Australian Regulator ASIC Suspends AFS License of Direct FX


Australian regulator ASIC suspends AFS License of Direct FX. According to the Australian regulator, the brokerage has failed to comply with a section 912C (3) direction. The direction has been issued earlier this February.

27 April, AtoZ Markets The key financial regulator of Australian markets, the Australian Securities and Investment Commission (ASIC) has made an announcement on its website. The watchdog has made the decision to suspend the Australian financial services (AFS) license of Direct FX Trading.

Australian Regulator ASIC Suspends AFS License of Direct FX

According to the regulator, the broker will not be able to carry out any trading activities due to the license suspension for a minimum of ten weeks and up to six months. The period of license suspension will mostly depend on whether the company can demonstrate the necessary compliance with the conditions that are attached to its license by October 2018.

The reasoning behind the Direct FX Trading AFS license suspension has its roots in the ASIC investigation. The regulator has found that Direct FX has failed to comply with the Net Tangible Asset (NTA) requirements. This also includes broker not having sufficient cash and cash equivalents.

According to the Australian regulator, the brokerage has also failed to comply with a section 912C (3) direction. The direction has been issued earlier this February. Specifically, the direction has required the broker to provide ASIC with an audit report that would comprise the information about the company’s compliance with its financial obligations. Reportedly, Direct FX has also failed to replace key persons mentioned on its license.

Core Liquidity Markets will also be affected

Cathie Armour, the ASIC commissioner, has stated that Direct FX has violated important conditions of its license. The conditions aimed to protect investors from the higher operational and credit risks that are posed by the retail OTC derivative sector. Cathie Armour has added:

 “When ASIC was trying to conduct its enquiries, the entity did not cooperate in a timely and efficient fashion that we would expect of licensees, and failed to comply with ASIC directions.”

In addition, ASIC has stated that the suspension would also impact the financial services that are provided by Direct FX’s authorized representative, Core Liquidity Markets.

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