ASIC’s REP 652 Wholesale FX practices in Australia examined how major participants managed conduct risks in Australia’s wholesale foreign-exchange market. Released on 18 December 2019, it covered ASIC’s supervisory work during 2018 and 2019—not a current 2026 review and not a finding that every practice applied to every firm listed.
The report focused on the controls behind wholesale FX trading: mark-ups, “last look” rejections, confidential client orders, surveillance, staff training and personal trading. For personal and business clients, its practical message is straightforward: a competitive quoted rate is only one part of fair FX dealing. Disclosure, record-keeping, supervision and the handling of client information matter too.
What ASIC reviewed
ASIC described REP 652 as a summary of better and poorer practices observed in Australia’s wholesale FX market. Its supervisory work included onsite and thematic reviews, as well as monitoring five banks’ compliance with their FX Court Enforceable Undertakings: ANZ, Commonwealth Bank, Macquarie, NAB and Westpac.
The report’s appendix listed 12 reviewed participants:
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- ANZ Banking Group
- Citigroup
- Commonwealth Bank of Australia
- Deutsche Bank
- Goldman Sachs
- HSBC
- JP Morgan
- Macquarie
- National Australia Bank
- Royal Bank of Canada
- UBS
- Westpac Banking Corporation
That list does not mean every participant was reviewed on every topic. ASIC also said the examples were illustrative, not exhaustive, and were not intended to create new legal rules.
The market was significant even by global standards. Using April 2019 BIS survey data, ASIC cited global FX turnover of about US$6.6 trillion per day. Australia accounted for approximately 1.5% of global FX volume; the Australian dollar represented about 6.8%, and AUD/USD turnover was approximately US$358 billion per day. Those are 2019 figures, not current market-volume estimates.
The seven conduct areas in REP 652
1. Governance and supervision
ASIC found weaknesses where firms had no specific conduct-risk assessment for FX, where compliance and audit had little involvement in designing or testing controls, and where front-office staff effectively monitored themselves. In some cases, responsibilities between the front office, compliance and audit were unclear.
Better arrangements included a formal governance framework for both traditional and electronic FX, clearly allocated accountability, and compliance and audit teams with enough authority to challenge traders and report to senior management. ASIC also emphasised technology governance: electronic-FX systems should be properly deployed, modified and validated rather than treated as an unexamined technical tool.
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2. FX mark-ups
A mark-up is a spread or charge included in the final FX price to compensate a participant for risk, costs and services. ASIC said mark-ups should be fair and transparent.
ASIC reviewed the mark-up practices of 11 participants. It examined client disclosures, internal policies, the way mark-ups were applied, and spot and forward transaction data from samples in May and June 2018. Statistical analysis was used to identify apparently unusual mark-ups.
The poorer practices were opaque or inconsistent pricing, ad hoc manual checks and surveillance systems unable to identify unexplained or inconsistent mark-ups. ASIC’s preferred controls included:
- a written policy explaining when and how mark-ups may be applied;
- clear client disclosure;
- an audit trail for each mark-up;
- automated alerts for prices outside approved parameters;
- documented escalation and remediation; and
- a process for correcting errors and responding to complaints.
REP 652 did not say that all reviewed firms overcharged clients. It also did not set a universal maximum mark-up percentage. A large mark-up is not automatically unlawful simply because it is large; the relevant issues include the service provided, the agreement, disclosure and the firm’s controls.
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3. “Last look”
In an electronic FX transaction, last look is the final opportunity for the price provider to accept or reject a client’s request against the quoted price. Rejection can create an extra cost if the client has to trade again. It can also create a conflict if the provider uses knowledge of the client’s intended trade to its own advantage.
ASIC held more than 30 industry meetings, reviewed disclosures and analysed rejection statistics for calendar year 2018. It reported last-look rejection rates for Australian clients of approximately 1.5%, with high-frequency traders receiving the most rejections. That is a historical observation from ASIC’s review—not a current industry benchmark.
