Legals
Any money deposited with ECN Trade will be segregated and held in Australia and invested under "Australian Client Money Rules".
Due to AML / CTF laws, ECN Trade cannot accept funds from third parties. All money deposited into your account must come from a bank account in the same name as your ECN trade trading account.
Regulatory Benchmark Disclosure
ASIC announced the introduction of 7 benchmarks to improve the disclosure of information to retail investors to better help them understand and assess over-the-counter CFDs. These 7 disclosure benchmarks form the ASIC Regulatory Guide 227 (RG227). Below is a summary of these 7 benchmarks and how ECN Trade meets them. Further information can also be found in our PDS.
| Benchmark | MeetsRG227 Benchmark | Explanation |
|
1. Client Qualification |
Yes |
On application, ECN trade assesses a potential client’s qualifications and experience to ascertain the suitability of our products. See section 3.1 Applying to Deal with us for more information |
|
2. Opening Collateral |
Yes |
This benchmark requires disclosure of acceptance of initial capital for account opening. ECN Trade only accepts cash or cash ( TT, BPay) or cash equivalents (such as credit cards) as opening collateral when establishing an account limiting initial credit card deposits to $1000 See section 3.2. |
|
3. Counterparty Risk – Hedging |
Yes |
ECN Trade maintains a written policy and actively manages its exposure to market risk from open positions. See section 16.8 Counterparty Risk and the risks section of our website for more information |
|
4. Counterparty Risk – Financial Resources |
Yes |
As part of the AFSL regime ECN Trade maintains and applies policies to ensure that it meets the financial requirements of its AFS licence. We maintain an Adjusted Surplus Funds buffer for such occurrences as required by ASIC. See section 16.8 Counter Party risk. Financial stress tests are done on a adverse movements on instruments to monitor such risks |
|
5. Client Money |
Yes |
In line with current ASIC regulations ECN Trade has a well-defined Client Money policy and holds all client monies on trust with a tier 1 Australian bank on a fully segregated basis. We do not use client money for any purpose, including meeting obligations incurred by us when Hedging with other counterparties or meeting the trading obligations of other clients. See section 17.1/2/3/4 Dealing With Your Money for more information. |
|
6. Suspended or halted underlying assets |
Yes |
There is no trading in positions with ECN Trade when there is a trading halt in an Underlying Reference Instrument. See section 16.4 Derivative Markets and section 20 Discretions for more information |
|
7. Margin Calls |
Yes |
ECN trade has a clear policy in relation to margin calls and our rights to close out positions. See sections 9.17-9-20 Margin Calls for more information |
Hedging Policy
The Hedging Policy of ECN Trade Pty Ltd is to ensure it has a competent Risk Management exposure to client positions by transferring risk through internal and external counterparty hedges. All ECN Trade hedging activity arising from its Margin FX and CFD trades are hedged with Lmax Limted, regulated by the FCA. The ECN Trade’s risk management strategy is based on highly automated flow management which dynamically hedges the majority of customer risk with hedging counterparties that have been assessed as being financially strong and are members of international exchanges.
The degree to which client positions are hedged is controlled and continually monitored via strong governance, oversight and sophisticated controls at all times, within tightly defined risk parameters approved by the Directors at ECN Trade Pty Ltd.
On assessing agreements and entering into relationships with a new hedging counterparty ECN Trade Pty Ltd undertakes a due diligence process in respect of the proposed counterparty. The process takes into consideration many important factors that includes many key findings that relate to the risk of dealing with the counterparty. These include the counterparty’s:
credit rating,
reputation,
market presence,
international exchange memberships,
funding arrangements,
technological situation,
trading platforms,
reporting processes, and
fees and charges.
Please call us directly if you need further information
Risk Disclosure
Due to volatility and uncertainly in financial markets, risk is an inevitable factor accompanying potential returns. Under certain circumstances or due to extraordinary events, investors might not have their principals returned and you could lose all your deposit. You do not own, or have any interest in, the underlying assets. Therefore, we advise you to fully understand the risks involved in financial vehicles before making an investment. If necessary, independent financial or legal advisory is recommended. At ECN Trade, we provide you optimal trading platform and trading advisory in our best efforts and according to laws and regulations related to the foreign exchange market. Trading advisory we provide is our sincere market analysis. We do not, however, in anyway guarantee profits or accuracy of our market analysis. You should make your own decisions on your trades. We do not provide or allow managed discretionary account services on our accounts. You must only trade on your own account and you are warned we have broad powers to enforce our Account Terms and Conditions.