The Australian Securities and Investments Commission (ASIC) has cancelled the Australian financial services licence (AFSL) of an foreign exchange provider after an investigation found it failed with its obligations, including making false and misleading statements.
ASIC cancelled the AFSL of Rainbow Legend Group Pty Ltd on 30 April after the regulator found the foreign exchange provider had falsely promoted an insurance compensation scheme for clients of up to $2.5 million across a number of websites
The regulator stated the insurance scheme does not exist in Australia and would not apply to clients based in Australia or to services covered under Rainbow Legend’s licence.
ASIC also claimed Rainbow Legend had not complied with a number of its reporting obligations and had failed to lodge financial statements for the years ended 30 June 2013 and 30 June 2014, and an auditor’s report for two financial years.
Rainbow Legend had promoted itself as a global foreign exchange and contracts for difference brokerage company that specialised in derivative trading with the cancellation of its licence part of an ongoing review of the foreign exchange sector by ASIC.
To date ASIC has cancelled three licences, suspended one licence, restrained two people and one business from offering financial services and directed three other groups to change the way in which they offer financial services.
ASIC also issued specific warnings about two groups not licensed to offer services in Australia alongside a general warning about groups operating in the foreign exchange sector.
