Derivative company caught ‘mingling client money’
An Australian retail derivative issuer, whose clients are mainly from overseas, has been ordered by the Australian Securities and Investments Commissions (ASIC) to improve disclosure and rectify their trust accounts.
ASICs enquiry revealed that, over-the-counter (OTC) derivative issuer, Ikon, was providing financial services to overseas clients, who thought they were getting financial services from offshore.
"Consequently those services would not be considered to be provided within Australia, and therefore were not financial services, provided under its AFS licence", said ASIC in a statement.
ASIC said Ikon had now agreed to improve disclosure and separate client money, from money held for overseas investors.
Ikon told ASIC that only 0.03 per cent of their active clients were Australian investors.
Which was why Ikon was now "taking steps to get consent" from every Australian client, to transfer their money, into a "separate segregated client trust account", according to ASIC.
That would ensure that there was no "mingling of client money with any other monies that have connect to the financial services covered by the AFS license", said ASIC.
As a result of ASIC's enquiries, Ikon made changes to their website and said they would inform their overseas clients, that their services they provided outside this jurisdiction were not covered by Australian regulations.
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