ASIC criticised disclosures that were hard to find or overly legalistic, rejection logic that operated only when it benefited the participant, and delays in telling clients a request had failed.
For firms that use last look, ASIC identified better practices such as:
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- explaining clearly how requests are accepted or rejected;
- using symmetrical, time-based rejection logic rather than rejecting only when the provider is disadvantaged;
- making rejection statistics available to clients; and
- monitoring whether staff misuse client trading intentions.
ASIC did not ban last look. REP 652 described its risks and controls; it was not a prohibition.
4. Confidential client order information
A client’s intention to buy or sell currency can itself move a market or give a trader useful information. ASIC therefore examined trading-floor layouts, voice and electronic quoting, order-book interactions and the information available to FX traders. It also reviewed improvements made by five firms subject to Court Enforceable Undertakings.
Examples of weaker controls included sales and trading staff being close enough to see each other’s screens or overhear calls, and personal mobile phones being allowed on trading floors without suitable surveillance.
Better controls included physical separation, masking client names, restricted system access, regular permission reviews and audit trails showing who accessed an order. ASIC also referred to “dark rooms” for orders feeding into a benchmark fix: isolated areas without outside communication or communication devices.
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5. Surveillance and monitoring
ASIC said an effective surveillance framework must capture orders, trades and communications accurately, identify suspicious activity quickly, and preserve an auditable record of what happened.
Its poorer examples included uncertainty over who owned surveillance, missing or short-lived communications records, excessive false positives, underdeveloped trade-surveillance systems and voice monitoring processes that relied too heavily on manual review. A firm may have a system that can technically replay data but still lack evidence that its alerts detect the right conduct risks.
Better surveillance used behavioural and event-driven indicators, risk-based alerts, electronic and voice communications, random sampling and regularly reviewed algorithms. ASIC specifically mentioned communication lexicons that account for languages, abbreviations and common misspellings. Quality assurance should test whether the surveillance works—not merely whether data can be rerun.
6. Conduct-risk training
ASIC reviewed training documents, examination modules and training logs, comparing them with the FX Global Code and each firm’s code of conduct.
Weaknesses included limited FX-specific content and training that had not been refreshed for long periods. ASIC’s preferred model required training before new staff began relevant work, content tailored to the employee’s role, and practical coverage of confidential information, fair dealing and escalation duties.
Useful training should change when regulations, risk assessments, surveillance results or testing reveal a new issue. ASIC favoured interactive workshops, scenarios, case studies and recent investigations over a generic annual module. Firms should also test whether staff understand the material and escalate poor results.
7. Staff personal trading
Personal trading can create conflicts where employees know about client orders or market-sensitive activity. ASIC reviewed policies, dealing-floor layouts and personal-trading records for FX sales and trading staff covered by its reviews.
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Weak controls included no monitoring of employee trades and vague rules about permitted products, who could trade and how long positions could be held.
Better practices included prohibiting FX trading by FX staff and by other employees who were near the desk or could access live client orders. Middle- and back-office staff with system access could also need restrictions. Other controls included pre-trade approval, post-trade reconciliation, personal compliance attestations, retained records and consequences for breaches.
How REP 652 relates to the FX Global Code
ASIC said its expectations were informed by the FX Global Code. The Code has since been updated: the December 2024 FX Global Code superseded the July 2021 version and updated five of its 55 principles, including guidance on settlement risk, transparency for certain transactions and client-generated data on electronic trading platforms.
The Code is a global good-practice framework. It is not Australian law, an AFS licence or a statutory safe harbour. It does not replace the Corporations Act, ASIC instruments, licence conditions or other legal obligations.
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AFS-licence applications
From 16 June 2025, applications for an Australian financial services licence, licence variations and specified notifications moved to the ASIC Regulatory Portal. The current process allows applicants to distinguish retail and wholesale authorisations, select dealing and arranging authorisations separately, and limit some derivatives and FX permissions to hedging purposes.
