ASIC cancels margin foreign exchange licence
The Australian Securities and Investments Commission (ASIC) has cancelled the licence of a margin foreign exchange business for making frequent changes to one of its user platforms, but failing to document them.
"Virtual Dealer" owner Enfinium was found to have failed in its risk management obligations after keeping no record of the 271 changes staff made to the platform.
ASIC's investigation, which looked at a two year period between 2011 and 2013, found several of Enfinium's staff had management authority to make changes, including editing and deleting clients' open positions.
However, the activity was not documented, nor were staff properly trained in their risk management responsibilities, ASIC found.
ASIC Commissioner Greg Tanzer said: ‘Margin foreign exchange businesses that utilise the Meta Trader trading platform and use the Virtual Dealer plug in, need to ensure they have robust risk management systems".
"These systems must ensure the client is not disadvantaged to the benefit of the broker. Any tool that has the potential to advantage a broker needs to be carefully managed.'
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