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Screenshot of a breaking news alert e-mail from Q2 2017
Australian Securities & Investments Commission (ASIC) has just tabled its Annual Report for the fiscal year to June 30, 2015, with the document providing further evidence of the rigid approach the Australian regulator has adopted regarding the retail OTC derivatives sector (read, retail Forex).
The watchdog notes that it has increased its focus on ‘rogue’ participants in the retail OTC derivative industry to better protect investors.
The Report says that in 2014–15, ASIC cancelled or suspended four AFS (Australian financial services) licences, and issued five media releases and one formal public warning notice informing consumers of various unlicensed providers.
Overall, ASIC achieved 17 public outcomes, which addressed matters like unlicensed activity, false and misleading statements, and a failure to comply with AFS licensing obligations.
The report provides the following examples:
- In July 2014, ASIC took court action to shut down Vault Market Pty Ltd (Vault Market) for operating an unlicensed online foreign exchange business. In November 2014, Vault Market was found to have been acting unlicensed and engaging in misleading and deceptive conduct. The watchdog also banned Vault Market’s sole director MD Anamul Amin from providing financial services for eight years and managing a corporation for five years.
- In September 2014, ASIC cancelled the AFS licence of online foreign exchange broker Global Derivative Services Pty Ltd after an investigation found it failed to comply with a number of its AFS licence obligations.
- In November 2014, ASIC cancelled the AFS licence of foreign exchange broker Rainbow Legend Group Pty Ltd for failing to comply with its AFS licensing obligations, including making false and misleading statements.
- In February 2015, the regulator issued a warning against dealing with unlicensed binary option provider Opteck.com for marketing binary options to Australian investors, but operating from Belize.
The regulator also acted to prevent regulatory arbitrage. In October 2014, following inquiries by ASIC, AFS licensee Pepperstone Group Ltd agreed to cease providing financial services, including derivatives and foreign exchange contracts, in Japan that were contrary to Japanese regulation.
The strict approach of ASIC towards the retail Forex sector was reiterated in the regulator’s report on license applications for the first half of 2015. In it, ASIC confirmed that it had rejected all three new license applications in the Retail Forex sector which it received during the first six months of the year.
You can download the ASIC 2014-15 annual report by visiting this designated page.