ASIC takes against forex company
The Australian Securities and Investments Commission (ASIC) has secured a restraining order preventing a foreign exchange company and its former director from carrying on a financial services business.
The Federal Court of Australia made interim orders on 10 October 2014, restraining Monarch FX Group Pty Ltd and its former director and general manager, Quinten Hunter, from carrying out financial services until 4pm on 21 November 2014.
ASIC revealed that Monarch FX provided foreign exchange (FX) signals to consumers who purchased memberships with the company.
The signals were automatically executed on members' trading accounts and ASIC flagged its concern that Monarch FX was not licensed or authorised to operate the following services:
- Managed Discretionary Account (MDA) services by automatically executing trades on members' trading accounts without prior reference to those members for each transaction;
- recommending members establish a self-managed superannuation fund (SMSF) to purchase its memberships, and then use money from their SMSF to trade in foreign exchange contracts; and
- arranging for its members to enter into foreign exchange contracts.
"ASIC is concerned about the number of companies operating similar business models to Monarch FX, which use trading software to automatically execute trades in foreign exchange contracts on clients' accounts without instructions for each transaction," the regulator said in a statement.
"Given the dangers and complexity of foreign exchange trading, consumers should understand the risks before investing and, particularly, establishing a SMSF in order to trade in foreign exchange."
The next hearing of the matter will be on 21 November 2014 at 9.30 am.
Monarch FX is an authorised representative of Forex TG Pty Ltd (ACN 113 616 032) (AFSL 290108), and was previously an authorised representative of Avestra Capital Pty Ltd (ACN 114 266 698) (AFSL 292464) and Audrn Capital Pty Ltd (ACN 138 918 288) (AFSL 411323).
AUTHOR
Nicholas O'Donoghue
Recommended for you
As Insignia Financial looks to bolster its two financial advice businesses, Shadforth and Bridges, CEO Scott Hartley describes to Money Management how the firm will achieve these strategic growth plans.
Centrepoint Alliance says it is “just getting started” as it looks to drive growth via expanding all three streams of advisers within the business.
AFCA’s latest statistics have shed light on which of the major licensees recorded the most consumer complaints in the last financial year.
Four months after making its first equity partnership, the Australian Wealth Advisors Group has taken a second stake in a regional Victorian advice and accountancy firm.
