Over-the-counter derivatives issuer, AxiCorp Financial Services Pty Ltd, has applied to the Administrative Appeals Tribunal to review its Australian financial services (AFS) license suspension decision by the Australian Securities and Investments Commission (ASIC).
On the 2nd of January this year, the Australian regulator suspended the AFS license of AxiCorp, after the authority found that the company had failed to comply with financial services laws.
AxiCorp has asked the Tribunal to review the suspension and for a stay of the suspension decision and for confidentiality orders. According to a statement released by ASIC, the Tribunal has granted a stay of the suspension, pending final review.
This means that AxiCorp is allowed to continue its operations until a final decision is made by the Tribunal. However, it has refused the OTC derivative issuer’s request for confidentiality orders.
In Australia, AxiCorp trades under the business names AxiForex, AxiPrime, and AxiTrader. The company operates a business that offers margin foreign exchange (forex) and contracts for differences (CFDs) to retail and wholesale clients.
When ASIC suspended AxiCorp’s license, it did so because the company had failed to comply with financial services laws. In particular, the requirements to:
- pay client money into an account with an Australian authorized deposit-taking institution
- lodge product disclosure statement (PDS) in-use notices with ASIC
- comply with the ASIC derivative transaction rules
- comply with client money reporting rules; and
- lodge financial statements with ASIC by the due date.
- AxiCorp was also found by ASIC to have breached Condition 3 of its license which requires AxiCorp to establish and maintain compliance measures that ensure, as far as is reasonably practicable, that the licensee complies with the provisions of the financial services laws.
According to the statement published today, the Aussie watchdog suspended the firm’s license as part of its ongoing focus on improving the standards in Australia’s retail OTC derivatives sector.
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AxiCorp responds to ASIC’s suspension
In a statement provided to Finance Magnates, AxiCorp said: “Until the process has concluded, our Australian clients are still able to trade as normal and we are still able to service new clients. Clients trading through other AxiCorp entities are unaffected by this decision and can also continue to trade as normal.”
“We strongly believe that the issues raised by ASIC are generally historical, in many cases self-reported and do not deserve a suspension, which is why we’ve appealed the decision.
“AxiCorp has made significant investment in its Australian compliance function and practices to ensure it is appropriate to meet our obligations with reference to the size and complexity of the business.
“In fact, we’ve recently commissioned an independent review by a highly experienced and qualified risk management and regulatory compliance expert in relation to ASIC’s concerns. The report (shared with ASIC) made a number of positive observations about AxiCorp’s compliance operations, highlighted some areas that required further work. AxiCorp has completed all of the work required and has taken steps to address the opportunities for further improvement identified by the expert.
“AxiCorp entities also remain licenced by top tier regulators, including the UK Financial Conduct Authority (FCA) and the Dubai Financial Services Authority (DFSA), and we take our regulatory obligations in all countries extremely seriously.”
New Zealand’s FMA suspends AxiCorp
As Finance Magnates reported, New Zealand’s Financial Markets Authority (FMA) also suspended the derivatives issuer license of AxiCorp for “material breaches” of the Financial Markets Conduct Act 2013, in August of last year.