Banks warned over booming margin calls
10/08/2011
A big increase in margin calls due to the plunging share market has prompted the Australian Securities and Investments Commission to tell lenders to make sure they told clients of margin calls “as soon as practicable”.
Financial institutions made thousands of margin calls on clients whose portfolios were suddenly out of the money this week.
Under new rules in the Corporations Act, a margin loan must be assessed as “unsuitable” if the client could not meet a margin call or “could only comply with substantial hardship”.
The new law took effect from January 1.
Source: The Age
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