Exclusive: USGFX applying for Cyprus CySEC license
FNG Exclusive… The ever moving saga of Retail FX and CFDs broker USGFX continues.
Following the bankruptcy filing of its main operating subsidiary in Australia, Union Standard International Group Pty Ltd, the USGFX group is moving to shift the nexus of its operations to Europe.
USGFX already has made a large investment into Europe, but most of that to date has gone into the UK.
The group set up a UK subsidiary in 2017 and went through the FCA license approval process, receiving its FCA license in November 2018. USGFX-UK had planned to begin taking on clients in late 2019 / early 2020, but that coincided with the time the parent company in Australia fell into issues with regulator ASIC, which the company eventually blamed for the bankruptcy of the flagship Australia operation.
Looking ahead to the UK launch, and in part to help brand the firm around the world, USGFX signed a three-year deal to be the front-of-shirt sponsor of Premier League team Sheffield United in June 2019. Details of that deal weren’t fully disclosed, but Sheffield United did state at the time that it was the largest-ever commercial transaction in the club’s history – meaning millions of dollars a year. Sheffield United currently sits in eighth place in UK Premier League standings.
However USGFX hadn’t yet beefed up the people part of its UK operation. The company just has one active UK director (beyond controlling shareholder Hein Min Soe), Simon Quirke, whose focus is on compliance. Until now things had really been run by longtime USGFX Group CEO Shay Zakhaim from Australia. But Mr. Zakhaim left the company concurrent with the Australia company’s bankruptcy filing, as was exclusively reported at the time by FNG.
So now, we understand that USGFX is active on two fronts. One, it is looking for a new Group CEO to replace Mr. Zakhaim, although it is likely that individual will be in the UK, which will become the new active headquarters of USGFX globally. And second, given the end of EU-UK passporting which will come into effect at the end of 2020, like many UK-licensed Forex brokers USGFX is also in the process of setting up a Cyprus-based subsidiary and applying for a CySEC license. The license application is reported to be in its “final stages”, although apparently it has been delayed due to Covid-19 related administrative issues in Cyprus.
It will be interesting to see if indeed the Cypriot authorities will grant a new license to an ownership group which just oversaw the bankruptcy of its flagship operation, and was clearly having issues with ASIC. CySEC has been posturing lately as a get-tough regulator, coming down on a number of its own regulated companies which seem to be getting in trouble with other European regulators.
The Cyprus operation, if approved, will be used to service EU clients. The group also has an offshore Vanuatu operation, from where it can service clients outside of Australia, Europe, and North America.
As noted the USGFX group is controlled by Myanmar entrepreneur Hein Min Soe. The ultimate parent company of the group, Union Standard Group International Holdings Limited, is based offshore in Samoa.