The Australian Securities and Investments Commission (ASIC) has cancelled the Australian financial services (AFS) licence CFD and Forex broker FXOpen AU Pty Ltd.

The regulatory decision was made after an investigation into the broker identified serious concerns about the inadequacy of its human resources to provide financial services and to carry out supervisory arrangements.

ASIC’s investigation also found that FXOpen AU failed to comply with its obligations as an AFS licensee, including:

• maintaining competence to provide financial services covered by the licence
• complying with the ‘key person’ condition on its licence, and
• complying with financial services laws.
• FXOpen AU has held AFS licence 412871 since 12 December 2011, allowing it to issue CFDs.

ASIC found FXOpen AU’s failure to comply with its core obligations as an AFS licensee warranted the cancellation to protect existing and future clients from likely future breaches of its core obligations.

By cancelling the licence, ASIC also aims to deter other AFS licensees from failing to comply with their obligations, promote the objects of fairness, honesty and professionalism by those who provide financial services and support confident and informed participation of investors and consumers in the financial system.

ASIC has pursued enforcement actions against retail OTC derivatives issuers addressing misconduct in the sector, including obtaining a $75 million penalty against AGM Markets and its authorised representatives OT Markets and Ozifin, along with compensation for approximately 10,000 former clients.

The regulator also commenced proceedings against eToro in its first design and distribution action to protect consumers from high-risk CFD products.

ASIC has also cancelled the AFS licence of Xtrade.AU after it failed to comply with its general obligations as an AFS licensee and the banning of its former directors and responsible managers.