New Zealand’s Financial Markets Authority (FMA) announced that it had suspended the derivatives issuer license of AxiCorp. The financial watchdog made the announcement this Thursday, citing “material breaches” of the Financial Markets Conduct Act 2013 as the reason for the suspension of the license.
The regulatory body cited three main breaches which were committed by AxiCorp. These three breaches, according to the FMA, are not having a compliant Product Disclosure Statement or Disclose Register entry, not lodging audited financial statements and not having a qualified auditor for its processes, procedures and controls within four months of its balance date. Another additional charge is that AxiCorp did not duly notify the FMA of its appointment of a Chief Financial Officer which is a breach of its license conditions.
The statement from New Zealand’s watchdog stated that the FMA considers that AxiCorp has shown that it does not have adequate systems, processes or resources in place to ensure compliance with the Financial Markets Conduct Act or to effectively perform services under a license.
AxiCorp’s response to the suspension of its license
According to AxiCorp, they discovered the problem with their Product Disclosure Statement for New Zealand clients and they self reported the issue to the FMA. The firm says that as soon as they identified that the statement was not fully compliant, they stopped accepting any new retail clients or new positions from New Zealand. Clients who were affected by this were immediately informed.
The company expressed disappointment over the decision to formally suspend its license despite the firm itself having made efforts to inform the regulator of the challenges and working towards rectifying them. AxiCorp says that they respect the decision and they are working closely with the regulatory body to ensure that the suspension is lifted.
Until all matters mentioned by the FMA as the reasons for the suspension are resolved, AxiCorp will remain suspended in New Zealand. The suspension is effective beginning the 29th of July 2019 and during the course of the suspension, AxiCorp can continue to conduct business as a derivatives issuer. However, this continuation will only apply to derivatives with existing clients, allowing the firm to close out any open positions it has with these clients.
AxiCorp has reassured its clients that the suspension put into effect by New Zealand’s FMA will have minimal effect on business. The brokerage says that their clients will still have access to their funds as normal and they can still manage their current positions.
According to the brokerage firm, they remain committed to the New Zealand market. They also clarified that the suspension does not have a significant effect on the firm’s financial performance and that this does not currently contribute significantly to their global revenue.
The statement from AxiCorp continues to say that they are currently seeing double digit growth inactive clients, trading volume, revenue and EBITDA from their global business. This growth is a reflection of the quality and transparency of service provided to AxiCorp clients. AxiCorp Financial Services Pty Limited is an online margin foreign exchange which has its headquarters in Sydney, Australia.