ASIC gets tough on unregulated FX business: Takes a stand by shutting firm down

Australia’s position as a highly regarded region for good business ethics is increasingly being made clear by the highly effective policy of its national financial regulatory authority, the Australian Securities and Investments Commission (ASIC).

Today, ASIC has sent a clear message to those who seek to conduct unregulated FX business within its jurisdiction by commencing action in the New South Wales Supreme Court to stop Vault Market Pty Ltd and its sole director, Mr MD Anamul Amin, of Wiley Park, New South Wales from carrying on a financial services business without an Australian financial services (AFS) license and to close down a website with the domain name ‘’ (KiwiFx Bank).

Having taken a close look at the company’s website, ASIC noted that the company’s advertising promises its customers “quick executions, low spreads, and intelligent customer-service”.

ASIC received complaints that users of the company’s FX trading service had not received profits which they generated from trading with KiwiFX Bank, therefore alerting the authorities to the possibility of the firm operating as a bucket shop, with no accountability as clients would have no recourse if the company is not regulated by ASIC.

On this basis, ASIC took swift action, and with the consent of the parties, the court yesterday made interim orders restraining Mr Amin and Vault Market from carrying on a financial services business without holding an AFS license, or holding out that they hold an AFS license, and to use their best endeavors to remove all content on the website and publish a notice for clients and potential clients.

This notice states that Vault Market Pty Ltd is not licensed with ASIC and does not hold an AFS license and KiwiFX Bank is not a Foreign Bank.

The matter will return to the NSW Supreme Court on Monday 25 August 2014 and in the interim, the court imposed travel restrictions on Mr Amin, and ASIC has embarked on a continued investigation into the activities of this business.

Over the past two years, ASIC has seen an increase in the number of entities applying for an AFS license authorizing the entity to operate a retail FX trading business. ASIC has, and is continuing to conduct a surveillance of this industry and currently has several investigations into FX trading businesses on foot. ASIC is one of the very few regulatory authorities worldwide which has the ability to carry out such operations, due to its investment in a sophisticated real-time surveillance system provided by British financial software company First Derivatives, along with its own SMARTS system. This particular automated surveillance system collects real-time information concerning the behavior of the companies it overseas, thus ensuring that any irregularity will be detected immediately. Many western firms have successfully established operations in Australia, as it provides a superb business environment, partly due to ASIC’s solid reputation, and is a veritable springboard to the much coveted Asia Pacific Region.

Due to this expansion of interest from FX firms to operate in Australia, ASIC has ensured that the good reputation should remain. An example of this is ASIC’s refusal to grant an AFS license to a company which sought to deal in retail FX contracts and derivatives because ASIC was concerned that the applicant had provided ASIC with false or misleading information and did not have adequate risk management, compliance and supervision arrangements in place.

Prevention, in this case, is better than cure.


Read Also: