Sources: Australia’s ASIC blocks FXPrimus IPO

Australian business news source The Australian Financial Review (AFR) has indicated that the top governmental financial watchdog Australian Securities & Investments Commission (ASIC) has blocked the potential public float of retail forex broker FXPrimus.

The retail based forex broker, popular in the Asia-Pacific region and licensed in Mauritius, recently obtained CIF status from CySEC in Cyprus, a favorite EU base for companies in the industry.

Concerns about not having enough ties to Australia was apparently one issue raised by regulators. Although, the holding company FX Primus Group Limited keeps an office in Melbourne as stated on its website.

The AFR article from by Sarah Thompson and Jonathan Shapiro states that FX Primus Group initially submitted a 135-page initial public offering prospectus to raise equity with the Australian Securities and Investment Commission on April 16th, but the regulator has, as of right now, refused to allow the float to go ahead, according to a ASIC spokesperson.

“ASIC had a number of concerns and an interim stop order was placed on the FX Primus Group Limited’s prospectus on April 30, 2015,” said the ASIC spokesperson in response to questions about the status of the raising from AFR.

“ASIC also notes the extensive regulatory and enforcement work conducted in the FX space and our concerns in relation to companies listing in Australia and conducting business in emerging markets,” the spokesperson said.

Wilson HTM Investment Group introduced a number of investors to FXPrimus in November 2014, testing the appetite for a $200+ million initial public offering. It is understood FXPrimus told investors back in November it has an Adelaide-registered office which makes it eligible for an Australian Securities Exchange (ASX) listing.

ASIC has not issued a new license to a Forex broker in more than two years. It is understood that senior officials within ASIC would like to see regulation mimic that of the retail FX industry regulation of the USA’s NFA when it comes to retail FX brokers as some have been unhappy with the high leverage allowed, especially after the January 15th Swiss franc spike. Ultimately the decision regarding FXPrimus comes down to the fact that ASIC has become more demanding of new brokers.

“We’re doing what we can in terms of vetting those who apply for licences in this area, particularly those that don’t have a [true] connection with Australia that are operating outside of Australia,” Greg Medcraft, Chairman, ASIC said in March. We will continue to monitor this story, and provide any updates as they come along concerning FXPrimus and of course more from ASIC concerning Australia’s FX industry.

To read the full article from the Australian Financial Review regarding this story, .

Read Also: