Australian regulator cancels license of AGM Markets
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.
