Australia’s financial watchdog, the Australian Securities and Investments Commission (ASIC), said Wednesday that it has cancelled the financial services licence of FXOpen’s local entity FXOpen AU Pty Ltd.
FXOpen Loses Australian Licence Over Compliance Concerns
The cancellation follows an ASIC investigation that uncovered “serious concerns” about FXOpen AU’s ability to properly oversee its financial services and meet its licensing requirements.
ASIC explains that the investigation identified shortcomings in FXOpen AU’s human resources, specifically its lack of qualified personnel to deliver financial services and maintain adequate supervisory arrangements.
In addition, ASIC said FXOpen AU failed to comply with several core obligations, including maintaining competence to offer financial products, adhering to “key person” license conditions, and following financial services laws.
FXOpen AU had held its AFS license since 2011, allowing it to offer CFDs, leveraged investment products that track the value of underlying assets.
ASIC determined that the company’s repeated breaches of its licensing obligations warranted a cancellation to protect both existing and future clients from potential harm.
“ASIC found FXOpen AU’s failure to comply with its core obligations as an AFS licensee warranted the cancellation to protect existing and future clients from likely future breaches of its core obligations,” said ASIC.
The move is also intended to send a message to other financial service providers about the importance of compliance.
The action also aligns with ASIC’s broader efforts to address misconduct within the retail OTC derivatives sector.
The regulator has previously imposed a hefty $75 million penalty on AGM Markets and its affiliates, commenced legal action against eToro for potentially misleading consumers about CFD risks, and the cancellation of the AFS licence of XTrade.AU after it failed to comply with its general obligations.
