Exclusive: IronFX Eyes China with FXGiants, Offering Shares to IBs

Finance Magnates has learned that IronFX is launching a new subsidiary targeting the Chinese market after the reputation of its brand was affected by months of disputes about withdrawal requests with some clients. As Finance Magnates reported several weeks ago, FXGiants is the new brand which IronFX will use.

According to publicly available documents filed with the Australian Securities and Investments Commission (ASIC ASIC The Australian Securities and Investments Commission (ASIC) is the prime regulator in Australia for corporate, markets, financial services, and consumer credit. It is empowered under the financial service laws to facilitate, regulate, and enforce Australian financial laws. The Australian Commission was set up and is administered under the Australian Securities and Investment Commission Act of 2001. ASIC was initially the Australian Securities Commission based on the 1989 ASC Act. Initially, the idea was to unite regulators in Australia by replacing the National Companies and Securities Commission and the Corporate Affairs offices. ASIC does not regulate business or register business structures, only business names. One of the unique features of the Australian regulator is that over 90% of its operating budget comes from fees and fines levies. These fees for service, including company registration fees and licensing fees for banks, brokers, and other financial institutions. What is ASIC Responsible For?The regulator is charged with protecting the public from financial fraud and to make sure the investor is knowledgeable and understands their involvement. To this end, the Commission provides a license to each Financial Services provider. ASIC tests and assesses the qualification and experience of Financial Advisors. An Australian financial services (AFS) licensee, an authorized representative, employee or director of an AFS licensee, or an employee or director of a related body corporate of an AFS licensee, is authorized to provide personal advice to retail clients concerning relevant financial products to retail clients ASIC monitors the behavior of Financial Advisors and can access fines and remove or suspend their license. The regulator also licenses all investment and trading companies doing business in Australia. One service of the most outstanding benefits is the Australian Market Regulation Feed. To monitor trading activity, brokers and market operators have to facilitate access to ASIC’s Integrated Market Surveillance System. This means brokers and other relevant bodies in the registry must allow daily access to: All orders, trades, and quotes that are processed and circulated by the trading engine All messages related to trading sessions, product price and status They are closely monitoring all online and day trading The Australian Securities and Investments Commission (ASIC) is the prime regulator in Australia for corporate, markets, financial services, and consumer credit. It is empowered under the financial service laws to facilitate, regulate, and enforce Australian financial laws. The Australian Commission was set up and is administered under the Australian Securities and Investment Commission Act of 2001. ASIC was initially the Australian Securities Commission based on the 1989 ASC Act. Initially, the idea was to unite regulators in Australia by replacing the National Companies and Securities Commission and the Corporate Affairs offices. ASIC does not regulate business or register business structures, only business names. One of the unique features of the Australian regulator is that over 90% of its operating budget comes from fees and fines levies. These fees for service, including company registration fees and licensing fees for banks, brokers, and other financial institutions. What is ASIC Responsible For?The regulator is charged with protecting the public from financial fraud and to make sure the investor is knowledgeable and understands their involvement. To this end, the Commission provides a license to each Financial Services provider. ASIC tests and assesses the qualification and experience of Financial Advisors. An Australian financial services (AFS) licensee, an authorized representative, employee or director of an AFS licensee, or an employee or director of a related body corporate of an AFS licensee, is authorized to provide personal advice to retail clients concerning relevant financial products to retail clients ASIC monitors the behavior of Financial Advisors and can access fines and remove or suspend their license. The regulator also licenses all investment and trading companies doing business in Australia. One service of the most outstanding benefits is the Australian Market Regulation Feed. To monitor trading activity, brokers and market operators have to facilitate access to ASIC’s Integrated Market Surveillance System. This means brokers and other relevant bodies in the registry must allow daily access to: All orders, trades, and quotes that are processed and circulated by the trading engine All messages related to trading sessions, product price and status They are closely monitoring all online and day trading Read this Term), IronFX Global has changed its name to GVS (AU) PTY.

The directors of the new company are well known to readers familiar with IronFX, since they match the top executives representing the interests of IronFX Global headquartered in Cyprus. The document lists the CEO Markos Kashiouris and Director Petros Economides as directors.

IronFX is launching a new subsidiary targeting the Chinese market after the reputation of its brand was affected by months of failure to honor withdrawal requests

The Cyprus headquartered brokerage made headlines in China in 2014 after a large number of its clients asserted that the company was withholding their winnings. At the same time, IronFX Global claimed that some of its clients had abused the firm’s bonus promotions.

With the dispute ongoing, a number of legal cases have been filed against the company in Cyprus, and CySEC settled with the firm for €350,000 late last year. A number of clients spread all over the world continue claiming that IronFX has wrongly accused them of abusing the company’s promotions.

While the heat is still on and with numerous clients of IronFX actively campaigning on social media and forums that the firm is withholding their winnings and/or deposits unlawfully, IronFX continues an ongoing restructuring of its operations after some speculative media reports circulated that the firm was getting close to listing.

