Belly-up FX broker Halifax Investment Services finally bites the dust as ASIC cancels its license
There have been no consequences for the owners of the company who spent big, as ASIC finally closes the door on bankrupt FX broker
The final nail has now been put into the coffin of Australian FX brokerage Halifax Investment Services, whose chequered history led it to bankruptcy in 2018.
This week, the Australian Financial Services Commission (ASIC) canceled the AFS license which was held by the company, putting an end to a saga which has gone on for far too long.
The cancellation took effect from 8 January 2021 and the terms of the AFS licence cancellation allow the Halifax AFS licence to continue on a limited basis until 7 January 2022, but only for the purposes of ensuring that clients of Halifax continue to have access to an external dispute resolution scheme, ensuring that Halifax continues to have arrangements for compensating retail clients, including the holding of professional indemnity insurance cover; and providing financial services to retail or wholesale clients of Halifax limited to the termination of existing arrangements with clients.
These conditions have been put in place so that the cancellation does not adversely affect past or current clients.
Flamboyant lifestyles and extravagance were traits exhibited by executives of the firm, with FinanceFeeds having been privy to a lot of information regarding the over indulgent spending that took place during the company’s existence.
Halifax Investment Services, which went bankrupt on November 25, 2018, was a financial services licensee headquartered in Sydney with a partially-owned subsidiary in Auckland, New Zealand.
The suspension follows the appointment of Morgan Kelly, Stewart McCallum and Phil Quinlan, of Ferrier Hodgson, as joint voluntary administrators of Halifax, appointed on 23 November 2018.
Halifax Investment Services, a retail FX brokerage that had a prominence within the Antipodean region entered administration unusually at a time during which the Australian FX industry is experiencing an extended period of boom.
This year, there have been proceedings according to the standard insolvency procedure, and in March 20, 2019 at the second creditors meeting it was resolved to place Halifax into liquidation and the administrators were appointed as liquidators.
On 18 December 2019, ASIC extended the suspension of the Halifax AFS licence until 8 January 2021, and then the joint hearing of the Federal Court of Australia and High Court of New Zealand seeking orders in relation to the distribution of client moneys held by Halifax commenced on 30 November 2020 and concluded on 9 December 2020. Their Honours Justice Venning and Justice Markovic have reserved their decision on the matter.
Under the Corporations Act, ASIC has the power to suspend or cancel an AFS licence without holding a hearing in situations where the AFS licence is held by a body corporate that is placed under external administration, or that is being wound up.