Two Offshore Brokerage Companies Stop Providing Unlicensed FX ServicesBy Lex Yaranu | Friday, August 28th, 2015
Last week, we write about the ongoing collaboration between the Australian Securities and Investment Commission and Japan’s Financial Service Authority (JFSA) to stop brokers not licensed to provide binary options within each countries to stop soliciting clients across their borders.
Now it appears that ASIC is taking the campaign to other jurisdictions.
Two companies, FIBO Group Limited (FIBO) and Trading Point of Financial Instruments Limited (XM.com or Trading Point), have stopped providing financial services to Australian citizens and residents effective from Thursday 27th August 2015. Both companies are located in British Virgin Island and Cyprus respectively. The two brokers have operated with lots of Australian clients but by ASIC guidelines and standards, are not properly licensed to do brokerage business in Australia.
Both entities have Australian clients but neither entity is appropriately licensed to provide financial services in Australia.
It is lso believed that the two brokerages may have misled investors by presenting adverts which contained the names of two Australian group entities with similar names.
Speaking on the developments, ASIC Commissioner Cathie Armour said, ‘ASIC has received a number of complaints from investors who have mistakenly believed they are being provided services by an Australian financial services licensee when in reality the agreements are with a different company.
‘Often these investors have signed up via a website run by a group of entities that heavily promotes one company within the group as having an AFS licence and being regulated in Australia. What makes it even more disappointing in these cases is the Australian entities’ services were being advertised when they were not even in a position to commence their businesses and with many of the usual regulatory protections not being in place.
‘Investors need to be diligent when entering into any contracts that relate to the provision of financial services. They need to make sure they know who they are dealing with and be aware of the country or regulatory regime in which the entity operates.’
ASIC has advised consumers to search ASIC’s Professional registers for licensed Australian brokers. .
Australian investment laws allow Australian clients to rescind any agreements signed with unlicensed companies and to be able to seek via legal action, recovery of brokerage fees and commissions paid to such entities.Published in News & Analysis