IronFX Australia new ownership and rebranding

According to ASIC documentation the new subsidiary under which IronFX is launching its new brand GVS (AU) PTY changed its name on the 21st of January 2016. All 1,500,000 ordinary shares of the newly named company are held by an offshore British Virgin Islands company named GVS Limited.

Sources with knowledge of the matter confided to Finance Magnates that the new venture FXGiants is allegedly owned only partially by IronFX Global. According to the information, about 45 per cent of the BVI registered company belongs to a set of Chinese introducing brokers, with another 45 per cent owned by IronFX Global, and 10 per cent in the hands of a third party which is providing financing resources.

According to the information, about 45 per cent of the BVI registered company belongs to a set of Chinese introducing brokers

In terms of the business structure, the new venture allows IronFX to fulfill its vested interest in Chinese introducing brokers. After the Cypriot brokerage was unable to meet its Obligations Obligations In finance, an obligation is a financial responsibility where the terms of a contract must be met. Should an obligation between parties fail then the party who is at default may face legal action. In this scenario, the guilty party will not only have to agree to pay the set amount to fulfill the contractual arrangement but may also be responsible for covering all legal proceedings cost. Routine payments or outstanding debt of any kind are considered financial obligations, so if someone owes you or will owe you money that is considered an obligation. Different Types of ObligationsBonds, banknotes, and coins are examples of obligations because they assure users that they are accredited with the face value of that item. Obligations play a considerable role in personal finance and should be included in every budget. While every budget is different from one another, individuals can use the Financial Obligation Ratio (FOR) that is published quarterly by the Federal Reserve Board as a good reference point on how to best structure individual budgets. For those in the process of retirement planning, obligations should be scrutinized with a wide scope.These should include typical financial obligations such as mortgage payments and healthcare expenses that may incur. In trading, obligations are dealt in the form of put options and short selling or they may refer to the selling of shares on the next trading day after they were purchased in delivery. When obligations fail to be met and legal proceedings have begun, the severity of the punishment set forth is primarily determined by the terms of the contract although juror and judge intervention may lessen the obligations that must be met to fulfill the contract. In finance, an obligation is a financial responsibility where the terms of a contract must be met. Should an obligation between parties fail then the party who is at default may face legal action. In this scenario, the guilty party will not only have to agree to pay the set amount to fulfill the contractual arrangement but may also be responsible for covering all legal proceedings cost. Routine payments or outstanding debt of any kind are considered financial obligations, so if someone owes you or will owe you money that is considered an obligation. Different Types of ObligationsBonds, banknotes, and coins are examples of obligations because they assure users that they are accredited with the face value of that item. Obligations play a considerable role in personal finance and should be included in every budget. While every budget is different from one another, individuals can use the Financial Obligation Ratio (FOR) that is published quarterly by the Federal Reserve Board as a good reference point on how to best structure individual budgets. For those in the process of retirement planning, obligations should be scrutinized with a wide scope.These should include typical financial obligations such as mortgage payments and healthcare expenses that may incur. In trading, obligations are dealt in the form of put options and short selling or they may refer to the selling of shares on the next trading day after they were purchased in delivery. When obligations fail to be met and legal proceedings have begun, the severity of the punishment set forth is primarily determined by the terms of the contract although juror and judge intervention may lessen the obligations that must be met to fulfill the contract. Read this Term in the past, the new model was set up in order to ensure that the interests of both IronFX and the introducing brokers are aligned. As some Chinese IBs still have a pending legal dispute with IronFX, offering shares of the new enterprise could be understood to be a means to pay back funds.

Sources with knowledge of the matter say that while the headquarters of FXGiants are located in Australia, the firm’s marketing department and customer service management offices are going to be located in Cyprus. The company will also allegedly have an operational center in China, where the customer support of FXGiants is to be located.

IronFX in China

Back in September 2014, dozens of Chinese traders flocked to the offices of the company and claiming withdrawal delayed. The company denies the allegations.

By design, the new offering which IronFX and its partners are claiming to bring to the market is based on Straight Through Processing (STP) of client orders.

Meanwhile, ASIC has been actively discouraging the use of offshore entities when it comes to the ownership of regulated firms in Australia. Commenting on a previous occasion when the watchdog suspended the license of an OTC (over-the-counter) brokerage whose real owners were not properly disclosed, ASIC Commissioner Cathie Armour waved a red flag.

Any entity that is unable to comply with Australian licensing obligations risks having its license suspended or cancelled

“We would have concerns if new entrants to this market were trying to inappropriately bypass ASIC’s stringent AFS License application processes. Regulatory obligations on AFS licensees continue to apply after the change of control. Any entity that is unable to comply with Australian licensing obligations risks having its license suspended or cancelled,” Armour said.

Finance Magnates reporters reached out to IronFX representatives for comment, however at the time of the publication have not received any response.