ASIC secures orders for asset freezing of retail FX brokers Gallop International Group, Gallop Asset Management

Maria Nikolova

The interim injunctions issued by the Federal Court also order the brokers to close their websites offering FX, CFD and metals trading.

The Australian Securities and Investments Commission (ASIC) has just announced that it had managed to secure freezing orders against Gallop International Group Pty Ltd (GIG), Gallop Asset Management Pty Ltd (GAM) and Mr Ming-Chien Wang.

The orders, issued by the Federal Court, stipulate the freeze of the money of the defendants held in their bank accounts and restraining them from carrying on a financial services business in Australia without holding an Australian Financial Services licence.

In addition, brokers are required to deactivate the websites www.gallopfx.com.au and www.gamfx.com, which promote trading in Forex, metals and contracts for difference. At the time of publication of this article, the websites in question were still accessible.

The orders are issued due to ASIC’s concerns that GIG, GAM and Wang are carrying on an unlicensed financial services business. Neither GIG or GAM holds an Australian Financial Services licence, and therefore are not authorised to provide financial services in Australia.

The interim orders will remain in force until further order. The proceedings have been listed for further directions on November 23, 2017.

ASIC continues its investigation into the matter..

Let’s recall that in July this year, a report by the Australian Transaction Reports and Analysis Centre (AUSTRAC), 74% of CFD/FX providers registered with ASIC did not submit an SMR (suspicious matter report) to AUSTRAC in the two-year period covered by the report, that is, until March 31, 2016. AUSTRAC believes that there is considerable scope for entities operating in these markets to improve their AML/CTF systems and controls to be able to identify and submit SMRs.

Moreover, engagement with partner agencies has identified a potential vulnerability around smaller retail CFD/FX providers that are either foreign owned or foreign controlled. Also, a number of foreign-owned or controlled AFSL holders lack an understanding and awareness of their Australian regulatory obligations. The report notes the possibility for these entities to be exploited and used to facilitate money laundering or other illegal activities.

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