensures that the online gambling venue that was reported will have problems in any of the jurisdictions it operates, not just Australia. If a company is found to have been acting in bad faith, the names and information of the directors and company officials will also be reported to border officials and they will be barred from entering the country in the future.
ACMA is also going to issue formal warnings, infringement notices, apply to Federal and Civil courts for breaking the law and get in touch with the Australian Federal police in order to start investigations. If a company violates the laws, they are likely going to be not only barred from operation in Australia but further prosecuted, if possible. Fines, prison times and other dangers will be faced by those who fail to comply with the laws and regulations imposed by the ACMA through the IGA.
Although getting a license to operate in Australia is not necessarily a complicated process, it is a required one for all online gambling venues. Certain capital requirements are also imposed upon companies, as well as other baseline rules beyond the ones described above, which need to be complied with in order for the company to legally and safely operate within the borders of Australia. Some changes are also expected to come to the legislation in the near future, as online interactive gaming is becoming more and more prevalent throughout the country. What shape these changes will be taken is not specifically known, but they are expected to be introduced within the next two years.