Following the appointment of liquidators for Union standard International Group Ltd (operating as USGFX in Australia), the Australian Securities and Investments Commission (ASIC) has moved ahead to cancel the broker’s operational license. This decision was taken on Friday after the regulatory body received the liquidation note of the broker.
ASIC cancels license as the firm enters liquidation
Earlier this month, The Federal Court of Australia asked the foreign exchange broker to enter into liquidation.
From the statement on ASIC’s website, the regulatory body canceled the broker’s license on the 14th of September because the firm has entered into liquidation, which is following the provisions of the 2001 Corporations Act under section 915B.
Liquidators to complete important liquidation activities
Although the broker’s license has been canceled, ASIC said it will allow liquidators Peter Krejci and Andrew Cummins of CRI Ferrier Ltd to carry out certain vital activities covered by the broker’s license until December 18, 2020.
Some of the activities stated include making arrangements to compensate retail clients and establishing a dispute resolution scheme. Also, the liquidators can terminate or hold existing professional indemnity insurance with current clients.
ASIC has also given the broker 28 days after the license cancelation to apply for the Administrative Appeals Tribunal (AAT). If an appeal is not made before the expiry date, the Australian financial watchdog will conclude the cancellation documents.
USGFX Problems continue
In July, reports emerged that USGFX had gone into administration, as it claimed that its business reputation had been damaged due to the Australian regulator’s attacks on the company.
In a report, the broker said ASIC brought legal actions against them even when the firm had not done anything wrong. The company continued that ASIC was not able to prove its case against the firm, but the damage had already been done.
After settling its headquarters in Australia, the group decided to move its headquarters to London after the USGFX legal issues. It still has a legal entity under the supervision and regulation of the U.K.’s Financial Conduct Authority (FCA) and hopes to continue its business there.