Cambridge Mercantile action
On 12 February 2026, ASIC imposed additional conditions on the AFS licence of Cambridge Mercantile (Australia) Pty Ltd, a Corpay subsidiary. ASIC said the firm had misclassified more than 2,800 retail clients dealing in structured FX derivatives as wholesale clients, and raised concerns about systems, records, monitoring, remediation, conflicts, supervision and financial resources.
ASIC said affected clients were denied important statutory consumer protections and that remediation was expected to total millions of dollars. The conditions require a remediation plan and independent-expert reviews.
This is a later enforcement matter involving FX derivatives and the retail/wholesale boundary. It is not a finding that REP 652’s 2019 observations were current enforcement findings against Cambridge.
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Relief for qualifying foreign ADIs
ASIC Corporations (Foreign Licensees and ADIs) Instrument 2026/121, made on 31 March 2026, provides relief for qualifying foreign authorised deposit-taking institutions in specified circumstances. Subject to the instrument’s conditions, a foreign ADI may not need an AFS licence when dealing on its own behalf in derivatives or FX contracts to manage financial risk arising in its ordinary banking business.
The conditions include wholesale-only counterparties, no market-making, dealing only in derivatives or FX contracts, acting on its own behalf and not holding an AFS licence covering that service. The instrument is scheduled to expire on 1 April 2031.
What clients can take from the report
REP 652 is aimed at institutions, but clients can use its themes when comparing an FX provider or asking questions about a transaction:
| Question | Why it matters |
|---|---|
| Is the quoted price all-in, or does it include a separate mark-up? | It helps you compare the real cost rather than just the headline exchange rate. |
| Can an electronic request be rejected after a quote is shown? | You need to understand last-look mechanics, rejection timing and what happens next. |
| Are orders and communications recorded? | Reliable records support complaints, reviews and dispute resolution. |
| How is confidential order information protected? | Access controls and separation reduce conflicts and information leakage. |
| Are you being classified as retail or wholesale? | Classification affects the protections and obligations that may apply. |
Wholesale status does not mean a client has no legal protection, nor does it remove a licensee’s obligations. The Cambridge matter demonstrates why accurate classification and effective compliance systems remain important.
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What is ASIC REP 652?
REP 652 is ASIC’s report on better and poorer practices observed in Australia’s wholesale FX market. It was released on 18 December 2019 and covers ASIC work during 2018 and 2019.
Did ASIC ban last look in FX trading?
No. ASIC did not ban last look. It described risks including rejected trades and misuse of client trading intentions, and identified clearer disclosure, symmetrical rejection logic and monitoring as better practices.
Did REP 652 find that banks were overcharging FX clients?
No universal finding was made. ASIC reviewed mark-up practices and analysed apparently unusual transactions, but it did not say every reviewed firm overcharged clients or establish a universal permitted mark-up.
Is the 1.5% last-look rejection rate still current?
It should not be treated as current. The approximately 1.5% figure was ASIC’s observation for Australian clients in its analysis of calendar year 2018.
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No. It is a global good-practice code and does not itself impose legal or regulatory obligations. It supplements, rather than replaces, Australian law and ASIC requirements.
Why does wholesale classification matter?
Retail and wholesale clients can receive different protections and face different regulatory arrangements. ASIC’s February 2026 action involving Cambridge Mercantile highlighted the consequences of incorrectly classifying retail clients as wholesale.
The Bottom Line
The useful lesson from REP 652 is not a single banned practice or permitted mark-up percentage. It is that wholesale FX firms need controls that make pricing explainable, client information confidential, electronic execution fair, surveillance effective and staff accountable. The report is historical, but those control themes remain relevant when a client compares providers or investigates an FX dispute. Check the date and scope before treating any REP 652 statistic as a current market benchmark.
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