Australian regulator cancels license of AGM Markets

Maria Nikolova

AGM’s financial services operations are found to have followed a business model that disregarded key conduct requirements.

The Australian Securities and Investments Commission (ASIC) today announces that it has cancelled the Australian financial services (AFS) licence of the retail OTC derivative issuer AGM Markets.

The cancellation follows an ASIC investigation which demonstrated that AGM’s financial services operations involved core elements of unconscionability and unmanaged conflicts of interest and followed a business model that disregarded key conduct requirements.

Specifically, the AFS licence was cancelled after ASIC found AGM:

  • provided financial product advice about securities and superannuation interests when it did not hold a licence to do so;
  • engaged in conduct by making representations to clients that were misleading or deceptive or was likely to mislead or deceive;
  • did not have available adequate human resources to carry out supervisory arrangements and demonstrated a poor attitude and commitment to its, and its representatives, compliance with financial services laws;
  • engaged in conduct that was unconscionable;
  • did not have in place adequate arrangements for the management of conflicts of interests;
  • did not do all things necessary to ensure that the financial services covered by the licence were provided efficiently and fairly;
  • does not understand the scope of s911A; and
  • has not acknowledged critical non-compliance.

In order to minimise the impact of the cancellation on past and current clients of AGM, the cancellation will be subject to a specification that the AGM licence continues until December 31, 2018 for the purpose of AGM maintaining for that period its membership of an external dispute resolution scheme and adequate professional indemnity insurance cover.

AGM has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.

Let’s recall that ASIC has also launched civil proceedings against AGM Markets. The matter is listed for hearing on June 24, 2019.

In February this year, the Australian regulator obtained interim orders in the Federal Court of Australia against AGM Markets, OT Markets and Ozifin. Back then, the regulator warned the public not to deal with any of the above-mentioned entities in relation to trading in margin FX contracts for difference (CFDs) and bitcoin CFDs. ASIC said it was concerned that these entities are offering personal advice to retail investors which are not authorised by AGM Markets’ Australian financial services licence (AFSL), and that these entities are otherwise engaging in conduct that is misleading or deceptive, and/or unconscionable.

Read this next

Digital Assets

Binance upgrades Bahrain license to offer full-suite of crypto services

The Central Bank of Bahrain (CBB) has granted Binance its Category 4 license as a fully-fledged crypto-asset service provider (CASP).

Digital Assets

BitMEX spot exchange hits $24 million in daily volume

The newly-launched spot market of crypto exchange BitMEX reported a record of $24 million in 24-hour trade activity on May 25.

Retail FX

Financial Commission certifies offering of trade copier 4X Solutions

The Financial Commission, an independent self-regulatory compliance specialist for the financial services industry, has certified the trading technology offered by trade copier 4X Solutions.

Industry News, Inside View

LIVE from Devexperts webinar for brokers on Fractional Trading

Finance Feeds is providing live coverage of the event that aims to help brokers discover fractional shares as a key tool for a successful brokerage business in today’s trading industry.

Industry News, Retail FX

ASIC celebrates retail ban on binary options as 68% of wholesale clients lose money

In the 13 months before the ban, between 74% and 77% of active retail clients lost money trading binary options. The product intervention order does not apply to wholesale clients.

Crypto Insider

Investing in crypto: how to stay away from weak players

The main reason behind the hacks of crypto exchanges is weak key management. For example, all 4 hacks that took place in 2021 were caused by the ability of hackers to obtain access to hot wallets. 

Retail FX

Vantage launches swap-free gold XAUUSD trades for all clients until end of July

“As the greenback continues to strengthen, we want to support traders who remain bullish on gold or seek short term trading opportunities amid the volatility”

Industry News

Broadridge launches ESG reporting solution ahead of European regulation SFDR

The Broadridge managed solution for EET adds to existing Broadridge services, including European PRIIPs Template, European MiFID Template, Solvency II Tripartite Template and many more across the European jurisdictions.

Industry News

iCapital to acquire embedded structured investment platform SIMON

SIMON’s platform, SPECTRUM, is a multi-dimensional allocation analysis and portfolio construction tool designed to evaluate how structured investments and/or annuities may fit into a portfolio. 

<