Prompted by the Australian Securities and Investments Commission, retail over-the-counter (OTC) derivative issuer Ikon (Australia) Pty Ltd has agreed to separate client money held in compliance with its obligations under the Corporations Act from money held for overseas investors.

ASIC, revealingly, made the announcement itself, which suggests that Ikon had little choice. ASIC added that the company was separating the monies with the aim of obeying the law. The money held from overseas investors is not associated with financial services provided under the company's Australian Financial Services licence.

At present, any financial service provided by Ikon to overseas clients is provided from offshore. The regulator believes that someone - it does not say who but implies that a court might be involved - would not consider Ikon's services "to be provided within Australia." Not pausing to explain the peculiar grammar of this expression, it goes on to say that the unnamed onlooker would not think that these services are 'financial services' for the purpose of the firm's AFS licence.

Ikon has apparently told the regulator that only 0.03% of its active clients are made up of Australian investors. The firm has also changed its website as a result of ASIC's enquiries and agreed to tell its overseas clients - by direct communication - that "the services they provided outside this jurisdiction are not covered by Australian regulations."