A follow-up to LeapRate’s earlier report about Forex broker Excelsior Markets, which in September this year addressed the court seeking it to overturn a decision by the New Zealand Financial Markets Authority (FMA) to deregister the company from the Financial Services Provider Register…
The broker has suffered legal defeat, with media reports today saying that the High Court in Auckland has upheld the deregistration of the Forex firm.
Justice Gerald Nation agreed with the FMA that the company did not operate in New Zealand, and if it kept its registration, that could mislead people into thinking it was regulated by local law.
The judge agreed that “most, if not all” of Excelsior’s financial services were provided outside New Zealand. “Because of this, its financial services activity was not subject to the regulation and laws of New Zealand,” the judgment said. “That made it undesirable for Excelsior to remain registered in New Zealand as a financial services provider.”
The judgement is released as the FMA gets increasingly concerned that some offshore companies may be trying to take advantage of New Zealand’s reputation as a well-regulated jurisdiction.
Excelsior Markets is owned by United Arab Emirates-based Excelsior International, whose sole shareholder is a Pakistani national. The company provides foreign exchange margin trading through a UK-based platform, though most of its business is in Sri Lanka.
In its Enforcement and Investigations Report for fiscal year 2015, the FMA said it ordered the deregistration of 28 firms from the FSPR during the period. One of the 28 deregistered firms – Vivier Markets, successfully appealed FMA’s actions, thereby creating a legal precedent for other companies to follow.
Excelsior Markets was deregistered from the FSPR in May this year.