ASIC suspends AFS licence after reported forex company acquisition

The Australian Securities and Investments Commission (ASIC) today has announced they have suspended the Australian financial services (AFS) licence of retail OTC derivative provider Australian Capital Markets Advisory Services Pty Ltd (ACMAS).

The reason?

ACMAS ceased providing financial services after a reported change of all directors and shareholdings in the company in June 2015. During this month the entity became a wholly owned subsidiary of Formax International Market Limited. So it looks as if Formax was attempting to enter the Australian market through buying out ACMAS whose AFS license was active.

Formax has a wide footprint in the retail forex brokerage market with regulation from the UK’s FCA, New Zealand Financial Service Providers Register and Hong Kong Securities and Futures Commission (SFC).

The new management (Formax) of the company (ACMAS) according to ASIC was unable to demonstrate it was fully compliant with many of the AFS licensing requirements. Thus, ASIC has now blocked the deal by suspending this particular license. However, it looks as if this acquisition attempt will get a second chance.


FormaxGroup had already added the newly acquired ACMAS to their company organizational chart. License now suspended per ASIC announcement today.
FormaxGroup had already added the newly acquired ACMAS to their company organizational chart. License now suspended per ASIC announcement today.


More from Australia’s financial watchdog: Australia’s ASIC first half 2015 report: 323 enforcement actions, crackdown on retail forex

ACMAS has stated it intends to set up and recommence its business in a few months. On this basis, ASIC has suspended its licence until October 30th 2015.  If ACMAS is unable to demonstrate prior to that date that it is in a position to recommence its financial services business, including demonstrating its ability to meet the obligations that would apply to it as the holder of an AFS licence, consideration will be given to cancelling the licence entirely.

ASIC Commissioner Cathie Armour said: “We have seen an increase in retail OTC derivative providers purchasing companies that already hold a licence but that have ceased providing financial services. The new management are often not in a position to recommence providing services that are compliant with Australian obligations for an extended period of time.”

She continued, “More generally we would have concerns if new entrants to this market were trying to inappropriately bypass ASIC’s stringent AFS Licence application processes. Regulatory obligations on AFS licensees continue to apply after the change of control. Any entity that is unable to comply with Australian licensing obligations risks having its licence suspended or cancelled.”

To view this announcement from ASIC click here.

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ASIC suspends AFS licence after reported forex company acquisition


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