The continuously expanding financial market trading requires higher level of cooperation among financial market authorities worldwide. Since the beginning of this year, there has been a few talks about the possibility of cross-border cooperations between several authorities. The fruit of those talks have just come to light now.

The continuously expanding financial market trading requires higher level of cooperation among financial market authorities worldwide. Since the beginning of this year, there has been a few talks about the possibility of cross-border cooperations between several authorities. The fruit of those talks have just come to light now. US CFTC and Australia have agreed on cross-border cooperation. This could either alleviate or add problems for online forex brokers and traders.

US-Australia

US CFTC's Australia And Canada MoU

On June 5, 2014, US Commodity Futures Trading Commission (CFTC) announced that they have signed an MoU with the Reserve Bank of Australia (RBA) and Australian Securities and Investments Commission (ASIC). The Memorandum of Agreement conveyed the aforementioned agencies commitment to cooperation and the exchange of information in the supervision and oversight of clearing organizations that operate on a cross-border basis in the United States and in Australia.
 
This is not the first cross-border agreement that the US CFTC have entered. Leaprate reported on March 27, 2014, that CFTC have entered into an MoU with five Canadian provincial regulators for similar reason. The cooperation was geared toward establishing a framework for cooperation and the exchange of information in the supervision and oversight of regulated entities that operate on a cross-border basis in the United States and in Alberta, British Columbia, Ontario, or Québec. Considering that there is already Canadian-based forex brokers that have been licensed to operate in the US, most notably OANDA, then this could be a step to the right direction.

 

Hope In The Unknown

What will these cross-border cooperation entails? We all know just how serious the US is in establishing the rule that no brokers could operate there without US license. Is the agreement only a way for financial authorities to pursue cross-border rule offenders? Is it simply an agreement of mutual supervision? Or is there some unified licence supervision and procedure on sight? We are not yet sure. This could either alleviate or add problems for online forex brokers and traders. However, we do think that such action should benefit traders in due time as these are the people for whom financial regulation must work for.

The way things are now, each country has their own regulation and hold their own licence right. On the other hand, online forex trading, for example, could be done by someone in Asia through US-based forex brokers. In that case, how do the broker's financial responsibility toward their client could be guaranteed? Furthermore, it must be a challenge for the brokers to fulfill license requirement from every single country. If similar MoU is being signed between more financial authorities, then hopefully the solution to the dilemma could be found in near future.