LeapRate's Daily Forex Industry Newsletter
Join now to receive first access to our EXCLUSIVE reports and updates.
Screenshot of a breaking news alert e-mail from Q2 2017
ASIC has cancelled the Australian Financial Services (AFS) licence of Global Derivative Services Pty Ltd (GDS) after an investigation found it failed to comply with a number of its AFS licence obligations.
According to its website, GDS holds itself out as a leader in the field of forex, binary options and contracts for difference. The company’s only director, Brenton Ganesh Nair, lives in South Africa.
ASIC’s investigation found GDS failed to comply with conditions of its AFS licence concerning the appointment and ongoing competency of the key person responsible for the AFS licence, notification of changes to the responsible person, as well as lodgement of accounts, payment of debts, and adequacy of financial and human resources.
The regulatory authority also asserts that the company had not maintained an Australian resident director and registered office, as well as failing to provide up-to-date details with the Financial Ombudsman Service and on its website.
Commissioner Greg Tanzer said “Licensees must ensure they are up-to-date and actively complying with all current obligations. ASIC will not hesitate to act against licensees who fail in this regard.”.
ASIC’s action in cancelling the AFS licence of GDS continues its focus on retail over-the-counter (OTC) derivative providers, including margin foreign exchange. Over the past two years, ASIC has seen an increase in the number of entities applying for an AFS licence authorising the entity to operate a retail OTC derivative business, particularly in the area of retail margin foreign exchange services.
In this respect, ASIC has followed its directive clearly this year, with today’s announcement of the cancellation of GDS’ license representing the third action taken against a retail FX firm in 2014, the first being the closing down by ASIC of an unlicensed brokerage operating under the name of Vault Maeket Pty, and the acceptance of an enforceable undertaking from Forex Financial Services Pty Ltd for offering individually managed accounts, a product which is prohibited to AFS licensees, as well as a warning to potential investors on the perils of unregulated FX margin trading.
ASIC is continuing to conduct a surveillance of this industry and currently has several investigations into retail OTC derivative businesses on foot, and with regard to this particular case, GDS has the right to lodge an application for review of ASIC’s decision with the Administrative Appeals Tribunal.
For the original announcement, click here.
Latest research from Andrew Saks-McLeod (see all)
- FINRA Fines Goldman Sachs Execution & Clearing, L.P. $1.8 Million for OATS and trade reporting failures - July 27, 2015
- Full details of Malta’s new binary options regulation - July 27, 2015
- CMC Markets takes to the high seas at the Americas Cup – Live coverage from Portsmouth, UK - July 27, 2015
- One Financial Markets expands UAE operations with senior appointments and new offices - July 27, 2015