An over the counter (OTC) derivative provider’s Australian Financial Services Licence (AFSL) has been suspended by the Australian Securities and Investments Commission (ASIC).
Australian Capital Markets Advisory Services (ACMAS) was unable to demonstrate it was fully compliant with many of the AFSL requirements after the entity became a wholly owned subsidiary of Formax International Market.
ACMAS intends to set up and recommence its business in a few months and ASIC has suspended its licence until 30 October.
However, if the firm cannot demonstrate prior to that date it can meet all the AFSL obligations, consideration will be given to cancelling the licence entirely.
Commenting on the suspension, ASIC Commissioner, Cathie Armour said “We have seen an increase in retail OTC derivative providers purchasing companies that already hold a licence but that have ceased providing financial services. The new management are often not in a position to recommence providing services that are compliant with Australian obligations for an extended period of time.”
“‘More generally we would have concerns if new entrants to this market were trying to inappropriately bypass ASIC’s stringent AFS Licence application processes.”
