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Thursday 28 May 2020

20-121MR ASIC takes action on two AFS licensees

ASIC has adopted a practice of issuing combined media releases about administrative action. There is no relationship between the matters or the subjects in this media release, except that ASIC has taken administrative action.

ASIC cancels AFS licence of Squareknot Pty Ltd

ASIC has cancelled the Australian financial services (AFS) licence of Sydney-based financial services provider Squareknot Pty Ltd (Squareknot).

The licence cancellation took effect on 6 May 2020.

ASIC cancelled Squareknot’s AFS licence after it found that Squareknot did not meet the base level financial requirements of its licence.

Under the Corporations Act, an AFS licensee must comply with the conditions of its licence. ASIC may suspend or cancel an AFS licence if a licensee does not comply with its licence conditions.

Squareknot has the right to appeal to the Administrative Appeals Tribunal (AAT) for a review of ASIC’s decision.

ASIC suspends AFS licence of Forex Plus Australia

ASIC has suspended the AFS licence of NSW-based financial services provider Forex Plus Australia Pty Ltd (Forex Plus) for six months effective from 5 May 2020.

Forex Plus’ licence was suspended after ASIC became aware that Forex Plus had not been providing financial services for some time. Under the Corporations Act, ASIC may suspend or cancel an AFS licence if the licensee has ceased providing financial services.

Forex Plus has also failed to lodge its audited accounts for a number of years. AFS licensees are required by law to lodge their audited accounts annually to demonstrate that they have adequate resources to provide the services covered by their licence and to conduct their business in compliance with law.

ASIC suspended rather than cancelled Forex Plus’ licence because the licensee has indicated that it may recommence providing financial services. Forex Plus will be required to lodge its audited accounts during the suspension period if it intends to recommence providing financial services.

Forex Plus has the right to appeal to the AAT for a review of ASIC’s decision.

Background

The cancellation of Squareknot’s AFS licence and the suspension of Forex Plus’ AFS licence are part of ASIC’s ongoing efforts to improve standards and maintain public confidence in the financial services industry.

Squareknot has held AFS licence no. 454694 since 23 December 2015. It was authorised to provide general advice on, and deal in, securities for wholesale clients.

Forex Plus has held AFS licence no. 259763 since 10 March 2004. It was authorised to provide advice and make a market for foreign exchange contracts for wholesale clients.

Squareknot’s failure to meet base level financial requirements and Forex Plus’ failure to lodge audited accounts for a number of years was identified as part of ASIC’s routine monitoring activities.

ASIC’s website contains useful information for AFS licensees about their obligations, including lodgement requirements and meeting base level financial requirements (see Regulatory Guide 166 Licensing: Financial requirements (RG 166).

Editor's note:

This media release has been updated with an amended reference number.

Last updated: 28/05/2020 01:04