eToro sued down under over 'wholly inadequate' customer checks
Australia’s financial regulator has claimed that trading platform eToro’s screening test is “far too broad” and that it was virtually useless in excluding customers for whom its high-risk derivative product wasn’t appropriate. The Australia n Securities and Investments Commission (ASIC) sued eToro Aus Capital Ltd. on Wednesday, claiming that it breached a number of distribution and license obligations relating to its contract for difference (CFD) product. A CFD is a leveraged derivative contract that allows traders to speculate on the value of an underlying asset. These include foreign exchange rates, stock market indices, commodities, or Crypto . In a statement, ASIC said: “ eToro ’s target market for the CFD product was far too broad for such a high-risk and volatile trading product where most clients lose money, and that the screening test was wholly inadequate to assess whether a retail client was likely to be within the target market.” Among ASIC’s issues with eToro’s scr