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I think the corporations act is very clear. The definitions are very broad and deliberately written so. It becomes grey in its interpretation, enabling ASIC to use its discretion.

I've made a complaint to ASIC before regarding an unlicensed software vendor. The software gave buy and sell signals on FX, and was being sold for $3,000. The response I got from asic is below;

Dear Mr Hamilton Thank you for your email.

Share trading software is not classed as a financial product. I have attached some website links which have some more information for you to have a look at. The website addresses are: http://www.fido.gov.au/fido/fido.nsf/byheadline/Software+for+trading+shares,+currency+and+financial+products?openDocument and also http://www.fido.gov.au/fido/fido.nsf/byheadline/The+six+rules+of+day+trading+systems

Due to the unique nature of each enquiry ASIC is not able to provide interpretations or recommendations specific to some enquiries or circumstances. If you require further information please seek independent advice through an ASIC registered agent, your accountant or solicitor.

Yours sincerely

Susan Morgan

Customer Service Consultant, Enquiries

Stakeholder Services

1300 300 630

There you go, software is fine!! Blew me away.... My response was;

Thanks Susan

 

I'm really quite confused as to what constitutes financial product advice. You say that share trading software is not a financial product (and therefore doesn't require the distributor to hold an AFSL), however in my due dillegence I have found reference to a company ASIC prosecuted in 2008 (Oxford Investments Pty Ltd) for providing unlicensed financial product advice via an Excel Spreadsheet. 

If the software (or training / instruction / signals) influences the recepient to trade is that not a statement or opinion or recommendation under the defenition of financial product advice contained in ASIC guidelines? I am looking at another FX signal provider and they do have an AFSL number, and have told me that I should only work with someone who has an AFSL number.

Obviously I put more weight in your comments and if the ASIC rules have changed since you prosecuted Oxford Investments Pty Ltd then it opens the possibility of working with an unlicensed FX educator / signal provider. 

 

I've included the article I found online for your reference. Can you point me to the parts of the ASIC legislation that outlines who does and who doesn't require a license?

Thanks

 

Brett

Now the truth of the matter is I wasn't interested in either service, but I was interested to see them chase up an unlicensed vendor. I received another reply to this email but it was identical to the first one. Disappointing...