The Australian Securities and Investments Commission (ASIC) has revoked the Australian financial services (AFS) licence of CFD and Forex broker FXOpen AU Pty Ltd.
This decision followed an ASIC investigation that raised significant concerns about the broker’s inadequate human resources for providing financial services and managing supervisory arrangements.
The investigation revealed that FXOpen AU failed to meet several key obligations as an AFS licensee, including:
- Maintaining the necessary competence to provide financial services under the licence.
- Adhering to the ‘key person’ condition attached to its licence.
- Complying with financial services laws.
FXOpen AU had held AFS licence 412871 since December 12, 2011, which permitted the issuance of CFDs.
ASIC determined that FXOpen AU’s failure to meet its core obligations justified the licence cancellation to protect both current and future clients from potential breaches. The cancellation also serves as a warning to other AFS licensees to fulfill their obligations, ensuring fairness, honesty, and professionalism in the financial services sector. It supports the confident and informed participation of investors and consumers in the financial system.
ASIC has been active in enforcing actions against retail OTC derivatives issuers, addressing misconduct in the sector. Notable actions include a $75 million penalty against AGM Markets and its authorised representatives OT Markets and Ozifin, along with compensation for approximately 10,000 former clients. Additionally, ASIC has initiated proceedings against eToro in its first design and distribution case to protect consumers from high-risk CFD products.
ASIC has also cancelled the AFS licence of Xtrade.AU due to its failure to comply with general obligations as an AFS licensee, and the former directors and responsible managers of Xtrade.AU have been banned.