ASIC scrutiny prompts review of FX provider’s compliance procedures

An Australian Securities and Investments Commission (ASIC) investigation will see a managed discretionary account provider change the way it offers foreign exchange services to clients.

In a statement, ASIC revealed surveillance of Calibre Investments Pty Ltd, had flagged concerns over the business's compliance and risk frameworks, its advice to clients and its supervision of representatives.

The regulator said Calibre has appointed an independent consultant to review its managed discretionary account policies and services, and will report back to ASIC.

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The group has also agreed to provide new statements of advice to all managed discretionary account clients and enhance its compliance.

ASIC commissioner, Cathie Armour said, "FX (foreign exchange) trading is complex and risky, requiring a significant amount of knowledge, research and monitoring.

"ASIC expects businesses in this place to have policies, systems and processes in place that protect the interests of their clients."

ASIC has recently taken the following action in relation to retail margin FX licensees:

  • Shutting down Vault Market Pty Ltd and removing its sole director, Mr MD Anamul Amin, from the financial services industry (refer: 14-309MR)
  • Pepperstone has agreed to cease providing financial services in Japan following inquiries by ASIC that revealed they were not licensed by the Japanese Financial Services Agency (refer: 14-267MR)
  • Commencing proceedings in the Federal Court of Australia to stop Monarch FX, and its former director and general manager, Quinten Hunter, from carrying on a financial services business (refer: 14-266MR)
  • Cancelling the Australian financial services (AFS) licence of online FX broker Global Derivative Services Pty Ltd, after an investigation found it failed to comply with a number of its AFS licence obligations (refer: 14-226MR)
  • Accepting an enforceable undertaking from online FX broker Forex Financial Services Pty Ltd prohibiting it from operating managed discretionary accounts (refer: 14-036MR).

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