CLSA Premium suspends operations of NZ subsidiary
Hong Kong-focused Forex broker CLSA Premium Ltd (HKG:6877), formerly known as KVB Kunlun, has provided an update on its business in New Zealand.
The Board of Directors of CLSA Premium has decided to suspend the operation of CLSAP NZ and change it to a dormant company until further notice.
The broker notes the disengagement of the company’s PRC domestic clients and the imposition of additional license conditions and the litigation against CLSAP NZ.
The additional licence conditions imposed by the Financial Markets Authority of New Zealand (FMA), due to the failure of CLSAP NZ to meet certain audit and assurance obligations, have been effective since 22 September 2020 and prevent CLSAP NZ from making an offer to, or receiving further funds from, retail investors in relation to derivatives, except in certain limited circumstances. As a result, the additional licence conditions prohibited CLSAP NZ from generating revenue from its operation.
Since the imposition of the additional licence conditions, the Company’s management has used its best effort to remediate the failure and to fulfill the audit and assurance requirements as set out by the FMA. On 20 September 2021, the representatives of CLSAP NZ and its legal adviser met with the representatives of the FMA and have negotiated with the FMA in uplifting the additional licence conditions imposed by the FMA. Despite such meeting, it remains uncertain as to whether or not, and by when, the additional licence conditions can be removed.
Having considered such uncertainty, the operating and financial challenges faced by CLSAP NZ in particular, the Board of CLSA Premium has decided to suspend the operations of its New Zealand business.