Following the voluntary administration of Union Standard International Group, which operated under the brand USGFX, the Australian Securities and Investments Commission (ASIC) announced this Tuesday that is has suspended the company’s Australian Financial Services (AFS) license.
According to the Australian regulator, the AFSL of USGFX has been suspended under section 915B of the Corporations Act 2001 (Cth) (Corporations Act) because the company is now under external administration.
USGFX enters into voluntary administration
Earlier this month, Finance Magnates broke the news that USGFX has entered into voluntary administration, with Andrew Cummins and Peter Krejci of BRI Ferrier (NSW) Pty Ltd appointed as administrators on the 8th of July 2020.
USGFX is an Australian-headquartered foreign exchange and CFD broker. In the statement from the company earlier this month, the broker said it had gone into voluntary administration to facilitate its restructuring so that it can continue to provide financial services to its clients.
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In its statement seen by Finance Magnates, the FX and CFD broker highlighted that it was largely forced into voluntary administration because of ASIC, which has taken the company to court a number of times since December of last year, despite having “no substantial allegations” USGFX said.
“Although ASIC has suspended the licence, it has used its power under s915H of the Corporations Act to allow the administrators to conduct certain necessary activities under the licence during the suspension period, including to have in place a dispute resolution scheme and arrangements for compensating retail clients, to hold professional indemnity insurance, and to allow the termination of existing arrangements with current clients of Union Standard,” ASIC said in its statement today.
Finance Magnates reached out to USGFX for a comment on the suspension, but the broker declined. The company can apply to the Administrative Appeals Tribunal (AAT) to have the decision from the authority reviewed.
Since the broker went into voluntary administration, the company’s CEO, Shay Zakhaim, left his position at the company, according to an update on his Linkedin profile. This occurred just one week after it went into administration.