The Australian Securities & Investments Commission (ASIC) has withdrawn the AFS license of retail Forex Capital Trading Firm (Forex CT).
ASIC stated that it has canceled the license of Forex CT because it found out the company ignored the main obligations of a firm holding an AFS license, resulting in deceptive, misleading, and unconscionable conduct. The commission also accused Forex CT of failing to properly manage conflicts of interest as a result of its negligence.
Several issues identified
Based on the investigation carried out by the commission, the firm did not use good judgment and sound ethical values when dealing with clients.
“ASIC’s investigation also found that Forex CT lacked sound ethical values and judgment in dealing with clients,” the commission said today.
Also, Forex CT did not make sure their representatives were properly trained and adhered to the laws guiding financial services operations in the state. Additionally, Forex CT failed to make sure the financial services covered by its license were offered fairly, honestly, and efficiently.
License is still official until July 31
The investigation carried out by ASIC revealed that several clients incurred heavy financial losses from investing in FX and CFDs with Forex CT.
The AFT license of Forex CT will still be official until July 31. ASIC said it’s to enable a dispute resolution scheme that will take care of any disputes labeled against Forex Ct by the Australian Financial Complaints Authority (AFCA).
The company will assist in the proper termination of any existing client position until the end of July. Afterward, ASIC said the firm is going to cease operations.
Forex FX is now ineligible to open new positions
The broker is not granted authority to open any new client position, and its clients need to contact Forex CT for information about the closure of any current open position. However, Forex CT can appeal against the ban and the review of its licensing decision.
In March last year, ASIC got a restraining order from the Federal court to prevent Forex CT from transferring any form of properly and client money overseas.
However, the order was relaxed and amended, which required Forex CT to gain approval. The amendment of the order stated that Forex CT can request approval in writing before making any foreign payments.
Before its license was canceled, Forex CT provided trading in margin foreign exchange and contracts for difference (CDFs).