Key Insights
- ASIC cancels FXOpen AU’s financial services licence due to inadequate resources and compliance failures.
- The regulator aims to protect clients and deter other licensees from similar breaches.
- This action is part of ASIC’s broader crackdown on misconduct in the retail OTC derivatives market.
SYDNEY (MarketsXplora) – Australia’s corporate watchdog has cancelled the financial services licence of CFD and Forex broker FXOpen AU Pty Ltd, citing serious concerns over the company’s operational capacity and regulatory compliance.
The Australian Securities and Investments Commission (ASIC) said on Wednesday that its investigation revealed FXOpen AU lacked adequate human resources to provide financial services and implement proper supervisory arrangements.
The regulator also found that the broker, which has held its Australian Financial Services (AFS) licence since December 2011, failed to meet several key obligations. These included maintaining competence in providing licensed financial services, adhering to the ‘key person’ condition on its licence, and complying with financial services laws.
ASIC’s decision to revoke the licence aims to safeguard existing and potential clients from likely future breaches of core obligations. The move also serves as a deterrent to other AFS licensees and promotes fairness, honesty, and professionalism in the financial services sector.
This action is part of ASIC’s broader crackdown on misconduct in the retail over-the-counter (OTC) derivatives market. The regulator recently secured a $75 million penalty against AGM Markets and its authorised representatives, coupled with compensation for approximately 10,000 former clients.
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In a separate case, ASIC initiated its first design and distribution action against eToro to protect consumers from high-risk CFD products. The regulator also cancelled Xtrade.AU’s AFS licence for similar compliance failures and banned its former directors and responsible managers.