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Wednesday 11 May 2016

16-134MR Ikon rectifies client trust accounts and improves disclosure

Following concerns raised by ASIC, retail over-the-counter (OTC) derivative issuer Ikon (Australia) Pty Ltd (AFSL No. 416279) (Ikon) has agreed to separate client money held in compliance with its obligations under the Corporations Act, from money held for overseas investors, which is not associated with financial services provided under its AFS licence.

Ikon's current business arrangements and structure are such that any financial service provided by Ikon to overseas clients is provided from offshore. Consequently these services would not be considered to be provided within Australia, and are therefore not financial services provided under its AFS licence.

Ikon has confirmed that only 0.03% of their active clients are made up of Australian investors. A licensee's client trust account that is used in connection with the provision of its financial services can only hold client money in connection with financial services covered by the AFS licence. Accordingly, Ikon is taking steps to obtain the consent from each Australian client to transfer their money into a separate segregated client trust account. These measures are aimed to ensure there is no mingling of client money with any other monies that have no connection to the financial services covered by the AFS licence.

Ikon has also made changes to its website as a result of ASIC's enquiries and agreed to directly inform their overseas clients that the services they provided outside this jurisdiction are not covered by Australian regulations.

Background

This outcome continues ASIC’s focus on financial services compliance in the retail OTC derivative sector, including margin FX, CFDs and binary options.

Recent outcomes include:

  • Boca Global Financial Group removing potentially misleading website representations (refer: 15-340MR)
  • Formax removing false statements about the suspension of its subsidiary's licence following ASIC concerns (refer: 15-336MR)
  • Following ASIC's concerns Ingot Brokers (Australia) Pty Ltd rectifying its 'cash and cash equivalents' arrangements to comply with its financial resource requirements (refer: 15-333MR)
  • O.C.M. Online Capital Markets Pty Ltd paying $30,600 in penalties after ASIC issued three infringement notices for false or misleading online advertising (refer: 15-321MR)
  • cancelling the Australian financial service licence (AFSL) of LSG Group Pty Ltd (refer: 15-293MR)
  • British Virgin Island company FIBO Group Limited and Cyprus company, Trading Point of Financial Instruments Limited (also known by the trading name XM.com), agreeing to cease providing unlicensed financial services to Australians (refer: 15-233MR)
  • suspending the AFS licence of Australian Capital Advisory Services Pty Ltd on the grounds it had ceased providing financial services after a change of control (refer: 15-217MR)
  • following an investigation, Advanced Markets agreeing to change potential misleading statements on its website (refer: 15-085MR)
  • following an investigation, suspending the AFS licence of FX provider AGM Markets Pty Ltd (AGM) (refer: 15-075MR)
  • warning investors not to deal with Grandegoldens, which was not licensed to trade in margin FX in Australia (refer: 15-066MR)
  • cancelling Enfinium’s AFSL because, among other things, concerns around inadequate risk management systems (refer: 15-026MR)
  • following a surveillance, Calibre Investment changing the way it offers FX services to retail clients (refer: 14-327MR)
  • restraining Monarch FX and its former director and general manager, Quinten Hunter, from carrying on a financial services business (refer: 14-342MR)
  • shutting down Vault Market and removing its sole director, Mr MD Anamul Amin, from the financial services industry (refer: 14-309MR)
  • warning investors not to deal with YoutradeFX which was not licensed to trade in margin FX in Australia (refer: 14-306MR)
  • Pepperstone agreeing to stop providing financial services in Japan following inquiries by ASIC that revealed they were not licensed by the Japanese Financial Services Agency (refer: 14-276MR); and
  • cancelling the AFSL of online FX broker Global Derivative Services after an investigation found it failed to comply with a number of its licence obligations (refer: 14-226MR).

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Last updated: 18/05/2016 12:22