Australian regulator ASIC has informed that it has cancelled the Australian financial services (AFS) license of the retail OTC derivative issuer, AGM Markets.
An ASIC investigation found AGM’s financial services business involved core elements of unconscionability and unmanaged conflicts of interest and followed a business model that disregarded key conduct requirements.
Specifically, the AFS licence was cancelled after ASIC found AGM:
- provided financial product advice about securities and superannuation interests when it did not hold a licence to do so;
- engaged in conduct by making representations to clients that were misleading or deceptive or was likely to mislead or deceive;
- did not have available adequate human resources to carry out supervisory arrangements and demonstrated a poor attitude and commitment to its, and its representatives, compliance with financial services laws;
- engaged in conduct that was unconscionable;
- did not have in place adequate arrangements for the management of conflicts of interests;
- did not do all things necessary to ensure that the financial services covered by the licence were provided efficiently and fairly;
- does not understand the scope of s911A; and
- has not acknowledged critical non-compliance.
ASIC has also launched civil proceedings against AGM Markets with the matter listed for hearing on 24 June 2019.
To minimise the impact of the cancellation on past and current clients of AGM, the cancellation will be subject to a specification that the AGM licence continues until 31 December 2018 for the purpose of AGM maintaining for that period its membership of an external dispute resolution scheme and adequate professional indemnity insurance cover.
AGM has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.