ASIC cancels AFS licence of Forex Capital Trading
ASIC’s investigation found Forex CT’s financial services business model disregarded key obligations of an AFS licensee.
The Australian Securities & Investments Commission (ASIC) today announces that it has cancelled the Australian financial services (AFS) licence of retail FX broker Forex Capital Trading Pty Ltd (Forex CT).
ASIC cancelled Forex CT’s licence after its investigation revealed the business model of the broker disregarded key obligations of an AFS licensee and resulted in unconscionable conduct, misleading and deceptive conduct and a failure to manage conflicts of interest. The investigation conducted by the regulator has also revealed that Forex CT lacked sound ethical values and judgement in dealing with clients, failed to ensure its representatives were adequately trained and complied with financial services laws and failed to ensure that financial services covered by its licence were provided efficiently, honestly and fairly.
ASIC’s investigation identified a number of clients incurring large losses from investing in CFDs and FX with Forex CT.
Formally, Forex CT’s AFS licence will continue until July 31. 2020, for the purpose of having a dispute resolution scheme in place to resolve any disputes with the Australian Financial Complaints Authority (AFCA). Forex CT’s license will also continue until the end of July 2020 to facilitate the orderly closure of existing client positions.
The broker is not permitted to open new client positions. Forex clients can contact Forex CT in relation to the closure of current open positions.
Forex CT has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.
Forex Capital Trading Pty Ltd traded under AFS licence 306400. As FinanceFeeds reported back in March 2019, ASIC obtained orders in the Federal Court restraining Forex CT from transferring any property, including client money, overseas. The orders restraining Forex CT from transferring property overseas were subsequently amended requiring Forex CT to seek ASIC approval in writing prior to making any overseas payments and extended by consent until 5pm on July 24, 2020.
