Axi gets license conditions imposed by ASIC
After we reported exclusively last week that Australian financial regulator ASIC was finally dropping its year-long attempt to suspend the AFS license of Retail FX and CFDs broker AxiCorp, ASIC has now announced that it is now imposing additional license conditions on the retail OTC derivatives issuer.
AxiCorp Financial Services Pty Ltd operates the Axi.com brand, which recently rebranded from AxiTrader.
ASIC said that it has now imposed additional conditions on the Australian financial services (AFS) license of Axi to ensure that the company has adequate compliance arrangements in place for its over the counter (OTC) derivatives business.
Under the additional AFS license conditions:
- AxiCorp must appoint an independent expert to conduct a review and assess whether it has adequate procedures and internal controls in place to ensure compliance with its regulatory obligations;
- the independent expert is required to identify remedial actions from the review and AxiCorp must provide a plan to ASIC setting out the remedial actions it proposes to implement;
- AxiCorp must maintain a minimum of three equivalent full-time compliance staff until 31 December 2022; and
- AxiCorp must not appoint any Corporate Authorised Representatives until 31 December 2022.
AxiCorp is also required to provide ASIC with an attestation from a senior executive within the company. The senior executive must confirm they are satisfied that AxiCorp has undertaken all necessary remedial actions and that it has in place adequate compliance measures to ensure that it and its representatives comply with financial services laws.
If the executive attestation is not provided by the time required, AxiCorp is required to take all necessary steps to cease on-boarding new customers and not charge customers commission or other fees for financial services provided by AxiCorp in Australia for as long as the attestation remains outstanding.
On January 2, 2020, ASIC suspended AxiCorp’s AFS licence for four months after finding that AxiCorp failed to comply with certain financial services laws – namely the requirements to pay client money into an account with an Australian authorised deposit-taking institution, comply with client money reporting rules, lodge product disclosure statement in-use notices with ASIC, comply with the ASIC derivative transaction rules, and lodge financial statements with ASIC by the due date.
On the same day, AxiCorp applied to the Administrative Appeals Tribunal for a review and stay of ASIC’s suspension decision. The Tribunal granted a stay of the suspension, meaning that AxiCorp could continue providing financial services under their AFS license pending final review of ASIC’s decision.
Following the imposition of the additional license conditions, ASIC and AxiCorp filed proposed consent orders with the Tribunal, setting aside the decision to suspend AxiCorp’s AFS license. On March 9, 2021 the Tribunal granted the orders and set aside the suspension decision.