NZ regulator suspends derivatives issuer license of EncoreFX
EncoreFX has been put into voluntary administration by its Canadian parent.
New Zealand’s Financial Markets Authority (FMA) today announces that it has suspended the derivatives issuer licence of EncoreFX (NZ) Limited.
This happens shortly after the business was put into voluntary administration by its Canadian parent. Rees Logan, Adam Nikitins and Stewart McCallum of EY were appointed as administrators on March 30, 2020.
While the licence is suspended, EncoreFX will still be permitted to close out any open positions it has with existing retail clients. The administrators have been providing the FMA with regular updates regarding the administration.
The regulator explains that, in order to provide derivatives products to retail investors, a business must have a derivatives issuer licence from the FMA. The licence suspension can be lifted if the administrators find a new owner for EncoreFX that is able to satisfy the FMA that EncoreFX can meet the requirements for licenced derivative issuers.
The FMA understands that EncoreFX’s customer base is largely wholesale.
New Zealand’s regulator issued EncoreFX a derivative issuer licence in August 2016, and the suspension took effect at 5pm on April 24, 2020.