The refunds are part of an enforceable undertaking (EU) with ASIC.
An investigation by the regulator found Interactive Brokers did not hold an Australian financial services licence which authorised the provision of margin loans between July 2010 and August 2013.
During the period, approximately 3,000 retail customers took out a margin loan with Interactive Brokers.
Under the terms of the EU, Interactive Brokers admitted it had contravened the Corporations Act 2001 by not holding an authorisation under its licence to provide margin loans.
Along with the $1.5 million in refunds to retail investors, Interactive Brokers has also agreed to pay $100,000 to the Financial Rights Legal Centre for the “purposes of consumer education concerning financial services and consumer rights in Australia”.
Interactive Brokers has engaged PricewaterhouseCoopers to ensure that the customer refunds are calculated and paid in accordance with the terms agreed to in the EU.
ASIC commissioner Greg Tanzer said margin loans come with “unique risks and will not be suitable for all consumers”.
“It is therefore important that they be provided by appropriately licensed or authorised companies,” Mr Tanzer said.
“Providers must also comply with their responsible lending obligations when issuing margin loans,” he said.
