ASIC accepts EU from online FX broker
The Australian Securities and Investments Commission (ASIC) has accepted an enforceable undertaking from an online foreign exchange broker after it violated managed discretionary account (MDA) rules.
The corporate regulator's investigation found that between March 2010 and October 2011, Forex Financial Services (Forex FS) offered an individually managed account (IMA), which was an MDA.
Forex FS' Australian financial services (AFS) licence bans it from offering an MDA service to retail clients except through a registered managed investment scheme.
It found the IMAs, which were opened by 34 clients and had funds totalling more than $2.6 million, were not run this way.
"An MDA service allows a broker to enter and exit trades on behalf of a client without seeking the client's approval," ASIC commissioner Greg Tanzer said.
"Consumers can face significant loss if the service is not provided appropriately."
ASIC also found Forex FS made claims on its website that were misleading or deceptive to clients. This included promising target returns of over 30 per cent per annum for certain products based on their past performance, including the IMAs.
Under the enforceable undertaking Forex FS cannot offer MDA services to retail clients for 10 years.
They also have to get an independent compliance expert to assess their products and services, and take appropriate action.
Recommended for you
Sharing his reasoning in joining the FSC board, WT Financial chief executive, Keith Cullen, believes “product and advice cannot be separated” from each other in the current environment.
The Emerge Foundation, a charity run by financial advisers and fund managers, has announced a scholarship program to help veterans transition into tertiary education.
In an open letter, Sequoia chief executive Garry Crole has hit out against shareholders “with a personal axe to grind” as he fights for his job ahead of an EGM.
The JAWG has announced it is in talks with Treasury around five “core principles” to strengthen the education standards for new entrants to the financial advice space.
