ASIC concerns prompt FX trader to adjust website statements
A foreign exchange business has agreed to clarify statements on its website relating to its Australian Financial Services Licence (AFSL), after the Australian Securities and Investments Commission (ASIC) flagged concerns.
The regulatory reported that statements on Advanced Markets Ltd's website could have been misunderstood, as they implied ASIC regulated all financial services provided by the company, including those not carried on in Australia.
"The Advanced Markets website contained many statements emphasising the requirements and protections of its AFS licence, including:
- The heading "Advantages of working with an ASIC registered company," followed by claims about ASIC regulation and protection.
- Paragraphs on handling of client money, including the statement "Client funds are held in accordance with ASIC requirements."
- The requirement for all applicants to state that they qualify as a wholesale client under the Corporations Act, under its Account Application webpage," ASIC reported.
"These statements were not accompanied by an appropriate clarification that these AFS licence requirements and protections do not apply to financial services provided outside Australia.
"ASIC was concerned that such statements may confuse potential foreign clients to believe that the remit of ASIC's regulation of the financial services business carried on by Advanced Markets under its AFS licence extends to financial services conducted by Advanced Markets that have no link to Australia.
"The AFS licensing regime only covers financial services carried on in Australia. Where an entity such as Advanced Markets, is based overseas and is providing financial services to clients outside Australia, these services are not being carried on in Australia."
ASIC Commissioner, Cathie Armour, said any content or material published by a foreign company mentioning that it holds an AFSL needed to be clear about the reach of the licence.
"Any limitations of the licence that are not obvious to investors should be clearly disclosed to avoid confusion or misunderstanding.," she said.
AUTHOR
Nicholas O'Donoghue
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