Retail broker FXOpen has lost its license in Australia. The firm had regulatory approval to operate in Australia since 2011.
In a statement issued on Wednesday morning, the Australian Securities and Investments Commission (ASIC) said it had revoked the license of the broker, which has its headquarters in Cyprus.
The regulator gave several reasons as to why it had made the decision to revoke the license. From reading the statement, these seem to mainly revolve around the firm’s employees and their ability to actually operate a CFD brokerage business.
Data on LinkedIn suggests the firm has only one employee in the country, although it’s always plausible there are more. So this is likely to be a case of the firm simply not having the personnel in place to actually manage the business to the regulator’s liking.
In its statement, ASIC also said that FXOpen’s Australian entity had failed to comply with financial services laws and been unable to demonstrate “competence to provide financial services covered by the licence”.
Interestingly, the regulator also said that FXOpen had failed to comply “with the ‘key person’ condition on its licence”.
The ‘key person’ condition is applied only to certain license holders by ASIC. This tends to be when the regulator believes the firm’s ability to function compliantly is determined by a small number of employees.
It could be the case that FXOpen simply doesn’t have the people necessary to manage the firm and this is what ASIC is referring to.
However, FXOpen’s owner is currently facing money laundering charges in the US that could see him spend up to 25 years in prison. This may have influenced ASIC’s decision.
