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Why did ASIC cancel Gallop's AFS license?

Why did ASIC cancel Gallop's AFS license?

What caused ASIC Gallop AFS license cancellation? The Australian financial regulator states that Gallop failed to comply with few requirements.

30 May, AtoZForex The Australian Securities and Investments Commission (ASIC) yesterday has informed the public about the suspension of the Australian financial services license (AFS) license of Gallop International Group Pty Ltd. The brokerage is formerly known as Weather Pro Exchange Pty Ltd (ACN 147 664 551) (Gallop).

ASIC Gallop AFS license cancellation reasons

The Australian regulator has stated that it learned that Gallop has failed to comply with the requirements of its AFS license multiple times. Moreover, the ASIC reported that the brokerage repeatedly has failed to follow the financial services laws of Australia.

The regulator’s findings outline the failings to properly lodge the financial statements, audit and breach reports. Moreover, the ASIC states that Gallop did not follow the regulatory framework on notifications of change in control and the appointment of an auditor. According to the ASIC Commissioner, John Price:

“The opportunity to hold an Australian financial services license requires compliance with some fundamental obligations, including reporting requirements. Where licensees fail to meet those obligations, ASIC will act to remove them from the financial services industry.”

The cancellation of the AFS license of Gallop is effective from 24th May 2017.

The brokerage has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision. See the original ASIC press release here.

Gallop’s scope of activities

The Gallop broker has its registration in Sydney. Reportedly, the brokerage was focusing its effort on the Chinese market, just like many other firms from Australia. Therefore, the Gallop’s website is available in English, traditional Chinese and simplified Chinese versions.

Moreover, Gallop’s trading platform is featuring MetaTrader4 desktop and mobile applications for trading Forex, contracts for difference (CFDs) and precious metals.

Australia new Forex client money protection law

Earlier this late March, Australia financial regulator has amended the rules that govern the Forex brokers. The new law is also known as the Retail Client Money law.

The new law closed the legal loophole where the brokers holding client cash could use that cash for their own purposes. Also, virtually all other properly regulated jurisdictions where Forex brokers operate need brokers to segregate all client funds. The amended law began something of a wrangle between the foreign and domestic Forex brokers serving the country.

Moreover, the leading foreign-based brokers had formed the Australian CFD and FX Forum. Thus, it strongly backed the projected legislation as bringing Australia rules into parallel with international standards.

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Disclaimer: The views and opinions expressed in this article are solely those of the author and do not reflect the official policy or position of AtoZ, nor should they be attributed to AtoZMarkets.