media release (16-067MR)

FXAsia updates website disclosure to clarify the services it may offer

Published

Following concerns raised by ASIC, OTC derivative issuer FXAsia Pty Ltd (AFSL No. 418036) (FXAsia) has taken steps to update disclosure on its website (https://www.fxasia.com/).

 The updates will inform  potential clients that FXAsia cannot currently issue OTC derivatives to retail investors. Despite holding retail license authorisations, FXAsia is not currently in a position to issue these products as it does not currently meet some of the relevant financial resource requirements.

To assist in clarifying the types of services they provide, FXAsia has also removed a Product Disclosure Statement and Financial Services Guide from their website and improved disclosure clearly stating that their services are for wholesale investors only.

ASIC was concerned that retail investors may mistakenly believe that as a consequence of FXAsia having an Australian Financial Services (AFS) licence authorisation allowing it to provide services to retail investors, FXAsia was in a position to issue OTC retail derivatives and comply with the relevant financial resource requirements. 

Licensees which provide those types of services must comply with ASIC Class Order 12/752 Financial requirements for retail OTC derivative issuers, which requires a licensee to hold a minimum of $1 million Net Tangible Assets (NTA) or 10% of the average revenue of the licensee, whichever amount is greater. However, the ASIC Class Order requiring this NTA only applies to licensees that have an actual or contingent liability to retail investors. At the time of ASIC's discussions with FXAsia, they had decided to focus their services on wholesale investors only and were not in a position to meet the minimum NTA requirement.

ASIC Commissioner Cathie Armour said, 'Licensees need to ensure compliance with all their obligations including those licence authorisations which carry with them additional protections for retail investors. If a licensee is not in a position to provide those protections, they should not offer those financial services and make that clear to investors.'

Background

This outcome continues ASIC’s focus on financial services compliance in the retail OTC derivative sector, including margin FX, CFDs and binary options.

Recent outcomes include:

  • Warning about false claims on www.usgforex.com (refer: 15-408MR).
  • IronFX Global Australia Pty Ltd removing references from an associated website and a disclosure document about regulation by ASIC and counterparty arrangements (refer: 15-395MR)
  • Boca Global Financial Group removing potentially misleading website representations (refer: 15-340MR)
  • Formax removing false statements about the suspension of its subsidiary's licence following ASIC concerns (refer: 15-336MR).
  • Following ASIC's concerns Ingot Brokers (Australia) Pty Ltd rectifying its 'cash and cash equivalents' arrangements to comply with its financial resource requirements (refer: 15-333MR).
  • O.C.M. Online Capital Markets Pty Ltd paying $30,600 in penalties after ASIC issued three infringement notices for false or misleading online advertising (refer: 15-321MR).
  • cancelling the Australian financial service licence (AFSL) of LSG Group Pty Ltd (refer: 15-293MR).
  • British Virgin Island company FIBO Group Limited and Cyprus company, Trading Point of Financial Instruments Limited (also known by the trading name XM.com), agreeing to cease providing unlicensed financial services to Australians (refer: 15-233MR).
  • suspending the AFS licence of Australian Capital Advisory Services Pty Ltd on the grounds it had ceased providing financial services after a change of control (refer: 15-217MR).
  • following an investigation, Advanced Markets agreeing to change potential misleading statements on its website (refer: 15-085MR).
  • following an investigation, suspending the AFS licence of FX provider AGM Markets Pty Ltd (AGM) (refer: 15-075MR).
  • warning investors not to deal with Grandegoldens, which was not licensed to trade in margin FX in Australia (refer: 15-066MR).
  • cancelling Enfinium’s AFSL because, among other things, concerns around inadequate risk management systems (refer: 15-026MR).
  • following a surveillance, Calibre Investment changing the way it offers FX services to retail clients (refer: 14-327MR).
  • restraining Monarch FX and its former director and general manager, Quinten Hunter, from carrying on a financial services business (refer: 14-342MR).
  • shutting down Vault Market and removing its sole director, Mr MD Anamul Amin, from the financial services industry (refer: 14-309MR).
  • warning investors not to deal with YoutradeFX which was not licensed to trade in margin FX in Australia (refer: 14-306MR).
  • Pepperstone agreeing to stop providing financial services in Japan following inquiries by ASIC that revealed they were not licensed by the Japanese Financial Services Agency (refer: 14-267MR).
  • cancelling the AFSL of online FX broker Global Derivative Services after an investigation found it failed to comply with a number of its licence obligations (refer: 14-226MR).
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