An Australian financial services business has agreed to cease providing services in Japan after an inquiry by the Australian Securities and Investments Commission (ASIC) found it was not licenced by the Japanese regulator.
Pepperstone Group Ltd, was licensed by ASIC in February 2013, to carry on a financial services business to make a market, deal in and provide advice on a range of financial products, including derivatives and foreign exchange contracts, in the Australian market.
However, ASIC became aware that Pepperstone was also advertising its products through a Japanese mirror website and that it had a number of clients based in Japan to whom it offers margin foreign exchange services.
In a statement ASIC revealed that, "Pepperstone has recently announced that it will not accept any new Japanese clients, and has emailed all existing Japanese clients to inform them that it does not hold a licence in Japan and to allow them to close their current open positions and withdraw their funds by 31 December 2014".
"ASIC said that interim trading by Japanese clients should wind down their current open positions in an orderly manner."
ASIC Commissioner Cathie Armour said, "ASIC reminds all holders of an AFS licence that they must ensure that, when providing financial services in foreign jurisdictions, they understand and comply with the regulatory requirements of offering a service in that jurisdiction.
"ASIC has been monitoring the retail derivatives and margin foreign exchange industry and is concerned that some Australian AFS licensees may be operating in other jurisdictions without the necessary authority or regulatory approval to provide financial services in those jurisdictions.
"ASIC will continue its focus on entities that are licensed in Australia but appear to conduct most of their business offshore. As part of ASIC's ongoing work, we will liaise with international regulators."
