ASIC suspends OTC derivative AFSL
An over the counter (OTC) derivative provider's Australian Financial Services Licence (AFSL) has been suspended by the Australian Securities and Investments Commission (ASIC).
Australian Capital Markets Advisory Services (ACMAS) was unable to demonstrate it was fully compliant with many of the AFSL requirements after the entity became a wholly owned subsidiary of Formax International Market.
ACMAS intends to set up and recommence its business in a few months and ASIC has suspended its licence until 30 October.
However, if the firm cannot demonstrate prior to that date it can meet all the AFSL obligations, consideration will be given to cancelling the licence entirely.
Commenting on the suspension, ASIC Commissioner, Cathie Armour said "We have seen an increase in retail OTC derivative providers purchasing companies that already hold a licence but that have ceased providing financial services. The new management are often not in a position to recommence providing services that are compliant with Australian obligations for an extended period of time."
"‘More generally we would have concerns if new entrants to this market were trying to inappropriately bypass ASIC's stringent AFS Licence application processes."
Recommended for you
Financial Services Minister Stephen Jones has shared further details on the second tranche of the Delivering Better Financial Outcomes reforms including modernising best interests duty and reforming Statements of Advice.
The Federal Court has found a company director guilty of operating unregistered managed investment schemes and carrying on a financial services business without holding an AFSL.
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
Compliance professionals working in financial services are facing burnout risk as higher workloads, coupled with the ever-changing regulation, place notable strain on staff.
