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Monday 8 December 2014

14-327MR ASIC surveillance prompts FX provider to enhance compliance procedures

Following an ASIC surveillance, Calibre Investments Pty Ltd will implement changes to the way it offers FX services to retail clients.

The move is part of ASIC’s crackdown on the FX industry which has resulted in a number of outcomes recently.

ASIC’s surveillance of Calibre, which provides managed discretionary account (MDA) services, raised concerns over the business’s compliance and risk frameworks, their advice to clients and their supervision of representatives.

In response, Calibre has appointed an independent consultant to review its MDA policies and procedures. The independent consultant will report back to ASIC.

The group will also provide new statements of advice to all MDA clients and enhance its compliance department.

ASIC Commissioner Cathie Armour said, ‘FX trading is complex and risky, requiring a significant amount of knowledge, research and monitoring.

‘ASIC expects business in this space to have policies, systems and processes in place that protect the interests of their clients.’

ASIC acknowledges Calibre’s cooperation in this matter.

Background

An MDA service allows a broker to enter and exit trades on behalf of a client without seeking the client’s approval.

ASIC has recently taken the following action in relation to retail margin FX licensees:

  • Shutting down Vault Market Pty Ltd and removing its sole director, Mr MD Anamul Amin, from the financial services industry (refer: 14-309MR)
  • Pepperstone has agreed to cease providing financial services in Japan following inquiries by ASIC that revealed they were not licensed by the Japanese Financial Services Agency (refer: 14-267MR)
  • Commencing proceedings in the Federal Court of Australia to stop Monarch FX, and its former director and general manager, Quinten Hunter, from carrying on a financial services business (refer: 14-266MR)
  • Cancelling the Australian financial services (AFS) licence of online FX broker Global Derivative Services Pty Ltd, after an investigation found it failed to comply with a number of its AFS licence obligations (refer: 14-226MR)
  • Accepting an enforceable undertaking from online FX broker Forex Financial Services Pty Ltd prohibiting it from operating managed discretionary accounts (refer: 14-036MR)

ASIC has also issued an alert cautioning Australian investors against dealing with the company or group YoutradeFX for trading in margin FX (refer: 14-036MR) and issued a more general warning to retail investors about the dangers of FX trading (refer: 13-283MR).

Last updated: 30/03/2021 09:35